70401




              Vietnam Planning Study on Investment in
        Provincial/Local ICT Infrastructure and Services
                                                                                                                           Final Report




                                                                                                           16 Sep 2009 | Reference | v1.0
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Planning Study on Investment in Provincial/Local ICT Infrastructure and Services                                                              Sep 2009
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Index
LIST OF FIGURES......................................................................................................................................... 5

LIST OF TABLES........................................................................................................................................... 7

PROJECT DATA SHEET................................................................................................................................ 8

1    INTRODUCTION..................................................................................................................................... 9

2    GOVERNMENT’S APPROACH ON ICT DEVELOPMENT........................................................... 12
2.1     SUMMARY .............................................................................................................................................. 12
2.2     INTRODUCTION TO THE GOVERNMENT OF VIETNAM ........................................................................ 13
2.2.1     OVERVIEW ........................................................................................................................................... 13
2.2.2     DECENTRALIZATION............................................................................................................................ 13
2.2.3     BUDGET ALLOCATION ......................................................................................................................... 15
2.3     APPROACH ON ICT DEVELOPMENT ..................................................................................................... 15
2.3.1     OVERVIEW ........................................................................................................................................... 15
2.3.2     GOVERNMENT OF VIETNAM AND ICT TECHNOLOGIES ....................................................................... 15
2.3.3     SECTOR DEREGULATION AND EVOLUTION ......................................................................................... 18
2.3.4     UNIVERSAL ACCESS AND SERVICE FUND ........................................................................................... 21
2.4     ATOS CONSULTING ANALYSIS ............................................................................................................. 23
2.4.1     GOVERNMENT DECENTRALIZATION .................................................................................................... 23
2.4.2     SECTOR DEREGULATION AND EVOLUTION ......................................................................................... 24
2.4.3     VIETNAM PUBLIC-UTILITY TELECOMMUNICATIONS SERVICE FUND ................................................. 24
2.4.4     PROVINCIAL ICT MASTER PLANS ....................................................................................................... 25
3    CURRENT STATUS OF ICT IN VIETNAM PROVINCES.............................................................. 27
3.1     SUMMARY .............................................................................................................................................. 27
3.2     ICT DIMENSIONS ................................................................................................................................... 28
3.3     ICT INFRASTRUCTURE ......................................................................................................................... 29
3.4     ICT APPLICATIONS AND SERVICES ..................................................................................................... 31
3.5     E-GOVERNMENT ................................................................................................................................... 31
3.6     HUMAN CAPACITY AND RESOURCES ................................................................................................... 33
3.7     ATOS CONSULTING ANALYSIS ............................................................................................................. 34
3.7.1    CURRENT STATUS OF THE ICT SECTOR IN VIETNAM .......................................................................... 34
3.7.2    ICT INFRASTRUCTURE IN PROVINCES ................................................................................................. 36
3.7.3    ICT APPLICATIONS & SERVICES IN PROVINCES.................................................................................. 37
3.7.4    E-GOVERNMENT IN PROVINCES .......................................................................................................... 38
3.7.5    HUMAN CAPACITY & RESOURCES IN PROVINCES............................................................................... 40
4    INTERNATIONAL GOOD PRACTICES FOR PUBLIC INVESTMENT IN ICT......................... 42
4.1     SUMMARY .............................................................................................................................................. 42
4.2     RECENT INVESTMENT TRENDS ICT DEVELOPMENT .......................................................................... 44
4.3     A CURRENT COMMONLY ACCEPTED FRAMEWORK FOR ICT INVESTMENT ...................................... 46
4.4     PPPS FOR ICT AND E-GOVERNMENT FINANCING .............................................................................. 47
4.4.1    RATIONALE FOR PPPS ......................................................................................................................... 47
4.4.2    KEY ISSUES AND CONSIDERATIONS ..................................................................................................... 50
4.4.3    BENEFITS OF PPPS IN ICT AND E-GOVERNMENT ................................................................................ 52
4.5     MSPS FOR ICT AND E-GOVERNMENT FINANCING ............................................................................. 53
4.5.1    RATIONALE FOR MSPS ........................................................................................................................ 53
4.5.2    STAKEHOLDERS IN A MSP................................................................................................................... 54
4.5.3    INTERESTS OF THE STAKEHOLDERS ..................................................................................................... 54
4.5.4    CHALLENGES FOR MSPS ..................................................................................................................... 56
4.6     ATOS CONSULTING ANALYSIS ............................................................................................................. 60


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5 LEGAL, REGULATORY AND INSTITUTIONAL FRAMEWORK OF ICT
INFRASTRUCTURE AND APPLICATIONS IN VIETNAM ................................................................. 62
5.1     SUMMARY .............................................................................................................................................. 62
5.2     POLICY AND INSTITUTIONAL FRAMEWORK ....................................................................................... 63
5.2.1    GLOBAL REGULATORY FRAMEWORK EVOLUTION ............................................................................. 63
5.2.2    MAIN LAWS AND REGULATIONS ......................................................................................................... 63
5.2.3    ALLOCATION OF RESPONSIBILITIES FOR POLICY MAKING AND REGULATION ................................... 65
5.3     VIETNAM AND WORLD TRADE ORGANIZATION ................................................................................. 66
5.3.1    RELEVANT FACTS ................................................................................................................................ 66
5.3.2    THE WAY TOWARDS WTO .................................................................................................................. 67
5.3.3    VIETNAM AFTER ITS ACCESSION TO WTO .......................................................................................... 68
5.4     RESTRICTIONS REGARDING INVESTMENT........................................................................................... 69
5.4.1    GENERAL APPROACH ........................................................................................................................... 69
5.4.2    PROVISIONS ON IT APPLICATION INVESTMENT FUNDED BY STATE BUDGET ...................................... 70
5.4.3    INVESTMENT PROJECT NOT FUNDED BY STATE BUDGET .................................................................... 73
5.4.4    EXAMPLES OF BUSINESS COOPERATION CONTRACTS (BCCS) ........................................................... 74
5.5     ATOS CONSULTING ANALYSIS ............................................................................................................. 74
6    ICT INVESTMENT FRAMEWORK ................................................................................................... 76
6.1 INTRODUCTION ..................................................................................................................................... 76
6.2 COMPONENT 1 - INVESTMENT AREAS DESCRIPTION ......................................................................... 77
6.2.1 ICT INFRASTRUCTURE ........................................................................................................................ 78
6.2.2 ICT APPLICATIONS & SERVICES ......................................................................................................... 80
6.2.3 E-GOVERNMENT.................................................................................................................................. 82
6.2.4 HUMAN CAPACITY & RESOURCES ...................................................................................................... 84
6.3 COMPONENT 1 – INVESTMENT AREAS IMPACT & TIME OF DELIVERY ............................................ 84
6.4 COMPONENT 2 - INVESTMENT MODELS .............................................................................................. 93
6.4.1 ICT INFRASTRUCTURE ........................................................................................................................ 95
6.4.2 ICT APPS. & SERVICES........................................................................................................................ 96
6.4.3 E-GOVERNMENT.................................................................................................................................. 96
6.4.4 HUMAN CAPACITY & RESOURCES ...................................................................................................... 96
6.5 COMPONENT 3 – INVESTMENT ROADMAP........................................................................................... 96
6.5.1 ROADMAP CONCLUSIONS .................................................................................................................. 101
6.5.2 INVESTMENT AREAS AROUND 2010................................................................................................... 102
6.5.3 INVESTMENT AREAS AROUND 2015................................................................................................... 102
6.5.4 INVESTMENT AREAS AROUND 2020................................................................................................... 103
6.5.5 INVESTMENT AREAS AROUND 2025................................................................................................... 104
6.6 COMPONENT 4 - PROVINCE SELECTION METHODOLOGY ............................................................... 104
6.7 COMPONENT 5 - PROJECT ASSESSMENT GUIDELINES ..................................................................... 106
6.7.1 PROJECT PLANNING AND IMPLEMENTATION..................................................................................... 107
6.7.2 ICT INFRASTRUCTURE ...................................................................................................................... 108
6.7.3 ICT APPLICATIONS & SERVICES ....................................................................................................... 109
6.7.4 E-GOVERNMENT................................................................................................................................ 110
6.7.5 HUMAN CAPACITY & RESOURCES .................................................................................................... 111
6.8 INTERNATIONAL LESSONS – IMPLICATIONS FOR VIETNAM ............................................................ 122
6.8.1 IMPROVE PROJECT DESIGN ................................................................................................................ 123
6.8.2 ADOPT INTEGRATED PLANNING AMONG DIFFERENT PROJECT PARTNERS ......................................... 123
6.8.3 PLAN FOR MONITORING AND EVALUATION (M&E) ......................................................................... 124
6.8.4 ADOPT ENHANCED PROJECT MANAGEMENT...................................................................................... 124
6.8.5 DESIGN CAREFULLY PARTNERSHIP STRUCTURE, BIDDING PROCESS AND CONTRACT PROVISIONS ... 125
6.8.6 DESIGN FOR FINANCIAL SUSTAINABILITY ......................................................................................... 125
6.8.7 IDENTIFY DEMAND ............................................................................................................................ 125
6.8.8 RAISE AWARENESS AND PROMOTE USAGE ........................................................................................ 126
6.8.9 PLAN FOR TRANSITION TO NEW SYSTEMS ......................................................................................... 126
6.8.10 ALWAYS INCLUDE TRAINING FOR STAFF AND USERS ...................................................................... 126

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6.9     RISK MITIGATION ACTIONS .............................................................................................................. 127
7     IMPLEMENTATION PLANNING .................................................................................................... 129
7.1     INTRODUCTION ................................................................................................................................... 129
7.2     APPLICATION OF THE INVESTMENT FRAMEWORK .......................................................................... 129
7.3     TEMPLATE FOR PROJECT PROPOSALS .............................................................................................. 130
7.4     INTERNATIONAL LESSONS AND RISK MITIGATION ACTIONS ............................................................ 131
7.5     CRITERIA FOR PROJECT SCREENING ................................................................................................. 131
7.6     CRITERIA FOR PROJECT SEQUENCING AND PRIORITIZATION.......................................................... 132
8     SET OF RECOMMENDATIONS....................................................................................................... 135

ANNEXES .................................................................................................................................................... 138

ANNEX A – DATA COLLECTED OF PROPOSED ICT PROJECTS FROM PROVINCES........... 139

ANNEX B – LIST OF PROVINCIAL ICT PROJECTS WITH BUDGET........................................... 150

ANNEX C – BEST PRACTICES ON ICT PROJECTS.......................................................................... 159

ANNEX D – BEST PRACTICES ON BROADBAND DEPLOYMENT IN DEVELOPING
COUNTRIES ............................................................................................................................................... 177

ANNEX E – PUBLIC-PRIVATE PARTNERSHIPS ............................................................................... 180

ANNEX F – EXAMPLES OF PPPS FOR INFRASTRUCTURE........................................................... 191
DELIVERING PUBLIC SERVICES AT THE LOCAL AND COMMUNITY LEVEL IN INDIA ....................................... 191
DEPLOYMENT OF WIRELESS BROADBAND IN RWANDA ................................................................................ 196
ANNEX G – EXAMPLES OF PPPS FOR ICT APPLICATIONS AND SERVICES .......................... 199
B2BPRICENOW.COM - PHILIPPINES ............................................................................................................... 199
MANOBI - SENEGAL ....................................................................................................................................... 200
PEOPLINK – WORLDWIDE .............................................................................................................................. 201
VISHNEVSKAYA-ROSTROPOVICH FOUNDATION - RUSSIA ............................................................................ 202
ANNEX H – EXAMPLES OF PPPS FOR E-GOVERNMENT.............................................................. 204
ENHANCED MANAGEMENT FRAMEWORK - CANADA .................................................................................... 204
A PPP BEST PRACTICE IN E-PROCUREMENT: MERX SERVICE ........................................................................ 206
THREE DIFFERENT SUCCESS CASES WHICH TRIGGERED IMPROVED E-GOVERNMENT SERVICES.................... 208
ANNEX I – EXAMPLES OF MSPS.......................................................................................................... 213
NATIONAL POLICIES....................................................................................................................................... 213
PROMOTING ACCESS: TELECENTRES AND CAPACITY BUILDING .................................................................... 215
ICT APPLICATIONS ........................................................................................................................................ 218
ANNEX J – MITIGATION ACTIONS ..................................................................................................... 222

ANNEX K – T-PLAN ROADMAPPING METHODOLOGY ................................................................ 231
ROADMAPPING............................................................................................................................................... 231
T-PLAN METHODOLOGY ............................................................................................................................... 232
T-PLAN METHODOLOGY PERSONALIZATION ................................................................................................ 233
T-PLAN METHODOLOGY APPLIED TO INVESTMENT PLANNING IN VIETNAM’S ICT ..................................... 233




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List of Figures
Figure 1 - Administrative Organization for the Implementation of National Programs                                  14
Figure 2 - GoV priority areas on ICT – Ministry of Posts and Telematics, 2003                                       16
Figure 3 – Fixed line and mobile line subscribers evolution in Vietnam – ITU webpage, 2009                          17
Figure 4 – Internet and Broadband subscribers evolution in Vietnam – ITU webpage, 2009                              18
Figure 5 - Vietnam’s ICT Sector Players – WB Global ICT Department, 2006                                            18
Figure 6 - Compromise between planning and management skills and local information                                  23
Figure 7 - Degrees of extension of ICT – WB & Islamic Development Bank, 2006                                        28
Figure 8 - ICT Analysis Dimensions - Ministry of Posts and Telematics, 2003                                         29
Figure 9 - Investment areas by their strategic and measurable character – ITU, 2007                                 34
Figure 10 - Five stages of the United Nations Global e-Government Reference Model – UN, 2005                        39
Figure 11 - Actions towards the improvement of Government as services provider – WB, 2005                           40
Figure 12 - Financing structure evolution in Public and Private Sector – Deloitte Research, 2006                    46
Figure 13 - Classification of PPP's activity in developed countries - Deloitte Research, 2006                       49
Figure 14 - Activities in the different stages of PPP's evolution – Deloitte Research, 2006                         49
Figure 15 - PPP options for ICT and e-Government financing – WB, 2008                                               51
Figure 16 - Menu of PPP structuring techniques                                                                      51
Figure 17 - Roles of the different agents in an Multi Stakeholder Partnership – ITU, 2005                           55
Figure 18 - Structure of Policy & Regulatory and Independent Units                                                  66
Figure 19- Investment schemes and sectorial investments piecharts – MPI, 2008                                       68
Figure 20 - Classification of IT application projects                                                               70
Figure 21 - Government Investment Process for ICT                                                                   71
Figure 22 – Province Implementation Process                                                                         71
Figure 23 - ICT Investment Framework                                                                                77
Figure 24 - Investment Areas                                                                                        78
Figure 25 - Network and IT Infrastructure Prioritization Matrix                                                     85
Figure 26 – ICT Applications and Services Prioritization Matrix                                                     87
Figure 27 - eGovernment Prioritization Matrix                                                                       89
Figure 28 - Human Capacity and Resources Prioritization Matrix                                                      91
Figure 29 - Steps of Atos Consulting Roadmap on Investment Planning in Vietnam                                      97
Figure 30 - Trends layer of Atos Consulting Roadmap on Investment Planning in Vietnam                               98
Figure 31 - Demands layer of Atos Consulting Roadmap on Investment Planning in Vietnam                              99
Figure 32 – Investment Areas layer of AC Roadmap on Investment Planning in Vietnam                                 100
Figure 33 - Province Selection Methodology                                                                         106
Figure 34 - Summary of Project Assessment Guidelines                                                               107
Figure 35 - Project Planning and Implementation Risks Matrix                                                       112
Figure 36 - Network & IT Infrastructure Risks Matrix                                                               114
Figure 37 - ICT Applications and Services Risks Matrix                                                             116
Figure 38 - eGovernment Risks Matrix                                                                               118
Figure 39 - Human Capacity & Resources Risks Matrix                                                                120
Figure 40 - Lessons from international experience – All projects                                                   122
Figure 41 - Lessons from international experience - Specific types of projects                                     123
Figure 42 - Application of the Investment Framework                                                                130
Figure 43 - Project Template                                                                                       131
Figure 44 – Criteria for project sequencing and prioritization                                                     134
Figure 45 - Summary of PPPs by sector in countries of the European Union                                           185
Figure 46 - Summary of PPPs by sector in non EU countries                                                          186
Figure 47 - List of actions: general and specific to the kind of project                                           222
Figure 48 - Local Assistance to project partner – Consequences and mitigation actions                              223
Figure 49- Implementation Phase and Change Mgt – Consequences and mitigation actions                               224
Figure 50 - Training and hand-off - Consequences and mitigation actions                                            225
Figure 51 - Financial sustainability - Consequences and mitigation actions                                         226
Figure 52 – Management contract - Consequences and mitigation actions                                              227
Figure 53 – Demand identification - Consequences and mitigation actions                                            228
Figure 54 - Awareness - Consequences and mitigation actions                                                        229
Figure 55 – Skills development and training component - Consequences and mitigation actions                        230
Figure 56 - Technology Roadmapping Description                                                                     231
Figure 57 - T-Plan Methodology Description                                                                         232
Figure 58 - Relationship between trends, demands and investment areas - 2010                                       235


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Figure 59 - Relationship between trends, demands and investment areas – 2015 (1)                         236
Figure 60 - Relationship between trends, demands and investment areas – 2015 (2)                         237
Figure 61 - Relationship between trends, demands and investment areas – 2020                             238
Figure 62 - Relationship between trends, demands and investment areas – 2025                             239
Figure 63 - Trends layer of Atos Consulting Roadmap on Investment Planning in Vietnam                    240
Figure 64 - Demands layer of Atos Consulting Roadmap on Investment Planning in Vietnam                   241
Figure 65 – Investment Areas layer of AC Roadmap on Investment Planning in Vietnam                       242




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List of Tables
Table 1 - Menu of PPP structuring techniques                                                        52
Table 2 - Network and IT Infrastructure Impact and Time                                             86
Table 3 - ICT Applications and Services Impact and Time                                             88
Table 4 - eGovernment Impact and Time                                                               90
Table 5 - Human Capacity and Resources Impact and Time                                              92
Table 6 - Investment areas and investment schemes                                                   93
Table 7 - Project Planning and Implementation Risks Impact and Probability                         113
Table 8 - Network & IT Infrastructure Risks Impact and Probability                                 115
Table 9 - ICT Applications and Services Risks Impact and Probability                               117
Table 10 - eGovernment Risks Impact and Probability                                                119
Table 11 – Human Capacity & Resources Risks Impact and Probability                                 121
Table 12 - Risk Assessment - All projects                                                          127
Table 13 - Risk Assessment - Specific projects                                                     128
Table 14 - Project Screening Criteria                                                              132
Table 15 - Examples of market structure reform                                                     181




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       Project Data Sheet
           Project title:                             Vietnam: Planning Study on Investment in Provincial/Local
                                                      ICT Infrastructure and Services
       Project number:                                7148720
   Contracting Authority:                             The World Bank
           Contractor:                                Atos Origin SAE
 Contract signature date:                             15th October 2008
          Kick-off date:                              17th October 2008
       Project duration:                              Contract duration: September 15, 2008 - June 30, 2009
                                                      Project duration: 6 calendar months
 Contact persons for the                              Ms. Christine Zhen-Wei Qiang (cqiang@worldbank.org)
  Contracting Authority:
                                                      Ms. Naomi Halewood (nhalewood@worldbank.org)
                                                      Mr. Peter Smith (psmith2@worldbank.org)
  Contact person for the                              Mr. Fernando Kraus (fernando.kraus@atosorigin.com)
       Contractor:
                                                      Tel. + 34 91 214 95 00
                                                      Fax. + 34 91 214 95 25
                                                      Atos Consulting
                                                      C/Albarracin 25
                                                      28037 Madrid – SPAIN
       Consulting team:                               Terry Lobel - Project Leader
                                                      (terry.lobel@atosorigin.com)
                                                      Antonio Rodríguez Moral - Telco/ICT Specialist
                                                      (antonio.rodriguezm@atosorigin.com)
                                                      Juan Muguiro - Economist/Financial Analyst
                                                      (juan.muguiro@atosorigin.com)
                                                      Jocelyn Tan - Consultant
                                                      (jocelyn.tan@atosorigin.com)
       Planned outputs:                               Inception Report
                                                      Interim Report
                                                      Draft Final Report
                                                      Final Report




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1                 Introduction
The Government of Vietnam acknowledges the benefits of Information & Communication
Technologies (ICT) in its various applications, as a means to develop economic diversification,
foster competitiveness, increase productivity, and improve the efficiency and capability of
institutions on a governmental level. The increasing availability to information and communication
technologies has improved citizens access to information across the different economical sectors.
ICT is therefore considered as a crucial catalyst to poverty reduction through the facilitation of
information flow between citizens, businesses, and the government. Furthermore, it is considered
that ICT ensures a better allocation of resources, service delivery, and acts as a value-creator for
poor populations through the creation of new sources of employment and income.
In this context, the World Bank is currently financing a Vietnam ICT development project to
accelerate the use of ICT and support institutional development at the national level, as well as to
develop e-government applications and a vibrant local ICT private sector in three major cities
(Danang, Hanoi, and Ho Chi Minh City).
As of September 2008, 35 of the 63 provinces had developed an ICT master plan, which had been
completed with assistance from the Ministry of Information and Communications (MIC). Several
had submitted preliminary proposals to the Ministry of Planning and Investment (MPI) requesting
for technical and financial support for the development of ‘digital provinces’. The Government in
turn called for the World Bank’s support to bring momentum to ICT development in the provinces
through consolidation of the initial findings, advice on cross-cutting ICT development issues and to
consider a potential IDA project.
In this way, the World Bank along with the Government of Vietnam designed and planned the
project “Vietnam Planning Study on Investment in Provincial/Local ICT Infrastructure and
Services�. This project has the specific objective of developing a set of investment guidelines and a
methodology that will guide ICT investments in Vietnam. Both the guidelines and the methodology
will comply with the following requirements:
              •     Be agreed on by the Vietnamese Government and the World Bank representatives
              •     Incorporate international public policy best practices
              •     Be applicable at the provincial/local level
The results of this study will provide basis for discussion between the World Bank and the
Government on concrete steps regarding how the Bank’s financial assistance can best meet the
country’s need and support the implementation of the Government’s plans in this important area.
This consultancy is being undertaken as an initial part of a larger technical assistance project
whose overall objective is to support the Government of Vietnam in the improvement of its
provincial/local telecommunications and information infrastructure and services, it is undertaken in
the context of public administrative reforms and decentralization by analyzing options of
sustainable implementation arrangements.
Atos Consulting has been commissioned by the World Bank to support this consultancy.
The present document addresses items a) to e) in Section 8 of the Terms of Reference, as follows:
Section 2 addresses item 8.a): “Take stock of the government's approach on ICT infrastructure
development, particularly privatization and liberalization, and assess its implications and impact at
the provincial/local level.�

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Section 3 addresses item 8.b): “Identify, describe and assess e-government services (or
applications) for delivery at the local/provincial government level in Vietnam and implementation
options.�
Section 4 addresses item 8.c): “Review international good practices concerning how other
countries have structured public investment for ICT infrastructure and applications (including, for
example, ICT infrastructure funds, Public-private partnerships, and subsidy programs, etc.), and
how countries have paid for such investments (taxes, advertising, user charges, etc.).�
Section 5 addresses item 8.d): “Review the legal, regulatory and institutional framework of
provincial/local ICT infrastructure and applications financing in Vietnam. Review the current use of
finance channels in Vietnam and assess the potential applicability of the practices in paragraph
8(c) above for Vietnam.�
Section 6 addresses the following items:
      »     8.e): “Develop a methodology that takes account of international good practices, conditions
            in Vietnam, emerging ICT technologies, sustainable business models, and development
            impact, to guide public investment in ICT infrastructure and applications at the
            provincial/local level.�,
      »     8.f): “Based on this methodology, propose categories of priorities with respect to economic,
            social, demographic and spatial factors, financing mechanisms, and investment models.�,
      »     8.h): “Based on the methodology, review a wide range of potential initiatives in order to
            identify and propose public infrastructure investment priorities in terms of the types of
            investment, service delivery, the structure of investment, and the provinces to be covered,
            etc. The possible types of infrastructure for consideration include:
                  o     Provincial/local telecom backbone network and access infrastructure (e.g. Municipal
                        WiFi/broadband networks);
                  o     Public-private e-government network infrastructure and services (e.g. Andra
                        Pradesh model);
                  o     Niche broadband initiatives (e.g. broadband for schools, hospitals, etc.);
                  o     Utilization, monetization, and commercialization and of existing or planned non-
                        telecom operator telecom networks (e.g. railway fiber optic networks) for provision
                        of telecom services to others.
                  o     In addition, several types of e-government applications or services should be
                        considered.�
      »     8.i): “Explore the possibility to combine (totally or partially) the currently publicly-funded
            infrastructure with privately-owned service operators.�
      »     8.j): “Identify, assess, and prioritize opportunities to accelerate development of ICT
            infrastructure networks and applications at the provincial/local level in a financially
            sustainable manner. Propose priorities for provincial/local ICT infrastructure and e-services
            development projects.�
      »     8.k): “Develop and propose a long term investment framework for a 20 year horizon to
            guide public investment in ICT infrastructure and e-services at the provincial/local level�




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Section 7 addresses item 8.l): “Develop and propose detailed implementation plans for
provincial/local infrastructure investment priorities, in consultation with 5 selected provincial
governments, to implement the investment framework. “
Section 8 proposes a set of guidelines which, if addressed, would help to improve project and
implementation planning of ICT Projects in Vietnam.




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2               Government’s approach on ICT development

2.1             Summary
Vietnam has embarked on a far-reaching transition of a character similar to China -an attempt to
transform the country’s economy, through market liberalization, without altering its centralized
political structure. Doi Moi, (roughly, “reconstruction�), the term adopted in 1986, described a set of
policies designed to foster a “market socialism� through large measures of free enterprise while
preserving the political primacy and governing power of the Communist Party.
As part of this transition, Vietnam has carried out a government decentralization process, which
has gained strength from 1996 in the search of a more active market economy. In Vietnam budget
allocation is decided through a double process, top-down and bottom-down, in which an annual
negotiation takes place between the central government and provinces to determine the level of
expenditure and appropriate revenue transfers to be assigned. The budgets are redistributed
throughout the provinces to district and commune levels. In this process, the People’s Committee
and People’s Council are the institutions which decide and manage at each level the allocation and
application of the budget, respectively
In this process of allocating budgets and supervising the realization of the tasks associated, the
Government of Vietnam has identified Information and Communication Technologies (ICTs) as a
key strategic driver for reaching the national goals set. For more than a decade the Vietnamese
government has put emphasis on ICT to develop and foster economic and social development, by
the definition of a strategy framework accompanied by specific objectives set by the Government.
To facilitate reaching those objectives the most important measures can be placed in the scope of
sector liberalization, in which Vietnam has evolved from a monopoly to a situation of relative
openness of its competitive environment both in fixed and mobile services, and the scope of
Universal Access and Service Fund, where the Government has founded the Vietnam Public Utility
Telecommunication Service Fund (VTF), responsible for the development of telecommunication
services in rural areas, mainly those districts with a very low telephone subscription and extremely
difficult socio-economic conditions.
Although there has been a delegation of tasks from central to local government, which has led to
improvement in service delivery and more transparent public participation, no clear mechanism
that promotes the local government’s pro-activity and creativity is offered. Decentralization of
planning, management and fiscal responsibilities requires a certain knowledge of planning,
management and finance. However, the capacity in practice of the local officials for these
responsibilities may be insufficient for the task. Vietnam has made a notable progress in this area
and should focus on improving its intergovernmental organization networks and dedicate time and
expertise to the implementation process.
Government of Vietnam (GoV) has carried out a great effort to increase competition in the
telecommunication sector; however, conditions for foreign investors are still not as attractive as
they could as they have mainly the possibility to finance capital investment and share in revenues,
but have no ownership share and little management. These conditions lead to a higher investor
risk which results in aversion to enter the country.




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Regarding ICT Master Plans, they serve to the purposes of having ICT plans aligned with the GoV
overall strategy and they comply with international best practices. However, some aspects as their
clarity and their management, coordination and evaluation could be improved. One problem which
led to a lack of traceability was that the projects in the ICT Plan are usually described just by their
name and budget. Additionally, problems with the application of software systems and the absence
of an ICT specialized department in the Ministries and departments are hardbacks to their
execution.
Finally, VTF suffers from a lack of project management capabilities in the organization. The
approval of projects without sufficient evaluation usually leads to problems for development. The
establishment of a project management office would aid the VTF in overcoming the problem
usually faced by most Universal Service Funds in the telecommunication industry, the preservation
of anticompetitive structure. Apart from that, there should be mechanisms which permit the VTF to
finance the mobile services sector instead of reducing its activity only to fixed services.


2.2             Introduction to the Government of Vietnam
2.2.1           Overview
The structure of the Vietnamese government has evolved tremendously in the last decade. This
evolution is a result of the decentralization of the government that has been implemented through
planned sector restructuring. The government is currently made up of four levels – the central,
provincial, commune and finally, district government. Each different level has a different budget
allocation process. However, since no standard system exists for the distribution of revenue, it is
carried out annually.

2.2.2           Decentralization
An overview of the structure of Vietnam’s government gives us a better understanding as to how
national programs are run and, thus, how ICT investment is managed from a government
perspective. Vietnam has undergone a formalization of the sub-national government framework
since previously becoming a centrally planned communist state after the Vietnam War. This
indicates a shift in focus from a centralized to a decentralized government.
Evolution. The decentralization process has been carried out in a formal, yet incremental way,
through a series of market and public sector reforms. It can be divided into three main periods:
       »     From 1946 – 1960 when a constitution was first established with people’s councils and
             administrative committees.
       »     Efforts were further increased in 1960-1992 when focus was placed on national
             consolidation with the centralizing of the administration, institutional structures and roles,
             especially under the 1959 constitution.
       »     The third period starting from 1996 marked the most important phase for the Vietnamese
             decentralization process with a development of a vibrant and equitable market economy.
Levels of Government. Vietnam’s administrative structure currently consists of four levels of
government: (Central) Government, Provinces, Communes, and Districts. Each level of the state
administration (province, commune, and district) has their respective People’s Council and



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People’s Committee, with the People's Committee being the executive agency of the People's
Council at that level.
They also possess line representatives who are dispatched into departments at the province level,
offices at the district level, and sections at the commune level. Clause no. 53 of the 1994 law
states the responsibility of these agencies is to “help their corresponding People’s Committees
realize state management tasks in the locality and ensure a unified management of the sector from
the centre to the locality.�
The Ordinance of 19961 stipulates that the People’s Committees at all level are responsible for
formulating policy details (see Figure 1) along with organizing policy implementation. In practice,
this is valid for a wide range of areas including that of ICT investments, but excludes taxation and
local personnel.
In the area of planning, the Ordinance states that Provincial People’s Committees formulate both
long term and annual socio-economic development plans, and present to the government for
endorsement (see Figure 1). They are also mandated to participate in the elaboration of the
general economic plans carried out by the central government and ministries and organize and
implement assigned policies. District People’s Committees are responsible to draft the annual
socio-economic plans and for submitting them to the upper echelon for approval. In the area of
promoting domestic investment, Article 19 states that provincial People’s Committees and cities
under central management must supply a list of projects requiring investment promotion and are
connected with the socio-economic development guidelines of their localities.




                              Figure 1 - Administrative Organization for the Implementation of National Programs



1
  “Decentralisation in Vietnam – Working Effectively at provincial and Local Government level – a comparative analysis of
Long An and Quang Ngau Provinces�, 2003, by Adam Forde and Associates Pty Ltd for the Australian Agency of
International Development�




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2.2.3           Budget Allocation
Democratic centralism, which is the basic principle in Vietnam, refers to the importance that the
central government places for the allocation of budgets and at the same time, relying on local
participation to ensure that the use of budget for development responds to local needs.
Local levels have both budgetary and administrative responsibilities, but communes are not directly
included in the consolidated budget. Almost all public services are delivered through the formal
government administrative system.
Allocation process. An annual negotiation takes place between the central government and the
provinces to determine their level of expenditure and appropriate revenue transfers for poorer
provinces. District and commune revenues are approved based on expenditure but there is no
existing standard system of assigning revenues to districts and communes. Each province
possesses its own system and share of taxes are often assigned to provinces which in turn
allocates this to the districts and finally to the communes. People’s councils at the commune level
can contribute in cash or kind to households without higher level approval for an expansion of
revenue.
Revenue allocation of public service delivery at the commune level is far from adequate to cover
simple administrative costs. A high reliance is placed on national programs that provide local
contributions for the financing of all non-salary recurrent costs of public services that may include
education and health. Households directly finance some of these services and this varies
distinctively among provinces, districts and communes, largely dependent on local leadership and
income.


2.3             Approach on ICT development
2.3.1           Overview
The ICT sector has been recognized by the Government of Vietnam as a crucial sector which
could be the key for further growth and development. The government has planned a series of
objectives for Vietnam to accomplish in order to add momentum to the economy. The specific aims
will act as indicators that will benchmark the progress of ICT development in Vietnam against that
of the region. One of the ways in which the government is employing to boost ICT development is
through sector deregulation.
The sector deregulation has resulted in the growth of more network operators, better mobile
services and new policies and measures. Market competition occurs freely, especially in the mobile
service sector. A universal service fund and access was also founded in order to enhance the ICT
development. This fund is called the Vietnam Public-Utility Telecommunication Service Fund (VTF)
and acts as a non-project fund for telecommunications organizations for the maintenance of public
utility services for the citizens and to loan capital to telecommunications enterprises to upgrade
infrastructure network for the citizens.

2.3.2           Government of Vietnam and ICT technologies
Information and communication technologies can take various forms, ranging from infrastructure
technology such as telecommunication facilities providing high quality voice and data services, to
information systems and software programs for particular sectors (e.g. treasury, banking,


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management, etc.). Furthermore, the ICT sector is co-dependent on the degree of maturity of other
sectors and other factors. These include for example: electricity, ICT skilled human resources, and
a favorable investment climate (foreign and national). The multi-faceted nature of ICT represents
an important challenge for the Vietnamese Government to foster economical growth around this
sector. The vast applicability of ICT highlights the importance of determining strategic axes for ICT
development, and defining clear roles and objectives to the project actors.
Priority areas. Information and Communication Technologies have been identified as a key
strategic driver for reaching the national goals set by the government. For more than a decade, the
Vietnamese Government has put emphasis on ICT to develop and foster economical and social
development. Vietnam has defined a strategy2, whereby priorities are set on certain areas defined
as critical for an ICT enabled future:
       »     Adapting the legal framework for ICT development.
       »     Implementing Government wide networks to increase data transfer between the different
             Government agencies.
       »     Establishing technical standards and an interoperability framework in Government.
       »     Developing the public access to information through the use of ICT
       »     Training human resources to using ICT.
Areas of interest to GoV can be identified in figure 2, below.




                                  Figure 2 - GoV priority areas on ICT – Ministry of Posts and Telematics, 2003




2
 “Developing Information and Communication Technology in Vietnam’s Provinces�, GICT ICT Policy Division, World
Bank


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Specific objectives and indicators. This priority framework is accompanied by specific objectives
set by the Vietnamese Government. These benchmark the progress of ICT development against
the average level of the countries within the Association of Southeast Asians Nations (ASEAN).
These objectives include:
       »     Developing ICT in key economic sector in order to facilitate e-commerce and increase the
             level of services for citizen and business. The objective is to reach a level above the
             average of the countries in the Association of Southeast Asian Nations (ASEAN).
       »     Making ICT a leading industry, with an annual growth of 20-25 % and a yearly turnover of
             $6–7 billion by 2010.
       »     Intensifying ICT infrastructure on a national level, to provide high-quality and affordable
             ICT services.
       »     Develop and improve education and training in ICT so as to reach the level and quality of
             the countries within ASEAN
There has been a continued high growth in both the ICT sector with a total telephony (fixed +
mobile) penetration of 59.9 subscribers/100 inhabitants. The number of internet users has reached
5.24 million with a penetration of 4,8%, of which 1,2 million are of broadband. ICT penetration is
expected to grow at 8% annually.3. Figures 3 and 4 show different data regarding the evolution of
several ICT indicators in Vietnam from year 2000 to 2007.




                        Figure 3 – Fixed line and mobile line subscribers evolution in Vietnam – ITU webpage, 2009




3
    Data from International Telecommunications Union, www.itu.nt.


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                         Figure 4 – Internet and Broadband subscribers evolution in Vietnam – ITU webpage, 2009



2.3.3           Sector Deregulation and Evolution




                                   Figure 5 - Vietnam’s ICT Sector Players – WB Global ICT Department, 2006




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Vietnam has progressed cautiously with ICT sector reform, undertaking significant organizational
changes. However, the state continues to heavily regulate this sector. The ICT sector is currently
managed by the Ministry of Information and Communications (MIC) that took over the
responsibilities of the Ministry of Post and Telematics (MPT). The MIC is further represented by the
Department of Information and Communications (DIC) which is present in each province. The
Vietnamese government has been quick to recognize new and upcoming operators in the recent
years, including them in the ever-increasing list of licensed network operators.
The operators licensed by the Government of Vietnam include licensed network operators offering
telecom services as well as operators in the mobile service sector. The government has generally
been more open to the licensing of the mobile service sector, resulting in an influx of mobile
service operators the last few years. This evolution has resulted in a changing industry
environment whose players can be seen in figure 5 in previous page.

2.3.3.1 Network Operators
Vietnam Posts and Telecommunications (VNPT). The Viet Nam Posts and Telecommunications
(VNPT) was created in 1993 with the responsibility of operating the national telecom services as
well as the coordination between all provincial and city offices. The responsibilities of DGPT were
reduced to the management of the national network, as well as the regulation, planning and
strategy of the telecom sector.
Total revenue for VNPT was VND 53,100 billion in 2008, increasing by 17.5%.
Saigon Postel Corporation (SPT). The Saigon Postel Corporation was one of two other licensed
operators offering telecom services to the public that were subsequently set up after the VNPT.
The operator is based in Ho Chi Minh and began operations in late 1996. It worked jointly with the
US-based Telecommunications American International (TAI) under the name USA TeleCom. The
joint venture company was granted a license for basic telephone services, a cellular network, an
international long-distance gateway, telephone calling centers and telecommunications equipment
manufacturing facilities as well as cable and broadcast television services.
Total revenue for 2008 was VND 1970 billion, with 10,445 new fixed line subscribers with a total of
6.7 million subscribers (including the mobile phone sector).
The Military Electronics Telecommunications Company (Viettel). The third operator, the
Military Electronics Telecommunications Company, known as Viettel, began operating a VoIP
service between Ho Chi Minh City (HCMC) and Hanoi in October 2000, providing the first
competition for VNPT in domestic fixed line services. Competition was not truly market-driven,
however, as all price changes still had to be approved by DGPT and the central government.
Nevertheless, Viettel offered a 50% discount compared with VNPT’s charges and the service
immediately proved popular. Viettel is now licensed to offer cellular, paging and fixed wireless
services.
Viettel continues to grow rapidly, with revenues over VND 30,000 billion in 2008. They continue to
successfully expand their mobile and transmission network.
Vietnam Maritime Communication and Electronics Company (Vishipel). Vishipel was founded
to provide Inmarsat services and costal information for maritime shipping facilities. The operator is
based in Hai Phong and aimed to offered VSAT services and lease channels through its satellite
stations. Vishipel has also developed a VoIP, linking the US and Vietnam in 2004. They have since
developed, upgraded and expanded their VoIP telephony network. Their total revenue in 2008 was
VND 57 billion.

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EVN Telecom. In October 2001, the DGPT granted a telecoms license to a subsidiary of the
Vietnam Electricity Corporation (VEC). The new licensee, the Electricity Telecommunications and
Information Company (EVN Telecom), is the second VEC unit following Telecommunications Joint
Stock Company, to get a telecoms license. The new company was the fifth licensed telecom
operators in the country, and has received a license to set up networks, and lease its cables for
domestic long-distance calls and telecoms services using Internet Protocol (IP) service.
EVN Telecom offers both domestic and international fixed lines, as well as mobile and internet
services. In 2007, it was licensed to deploy a 3G CDMA network in the Vietnam. It currently has an
11% in the mobile phone sector. Their total revenue reached VND 3,000 billion with a total number
of 3.2 million telephone subscribers.
Hanoi Telecom Service Joint Stock Co. (Hanoi Telecom). In October 2002, the government
announced that it had approved the establishment of Vietnam’s sixth telecommunications
company. The move came as the government continued its effort to provide further competition in
the telecom sector. The new operator, Hanoi Telecom Service Joint Stock Co, was the second
company besides dominant state-controlled VNPT allowed to provide a full range of telecom
services, including Internet services, domestic and international telephony and mobile
communications services.
FPT Telecom Corporation. FPT Telecom Corporation started providing internet services in 1999
and currently has a 30% share of the internet sector in Vietnam. In April 2007, FPT Telecom was
granted a license to provide VoIP service. It has introduced new services such as online TV and
music services. FPT continues to develop and upgrade their international internet infrastructure
and currently have 420,000 internet subscribers with 150,000 new internet subscribers in 2008.

2.3.3.2 Mobile Services Sector
In the mobile sector, the first network setup was Call-link in 1992 as a result of a BCC between Ho
Chi Minh City Post and Telecom and Singapore International Telecom Company.
Mobifone and Vinaphone were then set up as mobile companies, both owned by VNPT.
       »     Mobifone was established through a BCC with the Swedish company Comvik AB and was
             founded in 1993 and is currently the most important mobile operator network with a share
             of 37% of the mobile phone sector and 12.8 million new subscribers in 2008.
       »     Vinaphone was founded in 1996 and operated solely by the Vietnamese network Vietnam
             Telecom Services Company, another subsidiary of VNPT. It contributes to 16% of the total
             mobile phone market in Vietnam and attained 7.1 million new subscribers in 2008.
Aside from these two dominant mobile companies, there are five other existing providers:
      1. Viettel received a mobile network license in 1998 and started operations only 2004. It is
         currently the second most import mobile operator network with a share of 31% of the
         mobile phone sector. They attained 24.5 million new subscribers in 2008.
      2. CityPhone was launched in December 2002 by Hanoi Post and Telecom and is the only
         Vietnamese mobile operator to utilize the PHS technology. However this mobile operator
         has been trailing behind the bigger mobile companies in terms of consumers.
      3. S-Fone is a joint venture between Saigon Post Corporation and the South Korean
         companies SPT and SLD Telecom and was founded in July 2003 in Ho Chi Minh City. S-
         Fone was the first national mobile phone network that operated using CDMA. It currently


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            offers video and television on demand, as well as mobile internet. S-Fone currently has
            6.48 million mobile phone subscribers with 3 million new subscribers in 2008.
       4. E-Mobile was founded in 2007 by EVN Telecom has been licensed to operate a 3G CDMA
          network. EVN Telecom received the license to develop 3G mobile phone services for 15
          years in March 2009 and has underwent a requirement to develop these services in a three
          months time from the provision of license.
       5. HT Mobile was launched in 2007 under an investment license granted to the Hutchinson
          Telecom – Hanoi Telecom partnership. This partnership is a BCC with duration of 15 years
          under which the two sides aim to develop a CDMA 2000 network for the provision of mobile
          services in Vietnam. However in March 2008, the operator switched off its CDMA network,
          operating GSM-based mobile.

2.3.3.3 New Policies and Measures
a)     Universal Service. The government has also put in place policies to encourage the
       participation of all economic sectors in developing the telecommunications industry. One of the
       objectives of telecom development was to create diversified quality services to meet customer
       demands regardless of place and time. To achieve this, all telecommunications businesses
       must contribute to the development of telecommunications infrastructure in remote areas,
       where trading is non-profitable. Formerly, only VNPT had the responsibility to provide service
       to all in this manner. Under new regulations all three fixed-line telephone operators − VNPT,
       Saigon Postal and Viettel − were obliged to expand access to services through licensing
       mechanism and tariff distribution.
b)     VNPT Separation. From January 1, 2005 VNPT separated its telecommunications and postal
       businesses (the new corporations were called the Vietnam Telecoms Corporation and the
       Vietnam Postal Corporation) and started the equitization (privatize) nearly all of its
       subsidiaries. This process ended by the end of 2007 and VNPT became a holding company.
       The group comprises independent companies mainly focusing on telecoms, information
       technology and postal services.

2.3.4           Universal Access and Service Fund
Foundation. The central government founded the Vietnam Public-Utility Telecommunication
Service Fund (VTF) which officially opened in 2007. The VTF uses the American public utility fund
model and their focus is on the 187 districts and 153 communes in the Vietnamese provinces. The
main objective of the VTF is to act as a non-project fund for telecommunications organizations for
the maintenance of public utility services for the citizens and to loan capital to telecommunications
enterprises to upgrade infrastructure network for the citizens.
VTF was founded in order to confront what they recognized as the main hindrance to the further
development of ICT development: Provincial ICT infrastructure. In 2008, only a 16.77% believed
the general provincial infrastructure quality was good or very good4. In comparison, a 61.02%
believed that the quality of the provincial telecom services were good or very good.
Objectives. The organization is responsible for the development of telecommunications services in
rural areas. It plans projects, then fund and execute them. It also aids in increasing awareness of


4
    USAid, “Provincial Competitiveness Index 2008�. 2008.


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state policy as well as offers training courses for staff working in telecommunications enterprises.
Their source of funds come from the state budget with is supported by initial capital. They estimate
the funds to 2010 to be about US$400 million. Enterprises contribute to this fund on a basis of
revenue with a 3% contribution from any foreign aid revenues received, 2% for international phone
line services and 1% from long distance calls within the country. No contribution is taken from the
internet sector because internet development is currently one of the sectors for promotion.
The VTD aims to provide public telephone service access to 100% of all communes by 2010 and
public internet service access to 70% of the communes. The MIC has assigned four network
operators to assist with these objectives: VNPT, Viettel, Vishipel and EVN Telecom. The estimated
budget to implement this program is VND 1,200 billion.
Selection criteria Selection criteria exist for the geographical scope of the VTF. These areas
include 148 districts and 504 communes in 43 provinces. These locations satisfy one or more of
the following criteria:
      1. Districts with a telephone subscription of less than 2.5/100 inhabitants.
      2. Extremely difficult socio-economic conditions
      3. Located outside the public utility telecommunication service area and do not have public
         internet and telephone access points
Functions.
      1. To receive and mobilize financial sources according to the provisions of Article 6 and
         provide financial supports for public-utility telecommunication service-provision programs
         and projects, according to Article 7 of this Decision.
      2. To perform the tasks assigned by the Ministry of Posts and Telematics regarding
         coordination in elaboration and execution of programs, plans and projects on the provision
         of public-utility telecommunication services.
      3. To organize selection and appraisal of public-¬utility telecommunication service-provision
         projects supported by the Fund according to the State's regulations.
      4. To monitor, sum up and report on the implementation of public-utility telecommunication
         service-provision programs, plans and projects supported by the Fund, and the Fund's
         financial situation according to regulations of the Ministry of Posts and Telematics and
         competent State agencies.
      5. To preserve its charter capital.
      6. To manage its capital and assets under law provisions.
      7. To observe the State's regulations on financial management, accounting and auditing as
         well as other regulations related to operations of the Fund.
      8. To perform other tasks assigned by competent authorities.
The VTF also offers two main types of public utility services:
      a) Universal telecommunications services that include standard telephone and internet
         access services;
      b) Compulsory telecommunications services that include emergency communication services,
         telecommunications services for dealing with situations of natural calamity and fixed
         telephone enquiries.


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2.4             Atos Consulting Analysis
2.4.1           Government decentralization
There has been a delegation of tasks from central to local government units. Improvement in
service delivery and the increased and more transparent public participation have already been
noted. However, the current administrative system is still only decentralized in a limited sense. No
clear mechanism that promotes the local government’s pro-activity and creativity is offered for
planning and management.




                            Figure 6 - Compromise between planning and management skills and local information


There is a certain compromise between knowledge and information at both government and local
level, displayed in figure 6 above:
       »     Lack of local information at government level. While the central administration has
             expertise and its national programs reflect both national concerns and the means of
             delivering expertise to the provinces, central administrators may not have enough local
             information to make decisions. Local planning and management tasks, especially at the
             district and commune levels, require professional expertise. The system of top-down
             planning in general may not allow an effective way of assessing performance, since there
             are incentives to report superlative results.
       »     Lack of knowledge at local level. Decentralization of planning, management and fiscal
             responsibilities requires a certain level of knowledge of planning, management, and
             finance. However, the educational level of officials and members of local representative
             bodies is comparatively low and a long-standing issue. At the local level, Atos consulting
             felt that there was willingness among local officials at the district and the commune level to
             take on responsibility for their area. However, their actual capacity in practice for this
             increased responsibility may be insufficient for the task.



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Vietnam has made a notable progress in decentralization and should focus on improving their
intergovernmental organization networks and dedicate time and expertise to the implementation
process in order to achieve an optimum outcome.

2.4.2           Sector Deregulation and Evolution
Liberalization and private participation. The government, in its effort to achieve full competition
in the telecommunications sector has to some extent opened up the domestic telephone, mobile
and Internet markets. However the telecommunications industry in Vietnam continues to be
dominated by VNPT who remains very much a dominant player. More companies are joining the
rush to provide telephone and Internet services.
Until the accession of Vietnam to the WTO, foreign investors could finance capital investment and
get share in revenues but had no ownership share, and little or no management control at all. The
lack of ownership by foreign investors, together with limited management control had extremely
negative consequences which led to a high investor risk. This resulted in the reduction of capital
availability, reduction in the transfer of management expertise to the firm. Many proposed projects
with foreign partners have not been realized or have been cancelled due to excessive bureaucracy
and these unfavorable market conditions.
Regulatory issues. However, even in this rigid regulatory environment that prevents genuine
competition and precludes market forces from determining the optimal systems for the Vietnamese
environment, there is an increasingly large growing private participation. This takes various forms
from joint ventures, mainly with foreign telecommunication investors, as well as business
cooperation contracts which are less popular now than they were before.
Despite all the government’s effort in privatization and liberalization, there is no clear licensing
policy and timetable for liberalization. The licensing policy has different terms and conditions
concerning competition in the market and is important as it is required for telecommunications
sector market entry. The lack of clear legislation and guidelines for privatization and liberalization
has proved to be less of a deterrent to local Vietnamese telecommunications enterprises than
foreign companies. There is less bias towards SOEs as they go through the process of equitization
(privatization). Banks are also increasing allowing loans to private firms, increasing the growth of
the private sector.

2.4.3           Vietnam Public-Utility Telecommunications Service Fund
The presence of a non-profit organization such as VTF to aid in provincial ICT infrastructure
development aids brings about many benefits for the provinces who may otherwise not receive the
financial aid required for development of ICT infrastructure and services. However, the fund lacks
many aspects that have yet to be developed:
       »     Project management deficiencies. One of these aspects is the lack of basic project
             management in the organization. The fund currently does no detailed research on the
             project proposals they receive and approves them only on the basis of sufficient funds
             being presently available. The approval of projects without sufficient evaluation may lead to
             problems for future development such as incompatibility and a lack of integration in the ICT
             sector between the provinces, communes or districts.
       »     Obsolescent technologies. Furthermore, a project proposal may consist of outdated
             plans or technology that has been replaced with a newer and more efficient one. A
             thorough analysis should be carried out and integration with project proposals from

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             neighboring communes or provinces should be performed. Atos Consulting recommends
             the establishment of a project management office in VTF for a unified coordination of
             objectives and integration of ICT infrastructure within and between the provinces.
       »     Competition preservation. The establishment of a project management office will also aid
             the VTF in overcoming the main problem faced by most Universal Service Funds in the
             telecommunications industry, that is to say, the preservation of an anti-competitive
             structure. The progress of ongoing projects and impact of past projects will have to be
             evaluated regularly to ensure that subsidies are not allocated to projects that are outdated
             or do not bring about a positive impact to the province or commune. Constant evaluation
             also has to be carried out on companies that receive subsidies to ensure that their
             implementation plans remain up to date and relevant.
       »     Mobile sector. Another weakness of the VTF that cannot be overlooked is that it cannot
             finance the mobile services sector. This is an issue that should be further looked into
             especially with regards to the increasing demand and provision of mobile broadband
             services. The scope of the VTF should be further analyzed and possibly expanded to
             include the possibility of financing mobile broadband services should they be required.

2.4.4           Provincial ICT Master Plans
Atos Consulting found that, in parallel to Decree 64, some provinces have completed an ICT
Master Plans. At this stage of writing, it was found that 35 out of the 64 provinces have completed
such Master Plan with recommendations from the Ministry of Information and Communication
(MIC).
Atos Consulting visited and collected data from five provinces during the course of two field
missions: Thai Ngyuen, Dong Nai, Nghe An, Hai Phong and Khanh Hoa. In the five provinces, their
ICT Master plans were made with consultation from IVTECH -a local ICT consultancy firm
specialized in ICT projects, which is Atos’ local contact in Vietnam- as well as with guidance from
the MPI and MIC. In Thaingyuen, Nghe An and Hai Phong, these ICT Master plans were found to
be better prepared and more relevant than the ICT Master Plans of the other provinces.
1. Stakeholders knowledge. Regarding the stakeholders’ (ministries and provinces) knowledge in
ICT projects and investments, Atos Consulting observed that there was:
       »     A rough common understanding of what an ICT project is and its major components
             (hardware, software, services, equipment, networks, training, awareness)
       »     A restrictive shared understanding about the meaning of e-Government and on how to
             develop it. E-Government is perceived as mainly to deliver public services on-line.
2. ICT Master Plans strengths. Regarding the provincial ICT Master plans, we can highlight the
following strengths:
       »     ICT Master plans are aligned with the Government’s overall ICT strategy
       »     All ICT Master Plans have a homogeneous structure that are in line with international best
             practices
       »     All Master Plans include a section listing the investment projects and their individual
             budgets.
3. ICT Master Plans weaknesses. However despite the recognition that a significant amount work
has been invested, the following weaknesses have been observed in the Master Plans:

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       »     Inputs from both the Department of Information and Communication (DIC) and from the
             Department of Planning and Investment (DPI) should be made clearer
       »     Improvements could be made in the area of management, coordination of project
             participants, and evaluation. It was found that the current organizational structure in the
             above mentioned provinces with relation to the ICT sector lacked proper project
             management. It was also observed that in all five provinces, project portfolio management
             information was found to be severely lacking for the proposed ICT projects.
       »     Description of projects lack essential information such as: objectives, expected results, and
             rationale, with their corresponding description and milestone. At time of writing, the project
             proposals that Atos Consulting has received lacked essential information such as
             objectives, expected results, rationale and costing.
       »     The project descriptions received did not contain any planning whatsoever, but rather, only
             contained the title of the project with an estimated budget and duration. A general
             description was provided for some of the projects; however this was insufficient to
             understand neither a clear set of objectives nor the process of implementation.
       »     A problem also exists in the quoted budget for each of the proposed project. Many times,
             these budgets do not realistically indicate the actual budget required for the project but
             rather, is projected based on what the province believes acceptable by the central
             government, or in other words, a budget that lies within the means of the funding source.
             This is done so that the project would be approved of and funds would be obtained,
             despite being insufficient for the complete implementation of the project.
       »     Atos Consulting also has reservations about the quoted duration for each project. Without
             a proper planning of the project activities or the resources that the project would employ,
             accurate project duration cannot be calculated.




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3               Current Status of ICT in Vietnam Provinces

3.1             Summary
Over the last decade the Vietnamese government has prioritized and taken initiatives to boost the
development of the ICT industry in Vietnam, particularly in software production, Internet
infrastructure, IT education promotion, and human resources development. With annual growth
rate around 25-30% Vietnam has attracted increasing interest from abroad. With new policies to
encourage private ICT university/training institutions, to attract foreign investment in ICT and to
design a legal framework for e-business, the government seems well prepared for ICT
development in the future
In the scope of the decentralization process, it has been noted (as of February 2009) that 35 out of
64 provinces had completed their provincial ICT Master Plans, in compliance with
recommendations emitted by the Ministry of Information and Communication. This implies a certain
degree of impulse and extension of this process, which is expected to grow in the course of the
next months / years.
ICT infrastructure, although growing and improving annually in the provinces, continues to be one
of the more pressing constraints on economic growth and productivity in Vietnam. This situation is
due not only to a lack of funds but also to poor project management. Some of the problems noted
are the incompatible and sometimes conflicting master plans that link infrastructure from province
to province, weak prioritization and poor allocation of budgets and resources, and the lack of
attention paid to infrastructure demand in the fastest growing provinces. A way to improve the
planning would be the design of networks in the broader context of national development strategies
focused on project coordination between neighboring provinces. This would save money and time
as provinces would not invest in identical projects. During our field missions we also found a lack of
adequate IT infrastructure in the government ICT departments of the provinces visited.
There appear to be some WiMax initiatives mainly on provinces with a difficult extension of
telecommunication networks as a cost effective way to give access to people in these areas.
Examples of this can be found in the provinces of Laco Cai and Ta Van. This way, WiMax would
help to extend telecommunication penetration in hard to reach locations where the profitability on
investments would be too low for the implementation of a wired broadband infrastructure.
Regarding ICT Applications and Services, with the decentralization, provinces are given a large
role to play. The level of sophistication varies drastically. Some provinces have implemented e-
commerce platforms and applications for education, health and rural development as well as
websites for the purpose of providing educational information and entry level examinations.
E-Government initiatives in Vietnam have been marked by Project 112, launched in 2001 and
carried out under the management of the Office of Government. It was composed of six
components and a total of 116 subprojects. Project 112 encountered multiple difficulties and was
shut down by the Prime Minister in April 2007.
The cancellation of this project can be attributed to a lack of coordination, lack of clear
responsibilities for certain areas as well as absence of guidelines for the planning of the projects,
insufficient management and coordination capacity, procurement regulations that were




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inappropriate for such project and a lack of systematic assessment of the progress of the different
projects.
Following the UN e-Government reference model, Vietnam has competed in most of its provinces
the first stage of evolution: Emergence. Few provinces have reached the second stage of
evolution, Enhanced. In most of the provincial plans, there are proposed initiatives to reach the
stage of eTransaction. A critical problem seems to be the clear lack of e-Government awareness
among the citizens.
Finally, concerning Human Capacity and Resources, there is a certain need to promote knowledge
on ICT systems in the educational systems as well as the use of ICT in services and applications in
different industries. However, the main weakness is the common absence of project management
knowledge and skills which must be addressed as soon as possible.


3.2             ICT dimensions
Atos Consulting uses four main dimensions to analyze and evaluate the ICT sector. The ICT sector
comprises of many different components which can be grouped into these four dimensions that
include ICT infrastructure, ICT applications and services, e-Government and human capacity and
resources. These four dimensions are also reflected in the four pillars that have been identified by
the Ministry of Information and Communications (MIC) and the other Ministries and provincial
departments involved in the ICT sector. There, also, is a relatively extended framework in the
degrees extension of ICT, shown in figure 7. These degrees will interact with the four pillars.



                      Readiness                          Access                    Usage           Value


                                Figure 7 - Degrees of extension of ICT – WB & Islamic Development Bank, 2006


ICT Infrastructure. This dimension includes ICT infrastructure available to the provinces and their
access to basic ICT. In this dimension, Atos Consulting measures the telephony, mobile and
internet penetration. The telephony penetration refers to the number of telephone lines that
connect the subscriber to the public network. Mobile penetration refers to the number of mobile
cellular telephone subscriptions that presently involves different networks including the most recent
3G CDMA network. The number of internet users refers to both the number of internet subscribers
as well as users who utilize public or shared internet access. ICT infrastructure continues to grow
at an increasing rate, however this growth is mainly attributed to growth in the cities and is uneven
in the provinces.
ICT Applications and Services. This aspect represents applications that include software that
have been specifically designed for ICT use. ICT services are those that assist citizens in different
aspects of their lives, both professionally and personally. In this dimension, certain concrete
examples are examined, such as e-commerce and e-learning. E-commerce will facilitate
transactions between businesses and customers as well, making it more efficient. It was found that
there was the presence of these applications and services varied greatly from province to province.
E-Government. The e-government dimension represents the use of ICT for the provision of
governmental services in order to create relations with the citizens, businesses and other parts of


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the government. The use of ICT for this results in a more effective delivery of government services,
more efficient management and increased access to information. This in turn causes a higher level
of transparency, reduced corruption between governmental officials and huge reductions of costs.
Atos Consulting examined the reasons for the closing down of Project 112 as well as current e-
Government initiatives.
Human Capacity and Resources. This component includes the level of ICT skills in Vietnam and
is vital especially in developing countries where education levels are still lacking. The lack of
human capacity and resources is a huge obstacle for the effective use of all three dimensions as
mentioned above. Without this, the use and impact of ICT technologies, applications and services
will never reach their intended potential and bring about the benefits associated with them.
A diagram of the relationship between players and analysis dimensions is shown below in figure 8.
Actions to be proposed will be directed at the different players in the different ICT dimensions.




                              Figure 8 - ICT Analysis Dimensions - Ministry of Posts and Telematics, 2003



3.3             ICT Infrastructure
Penetration and use data. ICT infrastructure continues to grow and improve annually in the
provinces. There has been a continued high growth in both the ICT sector with a total telephony
penetration of 97.5 subscribers/100 inhabitants and a mobile penetration of 85.5 subscribers/100
inhabitants. The number of internet users has reached 20.67 million with a penetration of 24.2%, of
which 2 million are of broadband. ICT penetration is expected to grow at 8% annually.5
However, the distribution of this growth is uneven. Currently, there is a penetration of 59.9
telephones per 100 citizens (including both fixed and mobile lines), although a minimum of 1.2
telephones per 100 citizens was also noted in some provinces. In 2008, a median of 13 hours per
month was observed for telecommunications outages with a 94.18% respondents assessing
telecommunications quality as good or very good.


5
    “Vietnam ICT Outlook 2007�, Le Truong Tung, 2007.


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Lack of adequate ICT infrastructure. However, ICT infrastructure continues to be one of the
more pressing constraints on economic growth and productivity in Vietnam. Inadequate and
ineffective infrastructure hampers market and trade access and participation and therefore
obstructs competition. Demand for investment in infrastructure keeps on increasing but despite
efforts from the government to satisfy demand, only marginal results have been attained.
During our field missions we found a lack of adequate IT infrastructure in the government ICT
departments of the provinces visited. IT infrastructure does not satisfy the requirements of
information and data processing, and business areas, lacks in timeliness and is poorly integrated.
For example, LANs have been integrated, but there is hardly any data access through networks.
WANs and Internet connections do not satisfy the requirements of outside data exchange and of
providing public services. IT infrastructure at the PSOs and DSOs within the GSO organizational
structure are also short of machines as well as suffering low quality of facilitates, for instance, a
large number of machines are outdated, with poor configurations and prone to errors/corruptions.
WiMax initiatives. Some recent pilot and field trials in WiMax deserve special mention.
      a) The Vietnam WiMax Alliance between USAID, Intel Corporation and the Vietnam Data
         Communication Company was the first WiMax initiative taken in Vietnam. This initiative was
         carried out as part of USAid’s Last Mile Initiative and Intel’s “World Ahead Program� to
         demonstrate that broadband Internet could be installed in any part at a fair and reasonable
         cost. The initial deployment of WiMax took place in the Lào Cai province using fiber
         backhaul in 2006.
             Lào Cai is a remote agricultural province with a population of 600,000 that comprises of up
            to 25 different ethnic groups. It is located in the northern mountainous regions in Vietnam
            and is one of the poorest regions in the country with a GDP of $330/capita. A few
            community phones that were previously shared were replaced with a single WiMax base
            connection that reached out to 20 receiving units6, providing high speed broadband internet
            access as well as VoIP services.
            The aim of the installation of a WiMax network in Lào Cai was so that the local traditional
            industries such as agriculture and forestry could use the new telecoms infrastructure to
            expand their business, including across the border with China as well as to attract other
            types of foreign investments.
      b) The second initiative was carried out in Ta Van, an even more remote village across
         mountainous terrain that made it impossible for terrestrial internet connectivity. A satellite
         had to be used to spot-beam internet connectivity down to a WiMax network located on the
         ground due to limited mobile coverage and only 2 phone lines in the village, eliminating any
         need for a wired infrastructure.
Both initiatives had great implications for these remote provinces located on the outskirts. WiMax,
both on its own as a combination with a satellite has been proven to be a cost effective way to
provide access to people in these areas. Furthermore, these installations could be easily scaled for
use in other locations.
Following these projects, four other Vietnamese cities – Bac Ninh, Da Nang, Hanoi and Ho Chi
Minh City have been chosen for WiMax pilot tests and implementation. The Vietnamese


6
  An Alvarion BreezeMAX base station was used together with 20 WiMAX fixed-access customer-premises
equipment (CPE) devices. The BreezeMAX antenna was installed 70 metres above the ground on a local
tower with the base station connected to a fiber-optic backhaul service.

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government has permitted six operators to carry out this trial with a focus on mobile and fixed
telephone services.


3.4             ICT Applications and Services
Great variation of applications and services among provinces. With the decentralization of the
central Vietnamese government as described in the previous chapter, provinces are given a large
role to play in the development and implementation of ICT applications and services. The level and
sophistication of the ICT applications and services found in each province varies drastically.
Provincial ICT Applications and Services examples.
       »     In the provinces of Lao Cai and Ho Chi Minh, provincial authorities have established an e-
             marketplace which supports e-commerce of local businesses. An e-commerce platform
             was designed and established so as to promote e-commerce activities; in addition, training
             on how to use the e-marketplace was provided to interested businesses. ICT applications
             as such are used more frequently in businesses located out of the economic hubs.
       »     Similar ICT applications have also been implemented for education, health and rural
             development. Some provinces have posted online websites for the purpose of providing
             educational information, e-learning and even for taking entry level examinations. Health
             networks have also been set up, allowing doctors and medical experts to provide visual
             consultations for patients located in hard to reach areas of the province. ICT applications
             for agriculture and rural development have also been created, utilizing networks and
             forums to share experience and give advice to other farmers.
       »     The three provinces of Ha Tinh, Nghe An and Thanh Hoa have agreed to develop ICT
             applications so as to be able to unify data and share ICT experiences. The development of
             applications like these will foster cooperation and data sharing across provinces and even
             improve local government coordination.


3.5             E-Government
Project 112. E-government initiatives that have been developed by the Vietnamese government
and provinces have often been top-down, designed by policy makers, lacking viability and
sustainability. An example would be Project 112 that was launched in 2001 and carried out under
the management of the Office of Government in response to the Directive 58, with focus of the
modernization of administrative systems. This project had a total capital of VND3.8 trillion and
consisted of 6 components including:
       1. Computerization of state administrative management at central level ministries and
          agencies
       2. Computerization of state administrative management at provincial level
       3. Building of a national database system and specialized database systems
       4. Training of public officials in IT and training of IT specialists in state administrative bodies
       5. Upgrade of the Government wide-area network (CPNET)
       6. Building of safety and confidentiality system



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These 6 components included a total of 116 sub-projects of which 64 were to be implemented at a
provincial level and the rest at the ministerial level.
Project 112 ran into many problems with an estimated amount of VND200 billion being misspent
out of the VND1.16 trillion spent on the project before it was shut down in April 2007 by the Prime
Minister.
In the project, hardware installation significantly preceded other investments with widespread LAN
and PC hardware investment and installation as well as the establishment of information and data
centers, all carried out with the risk of technological obsolescence as the software applications had
yet to be developed. The Government wide-area network remained unfinished and its responsibility
was delegated to the Ministry of Post and Telematics (MPT) and is the responsibility of the MIC
today. The MIC is continuing expansion to this government wide-area network with the majority of
the provinces already connected and plans to connect the other provinces. In this way, hundreds of
data centers that cost a total of VND4 billion (US$2.6 million) were built across the country even
before the databases had been established. The establishment of six targeted national databases
was entirely unsuccessful and the socio-economic national database was the most advanced one.
Applications within Project 112. A total of three applications were piloted and (partially)
implemented. The first involved websites at the administrative level by ministries, agencies and
provinces. However, many of these websites remain unfinished, while others are simply not
updated. Those that were completed only offered limited and basic information with few offering
online services, and lacked a coherent interface.
The second application was a document management system for Ministries and the People’s
Committee. This has yet to be proven useful as there is a lack of regulation enforcing its use.
The third application was intended for the collection of socio-economic statistics for the provinces.
More than 13,000 IT staff were trained under Project 112. The fees for the courses were marked
up much higher than the market prices and the treasury lost up to VND105 billion for only 19 days
of training. Moreover, many provinces protested to the fact that the majority of the training modules
taught basic computer skills that their IT staff already possessed.
Problems with the project 112. The problems that Project 112 met with can be attributed to a few
reasons:
       »     There was a lack of coordination between ministries and provinces, preventing a
             standardization of applications and fragmentation of software systems.
       »     There was a lack of coordination between the Ministry of Finance, Ministry of Planning and
             Investment and the Office of Government in the implementation of the project. This
             resulted in a lack of clear responsibilities for certain areas as well as the absence of
             guidelines for the planning of the projects.
       »     There was an inadequate conceptualization of project components
       »     There was an inadequate assessment of the project design
       »     There was insufficient management and coordination capacity for such a large program as
             well as a lack of best practices from which to guide the project.
       »     There was a lack of systematic assessment of the progress of each projects




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       »     The procurement regulations were inappropriate for such a project. These regulations were
             developed by the MPI for construction projects and were not suitable for IT software
             applications
       »     There was no reorganization of business processes even though existing procedures did
             not function in many cases.
       »     There was an absence of enhanced implementation oversight that is often critically
             important for ICT projects
       »     There was a lack of consideration for applications and content to drive take-up of computer
             use by the end-users
In general, there was an insufficient amount of planning dedicated to the project and outdated
objectives. The e-Government projects were planned based on the governments’ demands rather
than the demands on the citizens and were focused on internal administration instead of as a
gateway of communication between the government and the citizens.
Current e-Government initiatives. Most of the current e-Government initiatives in the provinces
seem to be confined to the following types:
       »     Applications in finance and asset management
       »     Data collection system for socio-economic data
       »     E-Office and e-organization program systems deployment
       »     Software applications to support state agencies
       »     Data management and computerization of administrative data
       »     Development and improvement of provincial portals
       »     Development of information portals and websites for provincial state agencies


3.6             Human Capacity and Resources
The main findings of Atos Consulting during the two field missions are:
       »     Lack of awareness and culture. The important role of IT application has not been fully
             understood by staff responsible for ICT management and development. On the other hand,
             due to urgent needs for processing a large amount of statistics, the GSO departments well-
             understand the role and effects of IT applications. However, a number of senior ICT
             managers at all levels within the Ministries have still not grasped the significance of IT
             applications. The cooperation culture amongst all departments is one of loosely-federated
             groups who operate to a large extent independently, and have little motivation to
             collaborate and share. This culture of cooperation has to be developed.
       »     Shortage of specialized ICT staff. The Ministries and departments in the provinces do
             not currently have an ICT specialized department with a coherent organizational structure
             and capacity to handle required work.
       »     Shortage of specialized training in project management. Most of the training classes
             taken by ICT staff are in basic IT applications; the number of staff trained in project
             management skills is low.



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3.7             Atos Consulting Analysis
Atos Consulting perceives the different sectors as described among two qualities, their measurable
character and their strategic impact, as shown in Figure 9. The greater the circle, the bigger the
impact and effort to improve the area.




                             Figure 9 - Investment areas by their strategic and measurable character – ITU, 2007



3.7.1           Current status of the ICT Sector in Vietnam
1.     Positive prospects for ICT development in Vietnam. Over the last decade the Vietnamese
       government has prioritized and taken initiatives to boost the development of the ICT industry
       in Vietnam, particularly in software production, Internet infrastructure, IT education promotion,
       and human resources development. With annual growth rate around 25-30% Vietnam has
       attracted increasing interest from abroad. With new policies to encourage private ICT
       university/training institutions, to attract foreign investment in ICT and to design a legal
       framework for e-business, the government seems well prepared for ICT development in the
       future.
2.     The ICT industry and business conditions. The ICT industry in Vietnam is among the
       fastest growing sectors and has become an important sector for the national economy. It is
       estimated that the turnover of the sector reached USD 7.1 billion in 2007, accounting for 10%
       of GDP.
       The software industry alone kept growth rates of 30-40% from 2002 to 2007, slowing down to
       “just� 20% in 2008, partly caused by the financial crisis. Total turnover of the software industry
       reached USD 500 million in 2007, of which one-third stemmed from outsourcing services. In a




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       2009 World Economic Forum survey Vietnam ranked no. 70 out of 134 countries in regard of
       conditions for ICT development, but Vietnam is moving quickly up the ladder.
       Currently, there are about 4,000 ICT companies and around 300,000 employees working in
       the ICT sector in Vietnam. The number of software companies is estimated to 800 with more
       than 45,000 employees. Most of software enterprises are small and there are only about 20
       enterprises with more than 100-500 employees.
       In terms of certificate achievement, only about 20 enterprises have obtained international
       quality management certificates such as CMMI-5, CMM-4 or 3 and more than 40 enterprises
       have been certified with ISO 9001 and ISO 27001.
       The greatest advantage of Vietnam as ICT outsourcing destination compared to similar
       countries in the region is the cost-effectiveness in terms of low salaries, a fast and “keen on
       learning� labor force, pleasant business conditions, and a government strongly committed to
       ICT development. On top comes a very young population always eager to enter foreign
       companies. Vietnamese IT professionals are in general very capable of customizing and
       developing much application software in management, accounting, design, and games.
       Tax conditions for the ICT sector are quite preferential.
3.     Workforce and education. With more than 15,000 university graduates each year, and
       another 10,000 college graduates, IT workforce is keeping up with quantity demand, but there
       is a great need to improve IT training quality, especially at tertiary level. There are many IT
       candidates to recruit, but the quality of their English language skills, team work, and
       professional working attitudes is of concern.
       The salaries of IT professionals are considered relatively high compared to the salary in other
       professions in Vietnam. Presently the monthly salary can expected to range between USD
       250-300 for newcomers, USD 400-500 for the more experienced, and USD 550-900 for the
       best people. IT training is growing with now more than 400 universities, colleges, and
       institutions as a result of government policies to boost IT education. But the education level is
       still not satisfying international demands, and foreign companies should be prepared to train
       newly employed IT colleagues.
4.     Infrastructure. Vietnam is constantly improving its telecommunication and internet
       infrastructure with steady increases of telecommunication subscribers, mainly subscribers for
       fixed phone lines and the Internet and extremely rapid growth in the mobile phone sector.
       Internet broadband has been strongly developed in last recent years, especially since 2006
       with the booming of ADSL broadband Internet. International internet connection capacity has
       reached 52,902Mbps in March 2009. The bandwidth now meets requirements of new services
       such as on-line video and games.
       From 2006 to 2009 the amount of internet users doubled, and today more than 25% of the
       more than 85 million Vietnamese are online.
       Installation/subscription and monthly internet fees have gone down dramatically due to fierce
       competitions among service providers. The installation fee is around USD 25, monthly fee
       from USD 22–85, and fee per MByte from USD 0.25-0.28 cent.
       Among Internet service providers, VNPT remains the dominant one followed by FPT and
       Viettel. Others count EVN, Telecom, SPT, and Netnam.




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5.     Hardware and Technical Support. The HW industry went over the threshold of USD 2.9
       billion in 2007, of which USD 2.178 billion stems from export turnover of electronics and
       computers and about USD 800 million for domestic market. A great contribution to export
       turnover belongs to 100% foreign owned companies.
       The years 2005 and 2006 witnessed investment by multinational companies in the hardware
       industry like Intel’s to build assembly and testing semiconductor labs, and Canon to set up its
       biggest inkjet printer factory in BacNinh. However, ICT products for export are still primarily
       assembled from imported spare parts. 90% of the products are assembled by enterprises
       located in Hanoi, Hai Duong, Bac Ninh and Hung Yen in the North and Ho Chi Minh City,
       Dong Nai, Binh Duong in the South.
       Technical support establishments have mushroomed the latter years. In general, technical
       support is at a satisfactory level and is available in all major cities.
       Prices of hardware products vary depending on the technical features and brand names. PCs
       of famous brands range from USD 650-1,370, while unbranded ones can be bought for
       around USD 200. A standard IBM or HP server costs from USD 1,270-3,960.
6.     Local market opportunities. As an Asian country with a young population and fast growing
       economy, software services and digital content industry including mobile equipment, e-
       newspaper, online databases, and online games are forecasted to be the fastest growing
       areas.
       As a member of WTO since 2007 Vietnam expects to receive increased foreign investment to
       develop also its technological infrastructure. Meanwhile more business in Vietnam means
       better potential for the ICT market.
       Furthermore, with the strong reform strategies proposed by the government, all of the state
       owned enterprises and government agencies are bound to apply IT in management in order to
       improve their efficiency. This indicates even more local business opportunities.
7.     Market threats. Copyright infringement is perceived as the major threat for ICT in Vietnam.
       Strictly compliance to intellectual property regulation is a must for all businesses in Vietnam.
       “Brain drain� from local IT companies to foreign owned companies for higher payment and
       more opportunities of training is also a risk.
       Moreover, the financial crisis might lead to the collapse of small companies who are inefficient
       in management and lagging in reaction to a quickly changing environment.

3.7.2           ICT Infrastructure in Provinces
Infrastructure issues. The infrastructure inadequacy and shortages seem to be due not only to a
lack of funds, but also to poor project management. Many infrastructure decisions that the GoV has
made have been disapproved of and criticized. These decisions include the incompatible and
sometimes conflicting master plans that link the infrastructure from province to province. These
decisions also include lacking administrative and technical expertise for transparent procurement
of private investment in infrastructure for public purposes. Furthermore, weak prioritization and
poor allocation of budgets and resources add on to the existence of limited state and government
financing as well as scarce legal necessities required to organize this financing.
Another critical issue is the lack of attention paid to the infrastructure demand that the faster
growing provinces require. The process of infrastructure allocation fails to notice and neglects


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these demands, such that the infrastructure cannot keep up or continue supporting the growth rate
in these provinces. This is a vital issue that needs to be addressed as infrastructure should not be
a means to reallocate wealth.
National decisions, regional coordination. Infrastructure decisions should remain at national
level. Networks should be designed in the broader context of national network development
strategies. This is so as to ensure, not a corresponding infrastructure for each province, but rather
project coordination between neighboring provinces. This coordination will save both time and
money as provinces would not have to invest in identical projects. Investments in single-purpose
telecommunications network should also not be carried out as it would be a wasted opportunity to
expand the public network7. Decisions at a national level will also ensure the allocation of
investments in ICT infrastructure to the provinces that require it most urgently.
WiMax as an alternative.The success of the WiMax trials that have been implemented in various
provinces in Vietnam has proven that it could be an effective solution for providing
telecommunications solutions to some provinces. WiMax gives a wireless alternative to cable and
DSL for last-mile broadband access and has a service range of up to 50 kilometers. WiMax
connections are easy to establish and implement and can provide wireless internet access of up to
280 Mbps per base station. Less capital would also be needed for investment on heavy equipment.
WiMax would provide broadband access in provinces with hard to reach locations where the
profitability on investments would be too low for the implementation of a wired broadband
infrastructure. WiMax could be a more cost effective solution to wired broadband access as the
high costs and time associated with the deployment of copper and fiber optic lines would not be
required. This high cost is especially true currently as the price of copper has greatly increased in
the last five years.
Together with WiMax, Wireless Broadband Access (WBA) technologies –e.g. CDMA EV-DO,
HSPA- would also take the weight off overloading problems caused by DSL broadband
connections which are common in Vietnam, despite the low broadband penetration rate.

3.7.3           ICT Applications & Services in Provinces
We found a lack of a common framework for ICT applications and services in the ICT departments
in the provinces. This is due to some weaknesses in the following areas:
       »     No standard technological framework which underpins the IT applications and services
             throughout the organizational system from central to local level.
       »     No common guidance and content management of IT applications and services within the
             Ministries and departments.
       »     No quality and information management framework that determines data format, standards
             and obligatory procedures for data exchange.
       »     No standardization of procedures and facilities for acquiring, processing, analyzing,
             consolidating and sharing information and data. Procedures and facilities for Information
             and data are often acquired and maintained on paper, processed manually, and
             accompanied by very limited metadata explaining them.



7
 Chapman, R., Slaymaker, T., & Young, J. (2003). "Livelihoods Approaches to Information Communication in Support of
Rural Poverty Elimination and Food Security". Overseas Development Institute.


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       »     No data repository for common use and for data sharing, and virtually no metadata.
       »     There are a few local systems but they are not very effective even for the areas that own
             them and they contribute nothing as corporate assets.
We also found a lack of adequate software systems. Few application software systems are utilized,
and they are solely for the uses of specific units/areas and have not been integrated. Application
software systems at the Ministries and departments have not been paid appropriate attention and
investment has been inadequate.
It is important to note that investment in software is risky and that it should be developed to be
interoperable and compatible between all provincial and central governmental organizations and
agencies.

3.7.4           E-Government in Provinces
Stages in the evolution of e-Government. In the global e-government reference model of the
United Nations, there are five stages in the evolution of e-Government8:
    1. Emerging: The first stage involves the online presence of a government in the form of an
       official website with or without links to other ministries. Information is not dynamic nor active
       for the citizens
    2. Enhanced: The second stage involves more information provided on the government on
       public policy and governance, with easily accessible links to archived information such as
       documents, reports, laws and regulations.
    3. Interactive: In the third stage, e-Government takes upon a more interactive role with the
       delivery of online services such as tax payment or license renewal application forms that can
       be downloaded. Also, the official website starts to take upon a more interactive portal
       approach with services that offer convenience to the citizens.
    4. Transactional: The fourth stage is crucial in that the government allows two way interactions
       with citizens through transactional services. These transactional services may include tax
       payments, application of identification cards, birth certificates, passports and license
       renewals. Citizens can access these transactional services at any time of the day and all
       these services are solely conducted online.
    5. Connected: The final stage is when the government is a connected body that manages and
       handles the needs of the citizens through an integrated back office infrastructure. This stage
       includes:
       »     Horizontal connections among governmental agencies
       »     Vertical connections between central and local government agencies
       »     Infrastructure connections with interoperability
       »     Connections between government and citizens
       »     Connections among stakeholders such as between the government, private sector,
             academic institutions, etc.



8
 United Nations, “e-Government Survey 2008 – From e-Governance to Connected Governance�, New York,
2008.

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Vietnam’s situation. Stage 1 of the e-Government evolution has been completed by most of the
provinces. The services offered include:
       »     Presence of a provincial website or portal
       »     Provincial map included in the website
       »     Contact information for the relevant authorities
However, the provincial websites are usually very basic websites with minimal information about
the government and its departments. These websites usually offer data that is outdated and many
times are abandoned after initial enthusiasm dies down.
Figure 10 shows the different stages of e-Government reference model:




                     Figure 10 - Five stages of the United Nations Global e-Government Reference Model – UN, 2005


Few provinces have reached the second stage (“Enhanced�). The services that these provinces
provide that comply with the requirements of an e-Government system in the second (“Enhanced�)
stage include:
       »     Information on actual infrastructure
       »     Information on project planning
       »     Statistics on the province’s site, weather and human resources
       »     Investment policy to attach information for foreign affairs
       »     Information on industrial zones/industrial concentration
       »     Statistics on existing investors
       »     Business/economic information of districts within provinces
       »     Information on specialized provinces endowment/capacity
       »     Reports on provincial economic achievements


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       »     Information on obtaining VAT receipts
Those that have, provide documentation on decrees and decisions passed by the government. The
documents provided are in no way exhaustive and only represent a small percentage of hardcopy
documentation.
In most of the provincial ICT Master plans, the provinces have proposed initiatives to reach the
third stage (“Interactive�), with planned applications for registration/incentives, and land usage.
However there is still a clear lack of e-Government awareness among the citizens. Many fail to
realize the existence of information available on official governmental websites.
Higher priority has been placed in the next 5 years for the development of provincial ICT services
for administrative reform so as to be able to support business reform (provision of public services).
Also, priority will be placed on ICT governance in the state agencies. Focus will also be placed on
ICT awareness and the development of a foundation of the ICT industry. The main obstacles for
non-users were found to be economic affordability, infrastructure availability, educational and
psychological reluctance.
All steps in the evolution of e-Government should support the creation of an efficient, transparent
and responsive government as show below, in figure 11:



                                                          Create efficient, transparent,
                                                            responsive Government




    Publish: provide valuable                               Interact: engage society to    Contract: offer cost effective
       online information                                      improve Government              online information



                       Figure 11 - Actions towards the improvement of Government as services provider – WB, 2005



3.7.5           Human Capacity & Resources in Provinces
Derived from other experiences in developing countries as well as from Vietnam’s situation we
bring forward the following concerns related to human capacity and resources:
       »     Educational system. There is a need to promote the knowledge on ICT systems in the
             educational system. The roll out of infrastructure to connect the schools and colleges to the
             Internet will be an enabler to guarantee that in the future, the citizens of Vietnam will be
             familiarized with any environment involving computers and the Internet, and improving their
             possibilities of accessing to more qualified jobs. This would finally result in an improvement
             of the efficiency and productivity derived from the ability of the people in Vietnam to
             compete in global markets.



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       »     Service companies. There is a need to improve the use of ICT systems in service
             companies. Vietnam is quite prepared to access an improvement of its productivity through
             the extension of the use of its existent infrastructures in services such as healthcare. To
             address this need, several specific training sessions could be directed to workers on
             different areas. These training sessions could be deployed as part of bigger programs of
             infrastructure rollout, as the experience has shown in other developing countries.
       »     Project management. There is a lack of capability for project conceptualization and
             design. This is an important issue that needs to be addressed as without an accurate
             conceptualization, proper planification cannot be carried out and may lead poor
             management of time and resources. This is especially important in Vietnam where
             responsibilities are constantly delegated and integrated at a central and provincial level.




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4               International Good Practices for Public Investment in
                ICT

4.1             Summary
Global figures reflect a deeper penetration of ICT infrastructure, services and applications in both
developed and developing countries. The types and sources of financing mechanisms are
changing rapidly. Public and donor financing have declined due to the assumption that the private
sector was going to play an increasingly bigger role in the provision of services extended.
Currently donor financing is playing a relatively small and there is a shift towards new financing
mechanisms such as Public Private Partnerships and international multi donor initiatives.
Aside from the shift of investments towards new technologies, private players are increasingly
investing quantities of money in the deployment of ICT infrastructure, services and applications.
The main drivers for this trend are the roll out of mobile networks and the privatization of public
telecommunication operators.
In this context, it is evident that a good framework for investment in ICT infrastructures and
services should employ regulatory reforms for the promotion of a level playing field. Universal
Access and Service Funds should also be employed to enhance and target investments in priority
areas. Fiscal measures should be developed and designed to reduce risks, initiatives for demand
support and capacity building should be deployed and incentives should be given to enhance
transnational investments.
The rationale for PPPs occurs from the fact that governments cannot sustain existing infrastructure
and cannot afford to build new infrastructure with public capital and are additionally often unable to
raise taxes for this very purpose. The disadvantage is that many PPPs are monopolistic
opportunities that must be carefully managed and regulated to prevent abuse and to secure the
good for the public.
PPPs have been used across developed countries where the role of the private sector is well
established and where there exist laws that protect customers and ensure a level playing field for
competition to take place. The problem in many developing countries is that the private sector is
not as well established and the capacity of government to develop and manage PPPs is much
more limited.
The relevance of PPPs in such countries involves the transfer of skills and financial resources.
Adequate safeguards need to be put in place to make sure that local companies as well as foreign
investors benefit this partnership. In doing so, the country ensures not only that some of the profits
remain in country but also that some of the managerial and technical expertise is transferred to the
benefit of the host.
The menu of PPP structuring techniques is broad and ranges from Service Contract to Divestiture
including Management Contract, Lease, BOO and BOOT, and Concession. These techniques
depend on the risk, rewards, duration of the project, nature of contract performance and what the
contractor receives. Depending on those characteristics, the selection of one kind or another
technique will be a critical subject in the future partnership.
Many relevant examples of PPPs can be found in Annex E-H.


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Another different schema for cooperation and financing is the Multi-Stakeholder Partnership
(MSP), which brings together stakeholders from different sectors, such as the public sector,
businesses, civil society and international organizations. The inclusion of civil servants with NGOs
to deal with development issues and the digital divide brings new voices and perspectives to the
debate and policy-making arena. This will also improve the sense of ownership and involvement of
these organizations during the implementation process.
The government, together with MSPs, the private sector, international organizations and civil
society are dependent on each other for the successful implementation of partnerships and
projects. From a government perspective, the multiple demands for public resources have
increased its reliance on the available financial resources, expertise and business administrative
capabilities in order to extend the networks and provide advanced services to rural and
underserved urban areas. The inclusion of civil servants in national e-strategy initiatives ensures
the legitimacy of the projects and provides a true representation of the policy-making process.
Businesses require governments to provide an enabling regulatory environment, in which
principles of transparency, non-discrimination and neutrality are put clearly into practice. For small
businesses and grass-root projects developed by civil servants, the government’s commitment and
international organizations for participation in partnerships act as a de facto endorsement of their
programs.
The main challenges for MSP are to successfully ensure financial support, which can be carried
out through many different ways (cross-subsidization, pre-payment, universal service funds, least-
cost subsidies, digital solidarity funds), establishing partnerships and which are usually the most
difficult to achieve a temporal sustainability of the program. Some examples of Multi-Stakeholder
Partnerships can be analyzed in Annex I.
These examples show the economic cooperation that is required to regulate partnerships as such
is dependent on each country’s legislation and regulation. The role of one from a developed
country occurs along the phase of deployment and gradually subsides. Given this, the diffusion of
knowledge is very important for the developing country in order to sustain the whole process. In
this way, human resources play a very important role in PPP and MSP as the ability to identify a
partner adequate for the project is critical for future success.
Another critical issue is related to the technology used. Technology should always be a solution to
a problem or service to be provided and not on the other way round. Improving the technology will
not improve the service if it is not necessary. The main focus should be directed at service
functionality.
PPPs in developing countries can also play a huge part as drivers or enablers for the demand in
ICT access and services. The extension of ICT infrastructure to existent industries and services
has proven to improve sector productivity and human resource capacity. It has also been proven
that the importance of extending ICT infrastructure to existent industries and services improves the
productivity of the sectors.
Certain guidelines that are commonly accepted regarding international cooperation include the
involvement of target groups in project design and monitoring. These guidelines consider the use
of existing technologies that the beneficiaries are accustomed to and attention is paid to the
financial sustainability of the projects.
Finally, all projects that focus on ICT trainings should reflect market demand, providing the
required skills in response to the needs of the local job market.



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4.2             Recent investment trends ICT development
Over the last 10-15 years, the worldwide ICT sector has experienced a period of unprecedented
growth at almost every level, from mobile telephony to broadband Internet, e-commerce, e-
government, tele-education and medicine, etc. This applies to both the richer and poorer countries,
in Africa, Asia, Europe, and Latin America. This expansion has been supported by a massive
rollout of ICI (Information and Communications Infrastructures) throughout the countries. It is now a
fact that developing countries are catching up with the OECD world in terms of access, with far
higher growth rates in some services such as access to mobile telephone services.
Recent statistics suggest that the digital divide is rapidly closing, at least with regards of basic
telecom infrastructure access. An increasing number of people have access to basic
telecommunication services and adopt this new technology at a much faster rate than the previous
adoption of new technologies.
With regards to access to more advanced ICT services, there is considerable growth but with
significant gaps. The number of internet users in Vietnam has grown much more quickly than the
growth rates experienced in societies that are more developed. Nevertheless, the data shows a
wider gap where broadband access is involved, as well as for the usage of computers in
households and education9.
It should be noted that greater gaps in advanced ICT access are reflected in broader measures of
ICT investment. While total ICT expenditure as a percentage of the GDP has been growing rapidly
in developing countries, the numbers are still lower than that of the more developed countries. At
the same time, the sources and types of financing mechanisms available for ICT development in
both infrastructure and services have shifted radically.


Public Financing and Donor Financing
Financing for ICT infrastructure traditionally came from governmental budgets and state revenues,
or from donor and international financial institution programs that support major infrastructure
investments.
A 2005 report from the OECD’s Development Assistance Committee (DAC) shows that official
government-to-government aid commitments amongst its 22 DAC members for ICT infrastructure
declined rapidly from US$1.2 billion in 1990 to US$194 million in 2002. The rationale for the
withdrawal of ICI financing from most donors was the assumption that the private sector would play
an increasingly strong role in the provision of services.
In this way, financing by the direct donor community currently plays a relatively small role in ICT
infrastructure development except for specific IDAs such as the World Bank, in some categories
such as Output-Based Aid (OBA) finance.
The decline in direct donor assistance to ICI is however only part of the picture for the role of a
donor agency. Many donors, while still engaged in bilateral ICT-specific programs, are now
participating in PPPs and international multi-donor initiatives for ICTs, while also integrating ICT
components into development programs for other sectors.




9
 Financing Information and Communication Infrastructure Needs in the Developing World: Public and
Private Roles; The World Bank

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When the additional role of non-government organizations (NGO’s) and other private sector
organizations, including technology investment trusts, philanthropic agencies, corporate social
responsibility (CSR) programs, and community groups are considered, the spread of activities in
the ICT realm seems to be very extensive. Except for certain exceptions, the role of these
organizations generally is more related to applications, ICT human resource training and capacity
building rather than to infrastructure and service development. Donor strategies have traditionally
been focused at the governmental level, dealing mainly with policy and regulatory support and with
almost complete reliance on private capital for infrastructure and service development.


PPI (Private Participation in Infrastructure)
In addition to the shift of investments towards new technologies, the source of investment for ICT
development and ICI has also changed significantly over the past decade, with an increasingly
clear trend of investment coming from private players –such as telecom service providers and
network operators. The information contained in the Private Participation in Infrastructure (PPI)
database10 suggests that investments in infrastructure projects with private participation totaled
US$210 billion 1992-2002.
The two main drivers for this increased participation are11:
     1. The roll-out of mobile networks – for example, only between 1990 and 2000, over 350 private
        operators began providing mobile services in more than 100 developing countries. By 2003,
        among all 164 countries with available data, 130 had three or more competing digital mobile
        operators
     2. The privatization of PTOs (Public Telecommunication Operators) - between 1988 and 2001,
        76 developing countries privatized their PTOs, raising over US$70 billion. About two thirds of
        this investment has come from outside the home country of the privatized PTO and, in most
        cases, through the sale of a minority share of the PTO to a foreign strategic partner
It is clear that PPI investments depend heavily on the regulatory climate, with government and
donor activities playing an enabling role. However, since the market cannot achieve everything
policymakers desire without additional inputs, a number of complementary activities now work
together to bring about effective investment in ICT services and successful take-up beyond the
urban markets. In a 2004 report of the World Summit on the Information Society (WSIS), in the
context of infrastructure development and improved access to ICT services, it was noted that
national governments and other stakeholders now have “many tools and opportunities available to
them to enhance the attractiveness of their ICT markets for investors and financiers.�12
Figure 12 shows the differences in financing between Public Sector and Private Sector, and their
respective evolutions in time. Those differences and evolution will be one of the drivers in the
apparition of PPPs.




10
   The PPI database is a database that captures outside private investments in telecommunications projects
in developing countries; it is available online at http://ppi.worldbank.org/
11
   Financing Information and Communication Infrastructure Needs in the Developing World: Public and
Private Roles, World Bank Report, February 2005
12
  Financing ICTD, report of the Task Force on Financing mechanisms for ICTD in Development: A review of
the trends and an analysis of gaps and promising practices, WSIS, December 2004

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                      Figure 12 - Financing structure evolution in Public and Private Sector – Deloitte Research, 2006




4.3             A current commonly accepted framework for ICT investment
These trends and changes in the mix of key tools and mechanisms for investing in and enhancing
ICT markets have crystallized in what we could consider a commonly accepted framework for
investment in ICT infrastructures and services. This framework can be summarized by the
following set of guidelines:
    a) Employ regulatory reform for promotion of a level playing field, open access and fair
       competition for ICT investments and service provision; develop policies that entice new
       entrepreneurial investment in under-served areas;
    b) Employ Universal Access and Service Funds (UASFs) and other public finance mechanisms
       such as loan guarantees and public private partnerships (PPPs) to enhance and target
       investments into priority areas in need of special finance;
    c) Design and deploy initiatives for demand support and capacity building – initiatives in e-
       governance, education and training, budget allocations within the public sector for ICT
       networking and service applications, as well as government pre-purchase of capacity
       through open tenders (i.e., the government commits to a medium-term contract with one or
       more providers to purchase capacity in bulk and hence becomes an anchor tenant, which
       lowers the risk to the private operator in building the infrastructure). Another measure of
       demand support and capacity building is open procurement plans that leverage ICT industry
       competition and private sector development; and
    d) Incentivize and enhance trans-national investments – support and promotion of domestic,
        regional and other South-South investments (e.g., mobile communications, software and
        systems emanating from emerging markets), and increase sub-regional and regional
        cooperation to address infrastructure and last mile gaps.




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4.4             PPPs for ICT and e-Government financing
4.4.1           Rationale for PPPs
A public private partnership is a legally-binding contract between government and business for the
provision of assets and the delivery of services that allocates responsibilities and business risks
among the various partners. In a P3 arrangement, government remains actively involved
throughout the project’s life cycle. The private sector is responsible for the more commercial
functions such as project design, construction, finance and operations.
The view that the private sector can bring significant benefits to the delivery of public services has
become prevalent in many countries. Now more than ever, governments cannot sustain existing
infrastructure and cannot afford to build new infrastructure with constrained public capital. In an
interdependent global economy in which raising fiscal expenditure has a major effect on a
country’s macroeconomic performance and competitiveness, governments are often unable to
raise taxes for this purpose. PPPs are increasingly seen as one way of meeting the need for
improved public infrastructure and services at limited immediate cost to the public exchequer.
Moreover, many governments realize that it is often important to establish user charges for public
services to ration their use. An example of this is the use of road infrastructure. Consumers are
usually willing to pay to use roads which, by virtue of the charges made for use, reduce demand
and congestion. The revenues raised also are a benefit – in terms of the financial value that is
thereby associated with the delivery of public infrastructure and services. The appeal to the
government of selling or otherwise leasing and making these resources available to the private
sector under a PPP type of arrangement thus becomes increasingly attractive. Naturally, the
private sector recognizes the profit opportunities that PPPs provide.
The downside is that many PPPs are monopolistic opportunities that must be carefully managed
and regulated to prevent abuse and to secure the public good.
Involving the private sector has several other advantages. Among many others, we can mention:
      •     Whole life costing13;
      •     Innovation / different management skills;
      •     Risk transfer;
      •     Design, build, operate synergies; and
      •     Unlocking alternative uses.
This requires:
       »     Private sector management skills as well as finance; and
       »     Innovation in delivery and commercial freedoms to deliver efficiencies.
In turn, the keys to success of PPPs are:
       »     Robust contract structure;
       »     Appropriate risk transfer and incentives;


13
  This is a method of evaluating or comparing building materials and components by looking at installation
costs, lifespan, running and maintenance costs. It gives an estimate of the true cost of a service or asset.

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        »    Equitable termination provisions; and
        »    Output rather than input driven.
Well designed contracts for PPP projects focus therefore on defining outcomes and service related
outputs and not on measuring inputs. For example, the outcome of a PPP project will be measured
in terms of services delivered not assets provided, for example, delivering public transport to a
defined service standard rather than a given number of buses for public transportation.
According to the Canadian Council for Public Private Partnership, the number of PPPs for
infrastructure projects is increasingly dramatically in Europe, Asia and Australia. The United
Kingdom has a successful record for delivering PPPs for over 17 years, whilst Australia has done
so for over 10 years. In the United Kingdom alone, more than 620 Private Finance Initiatives (PFI)
contracts with a value of €60 billion have been signed and over 450 projects are operational14.
In the United Kingdom, the “Blair government adopted the Private Finance Initiative (PFI) as a way
of getting the private sector contractors to pay for the construction costs and then rent the finished
project back to the public sector. This allows the government to get new hospitals, schools and
prisons without raising taxes. The contractor, for its part, is allowed to keep any cash left over from
the design and construction process, in addition to the 'rent' money�15.
PPPs are also being considered for smaller scale infrastructure and service delivery. In India,
PPPs have proven to be a successful delivery mechanism for providing a variety of public services
at the local and community level, including at the village level. “In several Indian projects, software
development, training, data entry and manual archives and maintenance have been outsourced to
the private sector16�. Bhatnagar also reports that private companies have also been used to
“develop an e-government application as a product�17.
In some cases, these services may be associated with the establishment and commercial
operation of a community based or public access facility offering a range of public as well as
private telecommunications based services. In this case, the value is in delivering e-government
throughout the country using a PPP approach.
Many examples of PPPs can be found in developed countries where the role of the private sector
is well established and where there exist laws that protect consumers and ensure a level playing
field so that competition takes place. However, this is in contrast to many developing and
transitional countries where the private sector is not as well established and the capacity of
government to develop and manage such PPP deals.
As a starting point in many such countries, there is a need to clearly explain to the population the
advantages of PPPs as well as the pitfalls. There may also be a need to encourage domestic
private sector operators to partner with foreign investors. This is to attain a transfer of skills and
infuse financial resources to ensure that a PPP can succeed. In this regard, a PPP is like any other
foreign investment, and adequate safeguards need to be put in place to make sure that local
companies as well as foreign investors benefit from a PPP deal. By doing so, the country ensures




14
     Canadian Council for Public-Private Partnerships. 2005. Responsible PPP procurement for British Columbia. 18 pp.
15
     BBC. 2003. What are public private partnerships? http://news.bbc.co.uk/1/hi/uk/1518523.stm
16
  Bhatnagar, S. 2004. E-government. From vision to implementation. A practical guide with case studies. Sage
Publications. New Delhi. 202 pp.
17
     Ibid.


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not only that some of the profits remain in country but also that some of the managerial and
technical expertise is transferred to the benefit of the host country.
Figures 13 and 14 will show the different stages in PPPs in different countries as well as their
implications and usual activities derived from them.




                         Figure 13 - Classification of PPP's activity in developed countries - Deloitte Research, 2006




                          Figure 14 - Activities in the different stages of PPP's evolution – Deloitte Research, 2006




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4.4.2           Key issues and considerations
From the accumulated worldwide experience in the use of PPPs for financing infrastructure
development (including ICT and e-Government) we can enumerate a set of key issues and
considerations:
      a) Public private partnerships (PPP) are being used increasingly to fund projects across the
         world, in part because of the increased demand for public services outstrips the ability of
         government to provide these services. This principle applies in both industrialized and
         developing country economies.
      b) PPP projects also have the advantage that they leverage expertise from the private sector
         and can greatly contribute to enhanced delivery of public services under conditions where
         these services would otherwise not be offered.
      c) In industrialized countries, the projects funded are invariably large infrastructure projects
         that are made possible by the infusion of private funds through instruments such as private
         funding initiatives (PFIs) or equivalent instruments.
      d) In India, PPPs are also used for much smaller capital investments that operate at the local
         and community level, which appears to rarely be the case in industrialized countries.
      e) The basic principles that apply to PPPs in infrastructure in general also apply to PPPs for
         delivering ICT and e-government services.
      f)    Both parties to a PPP have to clearly understand the contractual terms and agree to share
            the risks as well as the rewards.
      g) There is a heightened risk of failure for ICT projects in general. Also internationally, there
         are fewer PPPs in the ICT area, including the delivery of public services through e-
         government. However, there are still some success stories and best practices to consider in
         this area.
      h) A corollary of this is that historically there have been fewer PPPs in e-government, although
         this is also partly due to the fact that e-government is a relatively new practice.
      i)    In the delivery of ICT based services, there are risks that are specific to the ICT
            environment that need to be taken into consideration. These include issues related to
            information and data security and use as well as issues related to the complexity of
            implementing software projects involving the development of new applications and the
            engagement of several government entities, often in untested environments.
      j)    It is likely therefore that projects involving a substantial investment in ICT systems and
            applications, especially ones that involve many public institutions, are much riskier for some
            of the reasons mentioned above unless they have been demonstrated and put into place in
            other jurisdictions, in which case there is the possibility of transferring the technology
            directly.
      k) Also, ICT based projects that have a limited interface to existing systems and that can
         operate virtually independently without recourse to costly and complex development work
         to ensure compatibility between systems will have a greater chance of succeeding. As a
         result, highly complex and integrated applications and ICT development projects may best
         be avoided at this stage under more experience in managing the complexity involved has
         been achieved.



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      l)    Applications such as those that operate at the local and community level, where there are
            many competent and well established private sector operators such as some of the banks
            and telecommunications operators, etc. are more likely to succeed.
      The menu of PPP structuring techniques is broad, but the experience accumulated over the
      last decade recommends that the following subset is used, as indicated in Figure 15.

                                          Passive Private            Joint Ventures          Passive public     Privatization
                                            Investment               Co-ownership             Investments
                                           (Govt Bonds)             Co-responsibility            Equity,
                                                                                            Debt guarantees
                                                                                                 Grants


                      Fully                                                                                                        Fully
                      Public                                                                                                      Private
                      Sector                                                                                                      Sector

                                                          Service                  Build Operate          Agreeing
                                                          Contracts                 and Invest           Frameworks,
                                                          Operate,                     BOT                Regulatory
                                                          Maintain                  concession             Dialogue
                                                           Lease                                          Covenants




                                                                      Investment Responsibility
                    Public                                                                                                      Private

                                                                                                                                Enabler &
                    Provider                                                                                                    Regulator
                                                                           Government Role


                                     Figure 15 - PPP options for ICT and e-Government financing – WB, 2008


      Different options can be plotted in a chart –Figure 16- that shows the potential rewards against
      the risk provided by each option.




                                                      Figure 16 - Menu of PPP structuring techniques




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      Table 1 summarizes some key rules for applicability of specific PPP models to ICT and e-
      Government financing.




                                                       Table 1 - Menu of PPP structuring techniques



4.4.3           Benefits of PPPs in ICT and e-Government
In the particular case of financing ICT and e-Government initiatives, PPPs can bring the following
benefits:
      a) Increased expansion of ICT & e-Government networks and services due to new, additional
         private sector financing & investments
      b) More budget available for other government actions: by contracting with the private sector
         to undertake a cost-recovering ICT or e-Government project, scarce Government capital
         budgets can be directed to other, maybe higher priority, social services (education, health
         care, environment, etc.)
      c) Technology transfer: Access to new, innovative technologies and experienced
         management not currently available through the public monopoly, in the design and
         delivery of ICT networks e-Government services
      d) Increased quantity and quality of public services delivery through ICT applications & e-
         Government techniques and increased consumer satisfaction
      e) Improved Efficiency & Service: Higher quality of services & lower per unit costs. Better
         “Value for the Public’s Money� (this is a combination of both lower prices and/or lower risk
         to the Government over the entire life of the ICT or e-Government project)
      f)    Increased public control over the delivery of public services: Management decisions are
            guided by legally enforceable contracts & clear, technical performance indicators – rather


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            than by politics.
In addition to these, PPPs may introduce a positive side-effect (although this is, per-se, never a
sufficient reason to undertake a PPP transaction, since PPPs can easily be more expensive and
offer less quality than traditional public sector provision): increasing the size of the private sector
(and the taxes they pay).


4.5             MSPs for ICT and e-Government financing
4.5.1           Rationale for MSPs
Partnerships can be conceptualized as alliances of different stakeholders created as means to an
end that would otherwise be difficult to accomplish based only on the capabilities and resources of
a single entity or stakeholder category. Although there is no unanimously accepted definition of
multi-stakeholder partnerships (MSPs), existing definitions emphasize those characteristics that
tend to make these partnerships successful in the long term. According to these definitions, well-
structured partnerships bring together stakeholders from the different sectors, such as the public
sector, businesses, civil society and international organizations, in a manner such that the different
partners:
       »     Collaborate towards the achievement of a well-defined common goal or project;
       »     Fulfill a specific role or responsibility; that is, its core competencies match a specific need
             not already covered by other partners;
       »     Complement each others’ capabilities and resources (human and capital), making the
             partnership stronger through the sum of its parts;
       »     Share equally the risks, costs and benefits of the partnership and of implementing the
             project;
       »     Are able to reach consensus, deal with discrepancies and have available mechanisms for
             dispute resolution.
The processes of liberalization and privatization of the telecommunication sector around the world,
together with the introduction of new technologies, brought new players into an arena traditionally
restricted to governments and international organizations. Until the early 1980s, in most countries,
government entities were, for the most part, exclusively in charge of planning and implementing
telecommunication policies involving network expansion, the promotion of universal service goals
and the introduction of advanced information and communication technologies (ICTs) and services.
In the last two decades, private sector service providers have been gradually increasing their
participation in the telecommunications market, focusing initially on privatization opportunities and
more recently on the introduction of wireless communications, Internet and other advanced
services. Together with national governments, the private sector has become the key player for
network expansion, for the introduction of new technologies and services and, in many countries,
private companies also share the burden of financing universal access programs.
International initiatives, such as the World Summit on Sustainable Development or the Millennium
Declaration, adopted by leaders of 147 Member States of the United Nations in September 2000,
have also contributed towards a more expansive view of partnerships, in which the participation of
multiple stakeholders, particularly from civil society and non-governmental organizations (NGOs),
is seen as essential to achieving sustainable development.


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The inclusion of members of civil society and NGOs dealing with development issues and the
digital divide brings new voices and perspectives to the debate and policy-making arena. Taking
into consideration the concerns and expectations of those who represent the general population is
expected to increase the legitimacy of the policies and strategies resulting from the consultation. It
can also improve the sense of ownership and involvement of these organizations during the
implementation process.

4.5.2           Stakeholders in a MSP
Multi-stakeholder partnerships can involve several of the following main stakeholder groups:
       »     Public sector - composed of central ministries, telecommunication regulatory entities,
             parliaments, sector line ministries, ministries of Finance, as well as regional and local
             governments and in some countries state-owned or city-owned network operators. The
             public sector plays a major role in establishing national policies and e-strategies aimed at
             bridging the digital divide. Historically, governments have been linked to the development
             of fixed-line telecommunication networks, and as such, still retain some level of ownership
             in incumbent providers of basic telephone services in many countries.
       »     Private sector - composed of firms and private sector associations. The business sector is
             increasingly seen as the major force in the deployment of advanced ICT networks,
             technological development and the provision of telecommunication services, content and
             applications.
       »     Civil society and Non-Governmental Organizations (NGOs) - a broad sector which is
             usually conceived as an intermediary between the State and the general population, giving
             voice to the diverse interests and demands of a host of communities and theme-oriented
             organizations before the State and, increasingly, before international organizations. In
             contrast to civil society, NGOs are usually more structured entities with legal status and
             official recognition, such as youth, women, disabled, and indigenous organizations, among
             others. Entities grouped under civil society include trade unions, the media, academia and
             educational entities, cities and local authorities, the science and technology community,
             faith-based groups, social movements, parliamentarians and individuals.
       »     International and regional organizations and financial institutions - These multi-lateral
             organizations facilitate the coordination of national policies and standards to facilitate
             homologation, promote the exchange of experiences and knowledge and provide
             resources and expertise for sustainable development programs.

4.5.3           Interests of the stakeholders
Partnerships are established under the expectation that the different stakeholders will receive
mutual benefits as a result of investing their competencies and human or financial resources, and
sharing risks for the general benefit of the multi-stakeholder relationship. These benefits may be
connected directly to the expected outcomes of the MSP project or to intended consequences of
the stakeholder’s participation in the partnership. It is important for the long-term sustainability of
the partnership that all its members develop a sense of ownership in the project, through either
financial or in-kind contributions, to strengthen their commitment.
Governments, the private sector, international organizations and civil society depend on each other
for the successful implementation of their partnerships and projects. A description of roles can be
seen in Figure 17:

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       »     From the government perspective, for instance, the multiple demands on public resources
             have increased its reliance on the financial resources, expertise and administrative
             capabilities of businesses and corporations to extend the network and provide advanced
             services to rural and underserved urban areas; their participation as member states in
             international organizations allows them to collaborate with other countries and
             organizations in the pursuit of common goals. Finally, the inclusion of civil society in
             national e-strategies initiatives ensures the legitimacy of the projects and that the policy-
             making process is truly representative.
       »     Similarly, businesses require governments to provide an enabling regulatory environment,
             in which principles of transparency, non-discrimination and neutrality are put into practice
             clearly. Transparency and clear rules reduce the risk of regulatory capture and promote
             investment in the ICT sector. Local and national governments can also benefit businesses
             and communities by stimulating demand and attracting the supply of ICT services in rural
             areas when acting as an anchor tenant in broadband initiatives. In the United States, these
             types of project are being used increasingly by municipal governments to promote the
             deployment of advanced services in their areas.
       »     For small businesses and grass-root projects developed by civil society the commitment of
             government entities and international organizations to participate in partnerships acts as a
             de facto endorsement of their programs, and empower them in their search for alternative
             sources of funding to facilitate long-term sustainability. These endorsements also
             encourage the participation of the private sector.




                           Figure 17 - Roles of the different agents in an Multi Stakeholder Partnership – ITU, 2005




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4.5.4           Challenges for MSPs
While it is relatively easy to establish MSPs, and to issue press releases and build websites and
the like, it can be harder to keep them going and to ensure that all partners keep their promises.
The key word is “sustainability�. We address some of the challenges faced by MSPs and their
success in overcoming barriers and establishing sustainable models of operation.

4.5.4.1 Ensuring financial support
Probably the biggest initial barrier to the success of an MSP, as well as the greatest long-term
challenge, is to secure financial support. In the long-term, perhaps the only sustainable business
model is one in which users pay for the services they receive and the amount they pay covers the
cost of providing the service. This is the market model and it is the basis for virtually all
telecommunication operations worldwide. But the kinds of investments covered by MSPs usually
are those at the margin, where either a particular community or category of customer would not
normally attract sufficient infrastructure investment by an operator, or they may not be able to
afford to pay. In other words, the projects described here apply primarily in areas of market failure.
A further element to this is that, although private investment, including foreign direct investment, in
telecommunications has boomed during the 1990s—a period which coincided with many
privatizations of incumbent network operators, as well as the licensing of mobile operators—this
“investment now� boom seems to have slowed down. For private investment in
telecommunications in developing countries the volume fell to less than US$ 2billion in 2002,
compared with a peak of US$ 70 bn in 1998, while for bilateral ODA (overseas development
assistance) for ICTs, investment fell from a peak of US$1.4Bn in 1992 to US$200m in 2002. It is
too early to tell whether this marks a definitive shift, or just a temporary blip.
Typically, there have been a number of different responses to market failure and strategies for
reaching the “unphoned� in the telecommunications sector:
       »     Historically, a cross-subsidization of prices between more profitable long-distance and
             international services to loss-making local services helped keep the cost of ownership
             (installation and subscription charges, as well as local call charges) down to a minimum.
             However, as shown by ITU research, this usually resulted in long waiting lists, because the
             rich few that had access to the service were not paying sufficient to cover the costs of
             service they received, which meant that there was little investment in new capacity for the
             rest of the population.
       »     As competition in the fixed-line network became more prevalent, operators were
             increasingly obliged to move to cost-oriented pricing, and regulators began to favor
             targeted price discounts for specific groups within society. Examples include 150 units of
             call charge for blind subscribers in Greece, or special schemes for low consumption users
             in Italy. Other variations on this include the “lifeline� services, which are never
             disconnected, even if the subscriber is unable to pay.
       »     As mobile phones become more popular, so pre-paid cards have become the accepted
             way of providing service to low volume users. Indeed, in parts of Africa and other
             developing regions, more than 90% of mobile phone users are on pre-paid schemes.
             Although pre-payments can often turn out more expensive than a subscription, they are
             popular for users with low or unpredictable incomes, because they allow expenditure to be
             controlled. Pre-paid cards also lend themselves to direct subsidy schemes. For instance, in
             the United Kingdom, job seekers were given pre-paid cards under a pilot scheme to help

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             them to find work. The pre-paid concept can also be used for fixed-line telephones, as is
             the case, for instance, in the Philippines.
       »     During the 1990s, an idea much in vogue was the creation of telecenters, or public centers
             providing access to a wide range of ICTs. Although there are many variations (e.g.,
             telecottages, multi-purpose telecenters, digital community centers, etc.), the basic principle
             is the same; namely to provide funding for a certain period, and thereafter to let them
             become self-sustaining. The relatively high failure rate of telecenters, and their perceived
             high cost, has meant that they have sometimes been overshadowed as a policy tool by
             entrepreneur-driven initiatives.
       »     The liberalization of payphone markets is a relatively simple, cost-free step that
             governments can take, which often has a dramatic impact on extending access and
             creating employment. Probably the two most cited examples in the literature of how this
             can work are the examples of private teleshops in Senegal and village phones in
             Bangladesh. In Senegal, more than 2.000 privately-owned telecenters had been created
             within a few years of liberalization of this market in 1992, providing an estimated 4.080
             jobs. In Bangladesh, the Grameen Telecom’s Village Phone program provided micro-credit
             loans to women in Bangladeshi villages to provide telephone service to their fellow
             villagers. The model has now been successfully exported elsewhere in the world.
       »     Another type of initiative for providing subsidies to marginal social groups or rural
             communities is to use universal service funds. Although there are many different
             variations, these basically involve imposing a tax either on the operators in the market, or
             alternatively on consumers, and contributing this to a fund which can be used to cross-
             subsidize those projects which would not receive funding under the operation of the free
             market. The concept was pioneered in the United States, where it was originally used to
             provide funding for telecommunications in rural communities, and more recently for
             projects such as providing Internet access in public libraries and schools (“e-rate�). Now it
             is used more widely, especially in the Americas.
       »     A further mechanism, particularly popular in Latin America, is that of least-cost subsidies,
             or reverses auctions. The basic concept is that those regions of the country that would not
             otherwise be profitable to serve can be designated by a regulatory agency, which then
             invites bids to serve the order, with the winning bidder being the one that proposes the
             lowest level of subsidy. In Australia, when the incumbent operator, Telstra, was invited to
             designate certain areas for competitive tendering, it chose to continue to serve all areas
             itself, without a subsidy, thereby reducing the universal service obligation. But reverse cost
             auctions have been conducted successfully in a number of other countries, including Chile,
             Peru and the Seychelles.
       »     Perhaps the newest innovation in tackling market failure is the establishment of digital
             solidarity funds. At the global level, the creation of the Digital Solidarity Fund, established
             in Geneva, as an innovative financial mechanism of a voluntary nature open to interested
             stakeholders with the objective of transforming the digital divide into digital opportunities for
             the developing world by focusing mainly on specific and urgent needs at the local level and
             seeking new voluntary sources of “solidarity� finance. The Fund itself was launched in
             Geneva on 14 March 2005 and initial contributions have been received from a number of
             sources, including the cities of Geneva, Lyon and Turin. One of the initial funding
             mechanisms for the fund has been a tax (levied at 1% in the City of Geneva) on public
             sector procurement of ICT networks and services. Another example of a digital solidarity


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             fund at a local level is that established by non-governmental organizations in Hong Kong,
             China, with support from the government of the special autonomous region.
The key to sustainable funding is to move beyond the pilot project stage towards full operation.

4.5.4.2 Establishing partnerships

Choosing to undertake a particular project through a MSP, rather than through the direct actions of
one organization, brings diversity and potentially dynamism to a project, but it also brings
management challenges. The complexity of the management challenge rises with the addition of
each new partner, and especially when adding new categories of stakeholder to the relationship.
By definition, the interests of, say, the private sector, will be different from those of, say, civil
society. But the coming together of different interests, when successfully executed, means that the
whole can be greater than the sum of the parts. Furthermore, because of the creative tension
between different interests, the process of negotiation and information-sharing is often a valuable
part of the overall collaborative experience.
One of the longest-standing partnerships in the ICT field is the Global Knowledge Partnership,
which describes itself as a “worldwide network committed to harnessing the potential of ICTs for
sustainable and equitable development�. It was founded in 1997, with initial funding from the World
Bank and the Government of Canada, and its headquarters are located in Kuala Lumpur, Malaysia.
It now boasts some 100 members in 40 countries. One of the partnership principles is that the
different stakeholders come together as equals. Its main public activities are annual Global
Knowledge Conferences, the most recent of which took place in Egypt in May 2005, as well as an
ICT4D web portal.
But partnerships can go wrong, and sometimes spectacularly so. An example of this was the
partnership set up to manage the Digital Opportunity Initiative, which was established in 2000
following the G8 Okinawa Summit. The partners included an international organization (UNDP), a
private company (Accenture) and a non-governmental organization (Markle Foundation). The
partners contributed considerable sums of money to the partnership, and although it produced a
glossy final report, it did not generate any lasting new projects and by the end, the partners were
barely speaking to each other.
Nevertheless, the spirit of partnership underlying the Digital Opportunity Initiative was carried
forward, notably in the Digital Opportunity Task Force (DOT Force), the UN ICT Task Force and
latterly the World Summit on the Information Society (WSIS).
A further impetus to the concept of multi-stakeholder partnerships has come from the Report of the
Cardoso panel of experts on UN-civil society relations, commissioned by former UN Secretary-
General Kofi Annan, which highlights the value of multi-stakeholder partnerships for tackling both
operational and policy challenges. In their recommendations, they specifically call upon the United
Nations to foster such partnerships. One initiative to take this concept further is the UN Multi-
Stakeholder Partnerships proposal, which proposes the formation of a new “overlay� specialized
UN agency to allow stakeholders and their constituencies to interact efficiently, using web-based
ICTs. A drafting committee has been established under the patronage of the chairman of the first
phase of the PrepCom process, H.E. Adama Samassekou (Senegal). But the requirement for such
a new UN agency is as yet unproven.




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4.5.4.3 Achieving sustainability
Although some projects are intended to have a limited lifespan, in most cases the aim is to go
beyond the pilot project stage and to achieve sustainability. For instance, in the case of
telecenters, over time, subsidies might be removed and user fees used to cover costs. Or to take
another example, in the case of a project to digitize a library archive, after the initial project to
digitize the backlog is complete, new acquisitions should be digitized automatically. However, the
path from pilot project to full implementation is often littered with failures. Similarly, it seems part of
human nature to follow what is new rather than sustain what is old. In some cases, it is actually
preferable to close a project formally once some of the stakeholders have moved on, than to try to
sustain it artificially.
But many partnerships do succeed in achieving sustainability over a long period (like the GKP)
and, indeed, can replicate themselves. Some examples of relatively long-standing multi-
stakeholder projects include the following:
       »     The African Virtual University (www.avu.org) was established in 1997 with original funding
             from the World Bank. It is intended to provide access to high-quality tertiary education
             across the continent of Africa, harnessing the potential of ICTs (e.g., satellite television,
             Internet, videoconferencing etc). Following a proof-of-concept phase in 1997-1999, some
             33 AVU learning centers were established across the continent in 2000-2001 and since
             2002 it has been now operational in 18 countries, with over 3.000 students enrolled. In
             addition to the World Bank, other partners include the Canadian International Development
             Agency (CIDA), the UK Department for International Development, private sector
             organizations (including Microsoft, H-P and Netsat), and overseas partners universities,
             like MIT (USA), Carleton University (Canada) and Royal Melbourne Institute of Technology
             (Australia).
       »     The      Digitization   of    Recordings    of  Traditional   Chinese    Music   project
             (http://portal.unesco.org/ci/en), which has been running since 1997, is aimed at making
             field recordings of Chinese music held by the Music Research Institute (MRI) of the
             Chinese Academy of Arts in Beijing digitally available. Seed funding was made available
             from UNESCO and other partners include the Austrian Research Sound Archives.
       »     The Satellite Global HealthNet network (http://www.healthnet.org/), established in 1991,
             provides a network of some 10.000 members with e-mail access and a library of web-
             based health information. The original technology used was low-earth orbit satellite, but
             this has since moved on to make used of the best connectivity available in the different
             countries where it is established, which include Eritrea, Ethiopia, Kenya, Nepal, Uganda
             and Zimbabwe. HealthNet’s list of partners is impressive, including charitable foundations
             (like the Digital Partners Foundation and the Lewinson Family Fund), individuals (like
             Princess Catherine Aga Khan), private companies (likPalmOne and Skyscape) and
             medical publishers. In addition, HealthNet works with the government health departments
             in the countries in which it is established.
       »     World Links eLearning for Development (www.world-links.org) was established in 1997
             with a mission “to improve educational outcomes, economic opportunities, and global
             understanding for youth through the use of information technology and new approaches to
             learning�. It claims to have provided training to some 1.8 million students and 22.000
             teachers through online teaching methods.



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What are the secrets to long-term sustainability? Key elements in the examples quoted in include
accommodating a broad range of partners and being able to anticipate and adapt to technological
change. Another important element is long-term commitment from the partners, and their ability to
focus on longer-term goals rather than being distracted by the latest passing fads. Among different
donor organizations, the Canadian International Development Research Centre (IDRC) has a
particularly good reputation in sustaining partnerships through to long-term viability. Examples of
IDRC’s successful projects include the Institute of Connectivity of the Americas, BellaNet, the
Acacia Initiative and Pan-Asia Networking. IDRC’s success may, in part, be due to its own
longevity, having been founded in 1970, and the fact that it is involved in the development process
more broadly, not just ICT for Development.


4.6             Atos Consulting Analysis
A variety of examples has been shown in this chapter (and in the related annexes) throughout last
decade which comprise of different work directions in the cooperation between institutions,
enterprises, NGOs, governments and even recognized and committed individuals in certain cases,
to deploy different infrastructures, services and applications in developing countries.
The kind of economic cooperation that regulates the collaboration is quite dependent on the
country’s legislation and regulation, this being quite a relevant paradigm of the presence of the
participation of a developed country during the implementation phase and its absence in the
activity during the maintenance phase. The economic regime of its presence is quite variable and
the common understanding regarding this subject is that the easiness and profit of the
collaboration is derived from the hurdles or absence of them created by the receiving country.
The framework, limited duration of the interventions and focused implementation involve a very
important need of diffusing program knowledge from the institution belonging to the developed
country to the government or partner belonging to the developing country. Isolated actions cannot
be taken and if so, need to be taken in the knowledge generation phase. Being able to identify and
profit from an appropriate partner is absolutely critical and relevant to these actions.
Much discussion is also directed at the kind of technology to be involved in the different
applications, services and infrastructure. There has to be a balance in cost between the technology
deployed to the users and the technology used by the service providers. The project subsidies
have be to carefully planned for project application as well as for activity focus. Will it be a project
that diffuses mobile devices to fishermen or will it be more relevant to build a database that
aggregates certain type of information? Different focuses imply very different kinds of projects and
can directly impact the success of the projects.
It has also been shown that the main focus of the projects should be directed at the functionality of
the services and networks and not necessarily on technological optimization. The lack of vision is
quite commonly attributed to the failure of such interventions. Some other successes are derived
from the extension and deployment of infrastructure and the building up of services and
applications on them. The design of any of these projects should start with a clear definition of the
objectives that need to be addressed and a top down structure with the subsequent design of
actions and networks required.
A relevant fact among infrastructure projects is the role they play in the extension of interest in their
use among customers. They act as triggers of the demand of ICT services. It has been quite




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commonly accepted that one of the most successful ways to extend the penetration and use ICT
technologies and internet is in the diffusion in learning environments.
Some other sectors that can profit from these kinds of projects are the healthcare sector and
mostly in countries with a distributed medical care system, Introducing ICT infrastructure and
applications in that kind of environment can revert faster attention, more accurate detection of
diseases and the sharing of knowledge among professionals. This also implies a structured
formation for medical staff who must understand the uses and benefits of applications and ICT
devices for their work.
Some guidelines appearing in the different projects regarding international cooperation and
development of ICT services and applications in developing countries include:
       »     Involvement of target groups in project design and monitoring.
       »     When choosing the technology for a poverty intervention project, pay attention to
             infrastructure requirements, local availability, training requirements, and technical
             challenges. Simpler technology often produces better results.
       »     ICT projects that reach out to rural areas might contribute more to the Millennium
             Development Goals (MDGs) than projects based in urban areas.
       »     Financial sustainability is a challenge for ICT-for-development initiatives. While many
             projects include mechanisms for cost-recovery, most find it difficult to generate sufficient
             income to become financially self-sustaining.
       »     Projects that focus on ICT training should include a job placement component. Any project
             that provides ICT training must 1) ensure that skills training responds to local job market
             needs, 2) help trainees with job placements, and 3) offer training in pro-active skills for
             finding jobs. Without such components, ICT training may raise false expectations among
             target groups.
Apart from the relevant facts concerning big lines of action, there are certain common guidelines
which can help the facilitation of broadband deployment in developing countries. The key to
success in each case is the creation of an enabling environment. Through this enabling
environment, communities and ultimately countries can achieve the critical mass necessary to
lower costs and achieve all the potential benefits of broadband connectivity:
       »     Adopt Supportive Regulations
       »     Form Public/Private Partnerships
       »     Invest in Intermediate Infrastructure and Technology
       »     Encourage Competitive Ecosystems




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5               Legal, Regulatory and Institutional Framework of ICT
                Infrastructure and Applications in Vietnam

5.1             Summary
This chapter addresses different aspects regarding the general regulatory context concerning ICT
sector in Vietnam and its evolution, as well as specific decrees which define restrictions for the
different proposed inversion schemes. The approach is progressive, showing the reader the
different rulings and institutions which provide the regulatory context in Vietnam and ending with a
review of the restrictions applying to any kind of foreign investment, providing practical guidelines
on foreign investment.
The global regulatory framework in Vietnam has evolved and some important laws and regulations
have been sanctioned to pursue strategic objectives for the country in ICT context. The most
important of the laws the Government has sanctioned is the Telecommunications Ordinance which
defines the global rules of the telecommunications market in the country.
The laws, decrees and decision depend on different areas in the Government, being the most
relevant of them the Department of Telecommunications. Some other laws are provided, amidst
others, by the Department of Radio Frequency, Department of International Cooperation and
Department of IT Industry.
Regarding foreign investment in the country, the entrance of Vietnam in WTO has enhanced all
objectives and modified its legislation. The BTA (Bilateral Trade Agreement) signed by the US in
July 2000 established a plan of the subsequent openness of the country to different services such
as email, voice mail, ISP services, mobile cellular services and fixed line services. The entrance
has boosted foreign investment into Vietnam and has exposed the country to unprecedented
growth. However, poor economic, trade and financial data constrain effective policy making and
raise the cost of doing business in Vietnam.
The pragmatic approach taken by the Government consists in managing the ICT investment as per
source of fund. IT application investment funded by State Budget follow different degrees which
comprise Decrees 52, 12 and 07 for Investment and Construction and Decrees 16, 112, 99, 03 for
work construction investment project management. There is no specific decree for ICT investment.
The projects are classified by the Government into three different groups (A. B, C) which have
different processes.
Investment not funded by State Budget follows, mainly, Decree 121. Under this decree the investor
shall meet different conditions depending on the kind of project. For telecom service projects
without network infrastructure, domestic investment projects must have at least one investor with
minimum equity capital of 30% total investment capital of the project; foreign investment projects
must joint venture in the years 2007-2009 (3 years from the moment Vietnam entered the WTO)
with at least one authorized telecom service provider in Vietnam to provide basic telecom service
or internet access. Minimum rate of equity capital of the Vietnamese authorized provider shall be
49% of the total investment capital.
In the case of investment not funded by State Budget for network infrastructure establishment
projects, the general conditions specify it should be in conformity with telecom development
planning of Vietnam and in compliance with telecom national standards. The special conditions

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indicate that if it is a domestic investor must be state owned or enterprise with state’s governing
equity capital; in the case of a foreign investor must joint venture or affiliate with authorized
domestic investor in Vietnam. Equity rate shall be conformable with WTO commitments in Vietnam.


5.2             Policy and Institutional Framework
5.2.1           Global Regulatory Framework Evolution
The current government sees the importance of greater integration with the world economy and is
taking calculated measures to increase the pace of reform. In an effort to comply with WTO
stipulation for an independent regulator, the Directorate General of Posts and Telecommunication
(DGPT, 1993) was replaced by the Ministry of Posts and Telematics (MPT) in 2002 which has
today been replaced by the Ministry of Information and Communications (MIC). MIC is responsible
for sector liberalization and for guiding the dismantling of VNPT’s monopoly. It was mirrored by the
compilation of the Post & Telecommunication ordinance which also came into force in 2002, the
first professional legal document governing the posts and telecoms sectors issued by Vietnam’s
legislative body. It covers management efficiency, the creation of a fair and legal environment and
the protection of customer interests.
The government’s longstanding desire to keep a close rein on foreign participation has resulted in
complex and lengthy licensing approval procedures. As in China, there have been grey areas
where temporary licenses have been applied to carry out trial runs for new services. Some
analysts view these temporary licenses as legitimizing contracts inconsistent with government
guidelines, particularly those governing FDI restrictions.

5.2.2           Main Laws and Regulations
The main goals for developing the telecommunications sector in Vietnam are defined in the:
       »     Post and Telecommunications Ordinance of 2002
       »     Decision 158/2001/QDTTG of October 18, 2001, approving Vietnam Post and
             Telecommunications development strategy through 2010 and general approach through
             2020
       »     National Institute of Post and Telecommunications Strategy (NIPTS) ICT strategy, adopted
             by MIC in October 2005, which sets goals for telecommunications and ICT for the year
             2010 and 2020.
Strategic objectives under these plans and decisions include to:
       »     Develop a national information infrastructure with advanced technology, high capacity, high
             quality of service and nation-wide service
       »     Build a telecommunications sector that is a leading sector in the economy, with an annual
             growth rate of 20-25%
       »     Reach penetration in “e-Vietnam� (e-commerce, e-government, e-citizen access)
             comparable to the regional ASEAN average by 2010
Specific objectives detailed in the NIPTS plan include:
       »     Reach a penetration of 32-42 total telephone lines per 100 population by 2010


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       »     Reach a penetration of 25-35 Internet users per 100 population by 2010. 30% of
             subscribers should have broadband access
       »     Achieve 10 PCs per 100 population by 2010.
The laws and decrees reflect a slow but ongoing liberalization of the telecommunications sector.
This progress toward liberalization is now being enhanced by three major factors:
      (1) Comparisons by decision-makers with traditional rival China, which is seen as being 5-10
          years ahead in terms of telecommunications and ICT development and inward investment;
      (2) Comparisons with other ASEAN nations, and
      (3) The drive derived of the accession to the World Trade Organization (WTO)
The most important and comprehensive of the above-listed laws and decrees was the
Telecommunications Ordinance (law). This 79-article ordinance continues the telecommunications
reform process in Vietnam, and is expected to encourage further private and foreign interest in the
sector. This new ordinance has many provisions, including:
       »     Enterprises from any economic sector are allowed to provide most telecommunications
             and postal services, except "essential" ones such as construction, development and
             management of the infrastructure such as the "national axis [backbone] network, and
             international, mobile and local phone networks," which will be undertaken by state owned
             enterprises.
       »     Licenses for network establishment and service provision have a maximum duration of 15
             years, telecommunications service provision licenses have a life of 10 years; and licenses
             for telecommunications cables on the continental shelf and in exclusive economic zones
             have a life of 25 years.
       »     Enterprises with a market share of more than 30 percent are prohibited from using their
             market power to hinder new entrants.
Decrees implementing the law have been issued and cover:
       »     Postal administration.
       »     Telecommunications administration.
       »     Spectrum management.
Specific other noteworthy reform measures taken by the government in the last several years
include:
       »     Creating the new MIC in place of DGPT, to set policy in and regulate “telematics�
             (telecommunications plus IT).
       »     Decreeing that post is separate from telecom in 2005, with its actual separation taking
             effect in 2007.
       »     Passing a regulation in 2005 creating the Vietnam Public Utility Telecommunications
             Service Fund. This serves as the Universal Service Obligation (USO) mechanism for the
             country.
       »     Passing a law in 2005 allowing for electronic transactions.




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       »     Reducing prices on international calling, leased lines, Internet access and interconnection
             fees, to the point that MIC and at least one independent analysis states that a market
             basket of prices is about 7% below regional averages.
       »     Signing a Bilateral Trade Agreement (BTA) with the United States in December 2001,
             which covered telecommunications, and which provided time-delineated market opening
             and ownership measures for (US) investors over six years.
       »     Recognizing the principles of “significant market power� and “asymmetric regulation� in
             recent pricing regulations, which allow all service providers with less than 30% market
             power to set their own prices.
       »     Issuing licenses to new operators in the areas of basic services, international, mobile,
             Internet exchange providers (IXPs), Internet service providers (ISPs), and other market
             segments.

5.2.3           Allocation of Responsibilities for Policy Making and Regulation
The laws, decrees and decisions shown in the section above allocate policy responsibilities in the
sector. The key policy and regulatory functions related to telecommunications are formally
assigned to the Ministry of Information and Communications (MIC). Selected divisions of interest
within this important new ministry are shown in the figure 18, in the next page.
The MIC departments of telecommunications and radio frequency shown in the organization chart
provide the regulatory function. There is no discussion at present about creating an independent or
quasi-independent telecommunications regulator. However, MIC has taken the initiative to
modernize some of its consultative procedures, including:
       »     Announcing in December 2003 that it would undertake stakeholder consultations in
             drafting the new IT draft law.
       »     Holding a series of round table seminars with stakeholders, sponsored by the UNDP, with
             the goal of developing a national IT and broadcasting strategy.
Furthermore, the Vietnam-US BTA included by reference the WTO Telecommunications Reference
Paper, and hence required changes in regulatory procedures. The BTA itself specifically required
some changes in regulatory and market procedures, as follows:
       »     Making licensing criteria transparent (although the choosing of local partners in the
             issuance of licenses may be excepted from the transparency requirement).
       »     Allowing public comment regarding the formulation of laws, regulations and administrative
             procedures.
       »     Eliminating discriminatory prices and fees over a 4 year period.
       »     Prohibiting abuse of monopoly power.
While encouraging, these BTA measures alone did not meet WTO accession requirements with
respect to telecommunications requirements. Also, the key areas of interconnection, universal
access and radio frequency management were not addressed in the BTA, except by incorporating
the WTO Telecommunications Reference Paper, which gave very brief (albeit important) guidance.
Figure 18 shows the structure of the different policy and regulatory independent units.




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                                         Figure 18 - Structure of Policy & Regulatory and Independent Units




5.3             Vietnam and World Trade Organization
5.3.1           Relevant facts
WTO Accession (January 2007) Indirectly Stimulated Foreign Investment into Vietnam, Which
Exposed Vietnam to Unexpected Macroeconomic Management Challenges. WTO accession
pushed Vietnam above “due diligence� criteria for institutional investors. Its credibility and
reputation was enhanced and spurred the confidence of Vietnam’s Government to expand
government investment and the fiscal deficit.
       »     Poor Economic, Trade and Financial Data Seriously Constrain Effective Policy Making and
             Raise the Cost of Doing Business in Vietnam. It is strongly recommended that Vietnam
             publish key financial, trade and investment flows data, and that policy makers demand
             research and analysis to be able to make evidence-based policy decisions.
       »     A Detailed Policy Review of Lessons Learned During the First Two Years Following WTO
             Accession Is Needed. It would be very useful to carefully review the lessons learned for
             Vietnamese policy in a post-WTO-accession environment, with the aim of developing
             recommendations for policy responses, institutional strengthening and improved data and
             policy research, all of which can help policy authorities make more effective, pro-active
             decisions in the future.
       »     Foreign Direct Investment (FDI) to Vietnam Surged in 2007 and 2008. Since WTO
             accession, registered FDI doubled from 2007 compared to 2006 and it is expected to triple
             in 2008 compared to 2007.
       »     Registered FDI Projects Have Become Substantially Larger. Whereas the average FDI-
             project size remained relatively small from 2001 to 2006, the average size of a FDI project
             doubled from 2005 to 2007, and then grew by almost five times in the first half of 2008.




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       »     The Composition of Registered FDI Projects Have Shifted Significantly, with a Surge in FDI
             in Oil and Gas, and in Non-Tradable Sectors such as Real Estate Development and
             Hotels/Tourism. Since WTO accession, the proportion of registered FDI in manufactured
             sectors in total FDI has dropped from 65% in 2006 to 24% over the first seven months of
             2008; conversely, the proportion of registered FDI in construction has grown from 15% in
             2006 to 30% over the first seven months of 2008, and for hotels/tourism from 6.4 to 19%,
             respectively. Relatively little FDI has been made in agriculture and fishery sectors, which
             still employ vast numbers of Vietnamese. For many types of infrastructure, policy
             restrictions have held back foreign investment.
       »     Country Sources of FDI into Vietnam Have Evolved. The leading countries contributing FDI
             to Vietnam have shifted somewhat since WTO accession. Taiwan and Japan remain
             among the largest investors over the first seven months of 2008; FDI from Singapore grew
             by 54%, from a relatively high base. Registered FDI from Malaysia, Brunei, Thailand and
             Canada soared over the same period. Registered FDI from China grew more than three-
             fold, but from a low level.

5.3.2           The way towards WTO
As a country in transition, Vietnam has moved cautiously in the process of reforming its model of
state-owned infrastructure. It has as a result been trapped in the classic dilemma face by many
socialist economies: desperately needing new investments in basic infrastructure while trying just
as desperately to avoid private, and especially foreign, ownership of what it perceives as strategic
assets. Early change came in 1988 when Vietnam signed its first “Business Cooperation Contract�
(BCC) with OTC, now part of Telstra, to build satellite earth stations for international traffic. A BCC
is a form of revenue-sharing concession that enables restricted market entry for a fixed period of
time. It does not involve equity ownership, and contractual terms can be variable. Rates of return
are fixed according to a contractual collar, though may be subject to revision depending on market
conditions. Since that initial contract, Vietnam has negotiated 10 BCCs that have brought in over
$1B of investment on basic fixed and mobile services infrastructure.
Some of the BCC have been subject to renegotiations to reduce the foreign partner’s commercial
risks. Revision of revenue sharing arrangements has been allowed if return on investment fell
below target due to deteriorating market conditions. For example, Korea Telecom sought and
obtained a revised revenue share when the value of the dong fell 20% in 1997, precipitating a fall
in tariffs to roughly half of the projected per line to $150 annually. Similarly, in 2000, the VNPT
agreed to a proposal from Comvik (Millicom) to abandon the previously contracted reduction of
revenue sharing from 50% to 40% in exchange for further commitments to invest. This decision
came in scrutiny in Hanoi in 2004 as state inspectors contended that such a deal had cost the
government $47 million in lost revenues.
The BCCs have been the best opportunity for foreign participation in Vietnam’s services sector, but
they are hardly an ideal arrangement. The structure evokes memoires of China’s CCF (Chinese
Foreign) ventures with China Unicom: foreigners are allowed to provide capital but have no rights
to an equity ownership position and no management control. The policy and market is set to
change and in fact it has begun to change in non strategic sectors such as Internet and value
added services as a result of the recent Vietnam-US trade pact.
Vietnam and the US signed a Bilateral Trade Agreement (BTA) in July 2000 that among other
issues defined a schedule for direct foreign investment in telecommunications services and set the
stage for conversion of BCC to equity joint ventures. The agreement called for Vietnamese

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partners to retain a 51% equity share. Under the BTA agreement, which applied to all countries
that have normal trading relations with Vietnam the schedule for sector opening was as follows:
       »     December 2003. Value added services (email, voice mail, online information)
       »     December 2004. ISP Services.
       »     December 2005. Mobile cellular services.
       »     December 2007. Fixed line services.
The thorniest issue related to telecom was the conversion of BCCs to equity joint ventures. The
objective is agreed but the devil, as the say, is in the details. Washington wanted to see 100%
foreign ownership. Hanoi wanted to retain the cap on foreign stakes to a minority equity position.
This way, along all these years until its accession into the WTO, Vietnam has been refining its
position on foreign investment. The details of the different kinds of provisions required by the
Government are described in the subsequent sections of this document.

5.3.3           Vietnam after its accession to WTO
Foreign direct investment has surged over the last two years to unprecedented heights for
Vietnam. Registered FDI more than doubled from 2006 to 2007, and then doubled again over just
the first seven months of 2008. Registered FDI increased from US$10.2 billion in 2006, to US$20.3
billion in 2007, to US$44.5 billion from January to July 2008. The latest data from MPI show
registered FDI at US$58.3 billion for January to October 2008, a remarkable six-fold increase over
the same period in 2007.
One of the most striking characteristics of the huge increase in registered FDI has been a
comparable escalation in the average size of FDI projects. After being relatively stable at US$4 to
US$7 million per FDI project from 2001 to 2005, the average size doubled to US$14 million in 2007
and then increased almost five-fold to US$86 million over the first seven months of 2008.
The recent surge in FDI projects include numerous “mega� projects, often well above US$1 billion
per project. These are huge FDI projects compared to typical FDI projects just three to four years
ago. Multi-US$ billion FDI projects in hotels and resorts, office buildings, information technology,
steel and petrochemicals have been approved, driving the total registered FDI to heights far
beyond any in the past. Figure 19 shows the preeminence of the different investment schemes and
foreign investments by sectors.




                           Figure 19- Investment schemes and sectorial investments pie charts – MPI, 2008


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These projects, however, are more risky, will take longer to implement, and face a greater chance
of being cancelled or scaled back—all suggesting that some of the huge increase in registered FDI
may not be completely fulfilled. The recent global downturn may also affect foreign investors’
capability to secure the financing and capital needed for these large investments. Such large FDI
inflows not only affect trade flows, but also would greatly increase Vietnam’s capital account.
Given the potentially great impact of such high levels of FDI on Vietnam’s economy and its balance
of payments, it is critical that accurate, comprehensive and timely data on implemented FDI be
collected and published. Without such data, it is impossible for Vietnamese policy makers to
forecast foreign capital inflows over time, and to fully understand the impact of FDI on Vietnam’s
productive capabilities. Unfortunately, with the decentralization to the provinces of authority to
approve FDI projects, data on implemented FDI projects have deteriorated. MPI at the national
level no longer collects data directly on implemented FDI, relying on provincial authorities for that
information. Collecting accurate and timely implemented FDI data is not easy, since it requires
each FDI project, especially the largest projects, to provide regular financial reports on the status of
implementation. A consistent, nationally integrated system is not in place to track implemented FDI
among the provinces, which has led to differential reporting standards among provinces that may
greatly reduce the accuracy of implemented-FDI data.
Although there is a broad consensus that decentralization of investment decisions have made it
easier and less burdensome to gain project approval, no provision was made to take into account
the increased difficulty this policy shift would cause for collecting data on implemented FDI.
Appropriate incentives, training and data management capabilities were not provided to
Departments of Planning and Investment at the provincial levels, who now are responsible for
collecting implemented-FDI data.
This presents a major gap in the ability for policy authorities, market participants, and policy
researchers to evaluate the real and expected impact of the remarkable new FDI trends. What are
left are incomplete official reports, and ad hoc rumors about which project is doing what. And yet, if
implemented FDI levels do increase by tens of US$ billions over the next several years, it will be
critical that government authorities and businesses understand it’s potentially huge impact on
growth, employment and regional disparities. If current policy decisions are based on expectations
that huge implemented FDI flows will occur over the next several years, and it turns out that growth
in implemented FDI is less than expected, it will be critical that data reports provide policy makers
with such information on as timely basis as possible so that policies can be adjusted.


5.4             Restrictions regarding investment
5.4.1           General approach
The pragmatic approach taken by the Government of Vietnam consists in managing the ICT
investment as per source of fund. It ends up distinguishing several sources of funds and
investment:
       »     Source of fund for development investment: feasibility study report must be prepared.
       »     Source of fund for ICT operation:
                  o     Regular expense: expense for maintaining operation of IT system.




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                  o     Expense for scientific cause: scientific research in the field of IT application and
                        development.
       »     Other funding sources
Depending on the kind of source of the investment different actions are taken.

5.4.2           Provisions on IT application investment funded by State Budget
At present, these are the official decrees and documents regarding State investment process
management:
      1. Decrees 52, 12, 07: Investment and Construction management regulations
      2. Decrees 16, 112, 99, 03: Work construction investment project management (replacing
         provisions on work construction in Decree No. 52)
      3. Official Document No. 2364 BKH/Tð&GSðT of Ministry of Planning & Investment (2005):
         for non-construction projects using state budget capital
Vietnam has no specific Decree for ICT investment. So, the legal documents to be applied by
current ICT projects cover:
       »     The State Budget-funded non-construction projects comply with Decrees 52, 12, 07.
       »     The telecommunication infrastructure construction projects (with work construction: culvert,
             cable, etc) comply with Decrees 16, 112, 99, 03.
ICT investment projects are classified into 3 groups (A, B, C) as described in Figure 20.
                                                  Classification of IT application
                                                    project using State budget


                                                                   THE PRIME                 Decide national key
                                                                    MINISTER                      projects




                                                     Ministry-level, province-level,
                                                 financial agency of the Party Central
                                                                                                    Decide project of
                                                     Committee, Socio-economic
                                                                                                     A, B, C group
                                                  organizations at Central level, State
                                                             Corporations



              Agencies attached to Ministry-level,
               province-level, financial agency of                   Authority
                 the Party Central Committee,
                                                                                   Commune-level and equivalently
                Socio-economic organizations at
                Central level, State Corporations
                         and equivalently



                         Decide projects in                                              Decide projects in
                      C group <= 5 billion VND                                        C group <= 5 billion VND
                                                                                                                        IVTECH


                                                     Figure 20 - Classification of IT application projects




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The investment process of ICT projects is shown in Figure 21.




                                                   Figure 21 - Government Investment Process for ICT


The investment process of the ICT project within a province follows the subsequent scheme,
described in Figure 22.




                                                       Figure 22 – Province Implementation Process




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The description of some of the most relevant decrees regarding Investment funded by State
Budget is as follows:
(1) Decree 64. In this decree, the Vietnamese Government acknowledges that the provincial
authorities are in a better position to identify the demand for public services as well as defining the
required infrastructure needs to address them at their provincial level.
Decree 64, therefore, decentralizes the decision making for ICT planning from the central
Government to the local provinces, and defines the responsible agencies in charge of overseeing
the overall implementation at the national level. Furthermore, Decree 64 builds on the key national
goals for the development of ICT so as to increment and ameliorate the public service delivery to
both citizens and businesses. Finally, it aims at reducing the marginalization of certain
communities in supplying affordable ICT services and public access points.
(2) Decree 49. An e-government initiative also exists that dates back to 1990. This e-government
project played an important role for the upgrade of Vietnamese ICT infrastructure. In 1993, Decree
No. 49/CP was passed for the establishment of a nationwide ICT Program, designed to implement
a governmental information management system based on an central information system,
electronic databases, local area networks, government wide area networks and six national
databases. So far, three main accomplishments have come from this initiative: Internal
computerization process; common information databases and public services offered online
through websites.
(3) Decrees 52 and 16. Vietnam does not currently have a singular decree for investment in the
ICT sector, much less one that is specifically dedicated to ICT investments in the provinces. Where
ICT investments are concerned, Decree No. 52 and 16 are utilized for the guidance of these
investments.
Decree No. 52 was passed on July 8, 1999, promulgating the regulation on investment and
construction management. It encouraged various economic sectors for investment so as to
increase industrialization and modernization and clearly defined the responsibilities and powers of
the state management bodies, investors, consulting organizations and contractors involved in the
investment process. The Decree is divided into 8 main chapters, covering the general provisions,
investment preparation, investment execution, project implementation and management, and
implementation provisions.
The decree also provides a classification of investment projects. Group A projects Include post and
telecommunication projects over 200 billion VND while Group C projects include those under 20
billion VND. Group B projects include the other projects.
Under Decree No. 52, the responsibilities of the Ministry of Planning and Investment, Ministry of
Finance, State Bank of Vietnam, other relevant ministries and branches are stated. At the
provincial level, the responsibilities of the provincial People’s Committees are briefly mentioned as
the execution of investment projects in their respective localities as prescribed by law.
Decree 16 was passed on February 7, 2005 and deals with the management of investment
projects for construction of works. This decree provides guidelines for the implementation of the
law on construction with respect to formulation and implementation of investment projects for
construction of works. It also provides the classification of projects and state management of
investment projects for construction of works.




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5.4.3           Investment project not funded by State Budget
Projects not funded by State Budget shall comply with the above mentioned provisions. However,
appraisal process will not be bound by the State’s standards and norms.
       »     State-owned enterprises shall be bound by the above standard and norms.
       »     Investor enterprises shall base on that for reference, with the exception of appraisal
             processes
Decree 121. Investment in public telecommunications infrastructure not funded by the State but by
authorized enterprises on a basis of self-finance is regulated by this decree. This decree is applied
to domestic and foreign investors conducting investment activities or relating to investment
activities in the field of posts, telecommunications in the territory of Vietnam.
       »     According to the Decree, the posts investment activities include delivery service provision.
       »     The telecommunications investment activities include establishment of telecommunication
             network infrastructure, internet, broadcast transmission and telecom service provision.
Following Decree 121, investor shall meet the following conditions:
      a) For the telecom service projects without network infrastructure (with facility):
                  •     Domestic investment project: In case of many investors, there must be at least one
                        investor with minimum equity capital of 30% of total investment capital of the
                        project.
                  •     Foreign investment project: in the first 3 years (2007-2009) as from the year
                        Vietnam joined World Trade Organization (WTO), foreign investors must joint
                        venture with at least one authorized telecom service provider in Vietnam to provide
                        basic telecom service or internet access service. Minimum rate of equity capital of
                        the Vietnamese authorized provider shall be 49% of total investment capital of the
                        project.
      b) For network infrastructure establishment projects:
                  •     General conditions:
                        -      In conformity with telecom development planning of Vietnam
                        -      In compliance with telecom national standards, technical standard; information
                               resource allocation planning and relevant legal provisions.
                  •     Special conditions:
                        -      Domestic investor: must be State-owned enterprise or enterprise with State’s
                               governing equity capital. At the same time, this investor has equity capital rate
                               of at least 51% of total investment capital of the project.
                        -      Foreign investor: must joint venture or affiliate with authorized domestic investor
                               in Vietnam. Equity capital rate of the foreign investor shall be conformable with
                               WTO’s commitments of Vietnam.
                  •     Minimum registered capital:
                        -      Public telecom network infrastructure project within a province, city shall have
                               minimum registered capital of 160 billion dong.


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                        -      Public telecom network infrastructure project within a nation shall have
                               minimum registered capital of 1600 billion dong.

5.4.4           Examples of Business Cooperation Contracts (BCCs)
Vietnam has allowed foreign investment in the ICT sector, but investment has usually been through
Business Cooperation Contracts (BCCs), rather than direct equity stakes and acts as a regulatory
device that prevents them enjoying the benefits of properly constituted joint ventures. BCCs are
similar to Build-Operate-Transfer (BOT) schemes, where the investor shares the revenue with local
partners. At the end of the BCC, the assets revert to the local partners. Prospective investors have
been pressing for different ways of structuring investment. The government has indicated a
willingness to accommodate other forms of investment, but actual change has been slow.
Some examples of these investing schemes include:
       »     East Ho Chi Minh City BCC. France Telecom entered in 1997 into a $467 million BCC with
             state owned VNPT to install 540,000 fixed telephone lines over 7 years.
       »     Mobiphone BCC. Comvik of Sweden (and Millicom of Belgium) in $324 million BCC with
             Vietnam Mobile Service Company, an affiliate of VNPT.
       »     4 provinces BCC. Korea Telecom with VNPT in $40 million BCC projects to install 150,000
             lines in four provinces: Haiphong, Quang Ninh, Hai Duong, also providing ADSL in a trial
             basis.
       »     Hanoi BCC. NTT in VNPT BCC building local telephone network in Hanoi.
       »     Saigon Postel BCC. SK Telecom led consortium with Saigon Post and Telecoms in $230
             million CDMA BCC.
       »     Hanoi BCC. Exit: Cable & Wireless, 1999 withdrew                      from $207 million BCC to install
             250,000 phone lines in Hanoi.
       »     HCMC BCC. Exit: Telstra 2003, contract with VNPT ended. Worked on satellite stations,
             the North-South fiber optic cable line, and submarine fiber optic cable lines for international
             connectivity. Had also earlier pulled out of a $300 million deal to develop telecoms
             networks in HCMC.
       »     HCMC BCC. Exit: SingTel, withdrew. Back in 1991 Sing Tel International, a subsidiary of
             SingTel invested $10 million with HCMC P&T in a mobile network which had 11,000
             subscribers.


5.5             Atos Consulting Analysis
The accession into the WTO has marked the regulatory evolution of Vietnam regarding
investments. The pressures applied by different institutions, and mostly the US, to protect the
interest of foreign investors have found the resistance of the Government of Vietnam. However,
there has been a progressive relaxation of legislation regarding foreign investment.
In the field of ICTs, there is a relevant interest of the Government in pursuing several strategic
objectives for the country. Amidst these objectives, the growth of 20-25% remains as one of the
most ambitious worldwide.




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The BTA between Vietnam and US paved the way for investments in the country in the years
2000-2007. In 2007, with the accession to the WTO, Foreign Direct Investment has started to grow
exponentially, being infrastructure investment one of the weakest areas of inversion, given the tight
grip the Government still has on it.
Both the restrictions still applying to foreign investment on infrastructure development and the
absence of a particular regulatory framework regarding foreign investment in ICT industry are clear
hardbacks to foreign activity in the country in this area.
Vietnam is a country where each ICT action must be carefully studied as the regulatory framework
imposes several restrictions and conditions on such a presence. Following Decree 121, foreign
investors must join with one authorized service provider and let this local provider have at least
49% of the corporation. This restriction applies to the years 2007-2009 and some doubts appear
on the future evolution of this legislation.
Given the interest of the GoV in stimulating the foreign actions in the country and the progressive
approach of the legislation towards that investment, it is expected in the medium term a certain
relaxation of the regulatory framework towards a free market economy under a politically socialist
regime. The example of China is a good approach to what can be expected from Vietnam in the
next years.
The strategic interest of Vietnam in its ICT sector implies the necessary determination of permitting
the progressive entrance of foreign investors in the country. It is expected to be usual in the short
term the alliances between Vietnam operators and foreign ones and the transfer of knowledge and
know how is going to be the most valuable asset Vietnam operators should obtain from those
partnerships.
A static regulatory framework would be of no interest for any foreign player. It is expected that
these players stay in the country for not a prolonged time under agreements in the form of PPPs
like BOOs, BOOTs and BCCs, expecting a future evolution to a license awarding. If Vietnam
regulatory context does not offer such a possibility it is quite probable that the foreign investment in
ICT development will get constrained and much reduced.
For all the explained it is expected that the Government develops and sanctions a regulation on
ICT investment so as to back its interest in that sector as a strategic one in the evolution of the
country in the medium and long term. Such a law will require certain openness measures so as to
lure any presence of new operators which can help the national ones to achieve higher levels of
profitability and productivity and which can help foster the network development complying GoV
planning.
Therefore, legislation should allow foreign presence and investment in ICT sector, so as to
strengthen this critical element of Vietnam’s economy. Legislation is going to play a key role in the
future of ICT industry.




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6               ICT Investment Framework

6.1             Introduction
The ICT Investment Framework introduced in this section aims to assist the Government of
Vietnam and the World Bank in improving the likelihood of success of ICT investment at the
local/provincial level, with the final goal of serving as a tool that helps in the implementation of their
strategic goals for the ICT sector in Vietnam. This framework would also help provinces to better
select, shape and propose ICT projects that have a higher possibility of achieving a significant
return on investment and that will at the same time bring about clear benefits and a valuable
impact. On the other hand, this framework has no aspiration to provide an overall toolkit for the
deregulation or reform of the ICT sector in Vietnam.
The ICT Investment Framework is made up of the following 5 components:
  1. Investment Areas – A proposed set of higher-priority areas or types of investment projects
     that are categorized along the following four categories:
           i. ICT Infrastructure;
          ii. ICT Applications & Services;
         iii. E-Government;
         iv. Human Capacity & Resources
       These proposed areas can be considered as a set of recommendations for the World Bank
       and the provinces regarding “what� to invest in (at a macro-level; the micro-level, i.e. the
       individual projects that should be selected for investment, is the result of a Project Selection
       Methodology, that is not included in the Investment Framework)
  2. Investment Models – A proposed set of investment models (that include public financing,
     PPPs, and MSPs), that are adequate and suitable for each of the four categories.
       This set of proposed investment models can be considered as a set of recommendations for
       the Bank and the provinces regarding “how� to best finance the projects that can be proposed
       under the framework.
  3. Investment Roadmap – A proposed roadmap for the roll-out of the proposed investments
     over the next 15 years.
       This proposed roadmap can be considered as a set of recommendations for the World Bank
       and the provinces regarding “when� to better propose and roll-out the projects that can be
       proposed under the framework.
  4. Province Selection Methodology – A proposed methodology for the selection of five
     provinces that would participate in the implementation of the framework; this component is
     optional –an alternative way of selecting the five provinces would be to leave this decision to
     MIC and MPI.
       This proposed province selection methodology can be considered as a set of
       recommendations for the World Bank and the MIC regarding “who� is better prepared to
       submit projects that can be proposed under the framework.


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  5. Project Assessment Guidelines – A proposed set of guidelines based on international best
     practices for the assessment and evaluation of projects that would be submitted under the
     scope of the framework.
           This proposed set of guidelines can be considered as a set of recommendations for the World
           Bank regarding “how to assess� individual projects that could be submitted for financing, and
           for the provinces on “how to shape� their proposals for a better likelihood of success. It also
           includes a proposed Project Proposal Template to be used by provinces to properly describe
           their proposals for further assessment and evaluation by the World Bank.

         What (Macro-Level)                                                                                      How                                                             When                                                         Where                                  How to Assess / Shape


                                                                                                                                                                                                                                [4]                                                        [5]
              [1 ]                                                                                [2]                                                                 [3]
                                                                                                                                                                                                                             PROVINCE                                                   PROJECT
          INVESTMENT                                                                          INVESTMENT                                                         INVESTMENT
                                                                                                                                                                                                                            SELECTION                                                 ASSESSMENT
             AREAS                                                                              MODELS                                                             ROADMAP
                                                                                                                                                                                                                           METHODOLOGY                                                 GUIDELINES

        C OMP ON E NT 1 –
     IN V E S TM E N T AR E AS
                                                                                                                              1                                                                                                     Inpu t

     A – ICT I nfrastructure

       Wireless Broadband
                                           B – IC T App s. &
                                               S ervi ces
                                                                            C – e-G overn men t

                                                                                 G 2E Portals
                                                                                                           D – Hu man C ap acity
                                                                                                               & Reso urces                                                N
                                                                                                                                                                    COMPO ENT 4 –
                                                                                                                                                                                                                  4                O utpu t



             Acc es s                                                                                                                                                V
                                                                                                                                                                 PR O INC E SELEC TION
                                           IC T f or B usines ses                                                                                                          D
                                                                                                                                                                    METH O OLOGY
                                                                                       PKI                                                                                                                             List of 5
                                                                                                                                                 Prov ince 1                                                          Selected
     Broadband Networks for                                                                                 Projec t M anagement                                                                                      Provinces
       Sc hools & Colleges                       E-H ealt h                    Business Tax                                                         Data
                                                                                                              S kills & Training
                                                                            Management S ys tems                                                                   Scoring                                            Provi nce1
                                                                                                                                                 Prov ince 2
                                                                                                                                                                   C riteria1
       A lternati ve N et work                                                                                                                      Data
                                                                            B us ines s Com munit y
           Inf ras tr uc tures                 E -A griculture                                                                                                      Sco ring
                                                                                    P ortals               ICT I nf ras truct ur e Sk ills       Prov ince 3                                                          Provi nce2
                                                                                                                                                                   Crite ria 2
                                                                                                                    & Training                      Data
       Deploym ent of all-IP                                                     Adm inistration                                                                      Scoring
           Networks                          E-Environment                       Sim plific ation                                                                                         R anking                    Provi nce3
                                                                                                                                                                     Criteria3
                                                                             Land and Property              ICT A pps . & Serv ices                                                                                   Provi nce4
          Deploy ment of                   I T f or Government                                                                                         …                                                                                        COM PONENT 5 –
                                                                            Management S ys tems              S kills & Training                                          …                                                                        PR OJECT
      Prov inc ial Dat a Centers


      P rom ot ion of term inals
                                                  A genc ies

                                                                             Online I nc ome Tax
                                                                                                                                                Provi nc e8/10
                                                                                                                                                    Data
                                                                                                                                                                                                                      Provi nce5
                                                                                                                                                                                                                                                 ASSE SSM NT
                                                                                                                                                                                                                                                  GUIDE L
                                                                                                                                                                                                                                                          E
                                                                                                                                                                                                                                                         INES                                                  5
                                         IC T for Educ at ion and                                          E-Government Sk ills &                                     Scoring
       (laptops, net book s) in
                                            Lifelong Learning                 E -S ocial S erv ices              Training                                            CriteriaM
       s chools and colleges
                                                                                                                                                                                                                                                  A - Infrastructure   B – Apps. &       C - eGovernment   D –Human
                                                                                                                                                                                                                                                                        Services                           C apacity&
                                                                                                                                                                                                                                                                                                           R esources

                                                                                                                                                COMPONENT 3 –
       COMPONENT 2 –
                                                                                                                                                  ROADMAP                                                                      3                   GuidelineA1         GuidelineB1        Guideli neC1     Gui deline D1
    INVESTMENT MODELS
                                                                                                                                2                                                                                                                  GuidelineA2         GuidelineB2        Guideli ne C2    Gui deline D2


                                                                                                                                                                                                                                                   GuidelineA3         GuidelineB3        Guidel ine C3    Gui delineD3
                                   A- Infrastructure                B –Apps. &                  C - eGov                D –Human                                                  2010-2014          201 5-2019       20 20 -2025
                                                                     Services                                           Capacity &
                                                                                                                                                                                                                              Tim e                        …                 …                  …                 …
                                                                                                                        Resources
                                                                                                                                                   eGovernment                                                                                     GuidelineA N        GuidelineBN        GuidelineCN      GuidelineDN
         Investment
           Model 1

         Investment                                                     X                             X                         X               Ap ps. & Services
           Model 2
                                                                                                                                                Human Capacity &
         Investment
                                           X                            X                                                       X                 Resources
           Model 3
         Investment                                                                                                                                In frastructure
                                           X                            X                             X                         X
           Model 4

                …
                                                                                                                                                    Regulations
         Investment                                                                                                             X
           Model M




                                                                                                                                             Figure 23 - ICT Investment Framework


                A relationship exists that links the three first modules. The area of investment will greatly
                impact the type of investment model to be used as well as the investment roadmap.
                The province selection methodology is an independent module that is optional and subjected
                to the World Bank or any other donor agency interest.
                The project assessment guidelines will largely be influenced by the area of investment and is
                less dependent on the type of investment model.


6.2                                Component 1 - Investment Areas Description
This component outlines a set of proposed areas or types of projects that should receive higher
priority for investment, categorized along the following four categories:
                    a. ICT Infrastructure
                    b. ICT Applications & Services
                    c. E-Government


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           d. Human Capacity & Resources

        COMPONENT 1 –
      INVESTMENT AREAS

     A – ICT Infrastructure                       B – ICT Apps. &                  C – e-Government     D – Human Capacity
                                                      Services                                              & Resources
         Wireless Broadband                                                            G2E Portals
               Access                             ICT for Businesses
                                                                                           PKI
      Broadband Networks for                                                                             Project Management
        Schools & Colleges                              E-Health                      Business Tax
                                                                                                           Skills & Training
                                                                                   Management Systems

         Alternative Network                                                       Business Community
            Infrastructures                          E-Agriculture
                                                                                         Portals        ICT Infrastructure Skills
                                                                                                               & Training
         Deployment of all-IP                                                         Administration
              Networks                              E-Environment                     Simplification

                                                                                    Land and Property    ICT Apps. & Services
           Deployment of                          IT for Government                                        Skills & Training
       Provincial Data Centers                                                     Management Systems
                                                       Agencies
                                                                                    Online Income Tax
       Promotion of terminals
       (laptops, netbooks) in                   ICT for Education and                                   E-Government Skills &
                                                  Lifelong Learning                 E-Social Services         Training
        schools and colleges



                                                                   Figure 24 - Investment Areas



6.2.1           ICT Infrastructure

6.2.1.1 Network &IT Infrastructure
         Regional broadband network connectivity
    1. Wireless Broadband Access - One of the most important lines of work in infrastructure
       should be the deployment of wireless broadband connectivity through technologies such as
       WiMax. This is quite a relevant opportunity for its reduced cost and its adaptability in hard to
       reach regions, where telecommunications penetration tends to be rare or non-existent. This
       recommendation applies mostly to those provinces with very low penetration of
       telecommunication services and with geographical characteristics (e.g. mountainous terrain,
       remote areas) that make the deployment of ADSL –and in the future FTTX- unpractical or
       unprofitable for service providers.
         Rationale. The roll-out of WiMax in provinces that are in hard to reach locations and that lack
         existing infrastructure to support broadband internet access and cannot afford it is highly
         recommended in the Vietnamese environment. Many provinces are in highly mountainous
         regions where the development of ICT infrastructure would be very costly and unprofitable.
         WiMax will enable the provinces to access wireless broadband connectivity without the need
         of a fixed (wireline) infrastructure.
         There have also been several successful case studies of WiMax implementation in a few
         Vietnamese provinces. These case studies serve as an example of the ease of
         implementation as well as the favorable reception received by the residents in the village.



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    2. Rollout of broadband networks in schools and colleges - This line of investment would
       serve three goals. First, the extension of connectivity to the students of Vietnam would
       increase the quality of their education. Secondly, it would act as a driver of the future
       demand of Vietnam’s citizens for telecommunication services which is a very important point.
       Thirdly, the adaptability of Vietnam students to higher productivity jobs involving the use of
       computers could add up to the productivity of the country. This line of investment should be
       technology-neutral, and accommodate the most appropriate technology (xDSL, fiber, WBA)
       in each chase.
         Rationale. It has been noted the strategic importance of the extension of broadband
         connectivity and ICT technologies in the schools and universities to ensure that future
         citizens are familiarized with new technologies. Also, by extending broadband infrastructure
         these kind of projects pay a huge return in training future generations, which will be prepared
         to get engaged in higher productivity jobs.
    3. Rollout of alternative network infrastructures – The provision of broadband services with
       an extended geographical coverage may probably require the use of alternative networks.
       Among the networks likely to be included in this line of investment we can mention fiber-optic
       networks owned by gas and electricity companies. This could be an effective option for the
       upgrading of backbone fiber networks in some provinces. The ownership structure of such
       networks, their coverage, technologies and the services they will deliver needs to be
       discussed by the various stakeholders involved.
         Rationale. The goal of achieving nation-wide broadband coverage in Vietnam will very likely
         require a combination of network infrastructures –fixed, mobile-, and it has been proven that
         the roll-out and operation of alternative network infrastructures –specifically with respect to
         fiber backbones- can help extending the geographic ubiquity of broadband access. However,
         the appropriate regulatory and legal provisions should be made in order to provide an
         attractive environment for this possibility.


         Promotion of converged networks and services
    4. Deployment of all-IP networks - Convergence between media and ICT is becoming a
       global market trend driven by technological developments and consumer preferences.
       Development in digital technologies, especially those related to the web (IP communications,
       streaming and casting services, P2P applications, etc.) is creating de facto standards for
       both the media and the telecommunication sectors. Providers in various countries have
       found that integrated packages of Internet, telephony, media and entertainment services best
       suit customer preferences. Moreover, provision of such integrated services over a single
       platform significantly reduces provision costs and allows for a more efficient utilization of
       infrastructure. Such economies of scale reflect in better returns on investment in
       infrastructure projects and hence provide an additional incentive for wide-scale deployment
       of broadband infrastructure. Focus should be placed on the deployment of all-IP networking
       solutions, and in the future on NGNs and converged services.
         Rationale. Atos Consulting suggests the deployment of all-IP networks, which in the long run
         would help to reduce network costs and take advantage of more advanced services in
         Vietnam. Although the technological underpinnings –e.g. IMS IP Multimedia Subsystems- are
         coming to the market, this is not an option for the short term, since the required business
         models that make this a sustainable option are still under development.


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         Provincial IT Infrastructure
    5. Deployment of Provincial Data Centers - IT operations are a crucial aspect of most
       organizational operations. One of the main concerns is business continuity; when companies
       and organizations rely on their information systems to run their operations, if a system
       becomes unavailable, operations may be impaired or stopped completely. It is necessary to
       provide a reliable infrastructure for IT operations, in order to minimize any chance of
       disruption. Information security is also a concern, and for this reason a data center has to
       offer a secure environment which minimizes the chances of a security breach. A data center
       must therefore keep high standards for assuring the integrity and functionality of its hosted
       computer environment. A necessary element in the evolution towards reliable and secure
       ICT applications and services, and e-Government operations is the deployment of Provincial
       Data Centers. Following the TIA-942 Data Center Classification, Provincial Data Centers
       should comply with at least Tier 2 specifications (annual downtime of 22.0 hours, 3-6 months
       to implement), and in some cases with Tier 3 specifications (Annual downtime of 1.6 hours,
       15-20 months to implement).
         Rationale. The deployment of data centers in the provinces is a necessary step, although not
         the most urgent one. These data centers will be required as computerization of data is
         increasingly being carried out and companies become more reliant on ICT applications and
         services to operate on a daily basis. The data centers would enable the businesses to run
         critical applications such as databases, file and application servers, among others.

6.2.1.2 Terminals
    6. Promotion of terminals (laptops, netbooks) in schools and colleges - This line of
       investment would serve as a complement to the rollout of broadband networks in schools
       and colleges.
         Rationale. This area is highly recommended by Atos Consulting as in many occasions the
         lack of computers in schools and colleges prevent students from practicing and using what
         they have learnt in the classroom and taking their knowledge to the next level. Without
         sufficient or appropriate equipment, students and teachers may never be able to fully utilize
         the potential of ICT in an educational environment.
         However, it must be made sure that this equipment complements a properly designed set of
         ICT applications and services. The terminals act as a complement to a solution for an ICT
         problem and not as the solution itself.

6.2.2           ICT Applications & Services
    1. ICT for Businesses (special focus on SMEs) – Projects that support the development and
       use of local ICT applications (e-Procurement, e-Commerce) for business, SMEs and citizens
       that takes into account local personalized needs. These applications would encourage the
       access of customers to information and the equality of that same information for the suppliers
       from Vietnam. These initiatives of e-Procurement and e-Commerce can be very
       heterogeneous technologically and in the variety of devices which would access them.
         Rationale. These types of ICT services have proved to be very highly demanded in the
         provinces with ICT projects based on e-commerce such as an e-commerce network and
         other development proposed in the provincial ICT Master Plans.


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         It has been noted18 that an integral contributor to a country’s e-readiness is its overall
         readiness to promote and facilitate business. Utilizing e-commerce and extending ICT for
         Businesses improves countries’ ability to maintain a stable, secure and unfettered place to
         conduct commerce in the manner in which it attracts and fosters digital commerce. Most
         emerging economies are spending a great effort to improve their investment and trade
         conditions in order to attract global business. As this occurs, international business has
         continued to look favorably upon emerging markets in which there is both stability and
         increased opportunities for organic growth.
     2. E-Health – Projects for the development and deployment of different medical services and
        applications to manage and control medical profiles, temporal and location extension of
        diseases, and the sharing of information, if possible, to improve diagnosis on patients. All of
        this could be managed, integrated and controlled at a provincial level.
         Rationale. There are several examples of the use of e-health applications in Vietnam, such
         as the case of Khanh Hoa province, which has proposed an e-health project for the
         management of healthcare services through the computerization of the health branch in the
         province. They have also proposed the development of an e-health application and a
         software management system for the hospital.
         e-Health could be deployed both at provincial or national levels throughout Vietnam, to share
         diagnostics on clients asking for a second opinion (and thus reducing the necessity of
         patients to move between different hospitals or regions) or to integrate information on
         patients to get a more a centralized health database.
     3. E-Agriculture – Projects for the development and deployment of applications which can be
        used in the agricultural sector to manage remotely the evolution of the harvest or different
        indicators, ranging from meteorological factors to human resources availability through the
        knowledge of breed prices to the degree of customers’ interest in very determined products.
        ICT can serve as a tool for agriculture producers to increase their productivity, gain control
        over their processes and obtain competitive advantages.
         Rationale. Given the relevant impact and importance of agriculture in Vietnam’s economy a
         progress in its agriculture processes –e.g. information on harvests- would impact directly in
         the gross output and productivity of the country.
     4. E-Environment – Projects that support environmental protection and the sustainable use of
        natural resources. These kinds of projects can help out countries to improve energy and
        environmental efficiency in specific activities as well as assuring their environmental
        sustainability.
         Rationale. Countries with economies in transition, such as Vietnam, face difficult choices in
         the name of economic progress when also trying to implement their desired environmental
         policies. Environmental issues can often be contradictory to government strategies and at the
         same time costly. ICT has been used in many cases to great effect to progress strategies for
         conservation and environmental reform. Examples of projects include use of ICT for water
         resources and irrigation management, flood monitoring and forecasting, decentralized water
         management systems, provincial/national environmental information systems, etc.




18
     E-Readiness Ranking 2008 – Maintaining momentum- The Economist Intelligence Unit, 2008

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    5. IT for Government Agencies – Projects for enhancing the current stock of IT applications
       and services in the provinces (with a clear initial focus on overcoming most of the
       weaknesses detected by Atos Consulting and described in Section x). After fixing and
       enhancing the existing set of applications, projects should be pursued in deploying next-
       generation IT applications and services (e.g. Web2.0 based) for improving the efficiency and
       productivity of government officials.
         Rationale. Apart from the considerable and necessary effort to be carried out by the
         government to gain access to citizens through e-government services and applications, its
         systems as well as its HHRR policies must be aligned with that ambitious planning.
    6. ICT for Education and Lifelong Learning – Projects that support the use of ICT technology
       and applications in the educational system (e-learning, management systems, cooperation
       among institutions, etc.) through all stages of education –pre-university, higher education,
       lifelong learning-, with multiple goals, such as raising the quality of education to international
       standards, develop the skills needed for the knowledge society, prepare all school and
       university students for the digital workforce, etc. These projects should be rolled out
       according to a long-term schedule that goes through the following phases (a) getting
       computers into institutions, fostering the ICT skills of teachers, (b) integrate ICT into the work
       of schools and educational institutions, (c) foster better management of education systems.
         Rationale. Most provinces have already e-education initiatives, be it of differing levels, in their
         educational systems. Examples would be the development of an education information
         system and the computerization of the education and training branches. ICT projects have
         also been proposed for the development of IT applications for educational purposes.
         This recommendation would complement Recommendation 3 in section 6.2.1 of this
         document.

6.2.3           E-Government
         Regarding e-Government, the degree of interest of the different provinces on the subject is
         quite variable, depending on the extent of telecommunications services and applications
         penetration. Provinces with low figures should focus first on other investment areas (ICT
         infrastructure, ICT Applications and Services). Given this, it is also accepted that solid E-
         Government applications can drive the rollout of better infrastructures.
         In the short term, the most viable (and perhaps desired) e-Government partners may be
         multinational companies that have proven experience and capacities to deliver. However, the
         long-term development of local ICT companies can, and often should, be part of e-
         Government planning.
         One effective strategy might be to pair an experienced multinational company with a suitable
         local company in the development and delivery of e-Government applications. This can
         promote the transfer of technology and skills to local industry while at the same time ensuring
         that outsourcing produces results.
         Vietnam has deployed certain web pages, portals and information repositories which make
         the country able to position itself on the first stage of e-Government development
         (Emerging). Interaction and transactions should be encouraged between the citizens and the
         government through different investments on infrastructure and deployment of e-Government
         applications and services.


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         Atos Consulting recommends certain components that are vital for the implementation of e-
         Government in the Vietnamese context. These components are important as it will provide
         accountability, efficiency, availability of consultation and participation from the citizens. These
         components will aid the both the central and provincial government in the transformation of
         structures and processes, change and knowledge management. These applications and
         services in the e-government will enable the Vietnamese provinces to enjoy the benefits from
         a decentralized execution while at the same time, benefiting from an increased competence
         in the private sector and innovative capacity.


         Back Office Projects
     1. E-Government infrastructure and interoperability
     2. Government to employee (G2E) portals
     3. Public Key Infrastructure (critical for building trust)
         Rationale. Experiences of e-government initiatives show that new ICT-based systems are
         often developed with specifications and solutions that match goals and tasks relevant to a
         particular agency, but without adequate attention to the surrounding government institutions
         and ICT systems. The result is a patchwork of ICT solutions that are not always compatible
         with each other, despite the need for interoperable systems. In addition to the loss of
         efficiency, there is a huge loss of resources on developing multiple systems to solve the
         same problems, as well as on generating the same data from many different places. Some
         countries have addressed this problem by drafting a Government Interoperability Framework
         (GIF)19. These GIFs set out the policy and technical structure by which e-government
         services are developed in order to ensure coherent flow of information across systems.
         These back office projects are critical to provide the appropriate interoperable infrastructure,
         and to develop new modes of cooperation and cross-boundary cooperation between both the
         government and their employees as well as between the government and the citizens.


         Business Services
     4. Business Tax Management Systems
     5. Business community portals
         Rationale. The provision of these business services will put the Vietnamese provinces one
         step closer to a more efficient government with respect to services provided to public and
         private companies. These services will also help in the development of sufficient business
         audit and evaluation processes.


         Citizen Services
     6. Administration Simplification (E-Signature, E-Payment)
     7. Land and property management systems


19
  E-Government Interoperability: A Review of Government Interoperability Frameworks in Selected
Countries. UNDP, 2007

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   8. Online income tax applications
   9. E-social services
         Rationale. These services will enable citizens to conduct common transactions online,
         without users having to understand the structure of the government agencies involved. They
         should open new opportunities for major change in the relations between the government
         and citizens, including self-service, integration of information and services, and elimination of
         time, distance and availability of staff as constraint to providing information and services.

6.2.4           Human Capacity & Resources
      1. Development of Project Management skills and certification (PMP, PMBOK)
      2. Training and skills development projects associated to projects on ICT infrastructure
      3. Training and skills development projects associated to projects on ICT applications and
         services
      4. Training and skills development projects associated to projects on e-Government
         Rationale. As discussed in the previous chapters, human capacity and resources is a
         significant and crucial aspect in ICT development. The lack of human capacity with sufficient
         ICT skills and experience is a common problem experienced in the provinces throughout
         Vietnam. A reason for this is the brain drain caused by Vietnamese residents in the provinces
         moving to the bigger cities such as Hanoi, Ho Chi Minh and Da Nang, where such jobs are
         more demanded and come with better pay. Without the appropriate human capacity and
         resources, ICT infrastructure, applications and services will have much difficulty in their
         deployment and their potential may never be fully realized.
         Atos Consulting recommends the creation of several regional centers for ICT diffusion and
         training of best practices on development and management of ICT Projects, located nearby
         leading Universities and research centers. This way, practitioners, officials and ICT experts
         could share information, knowledge and experience obtained directly from their local ICT
         projects.


6.3             Component 1 – Investment Areas Impact & Time of Delivery
Figures 25 through 28 show the analysis of the different investment areas described in this section
based on their impact on Vietnam’s ICT sector and their expected time of delivery of results (short
term 0-2 years; medium term 2-5 years; long term 5-10 years). The different kind of opportunities
have been marked by the darkness of the area they fit in; this way, the darkest area comprises
those investment areas which would take the least time to be developed and would impact the
most in Vietnam’s ICT environment, or low hanging fruits. This does not imply a deterministic
success of those investment areas if so that those areas have been recognized as those having a
lower risk and a higher impact in the lesser time.
It won’t always be possible that those opportunities with the stronger impact and which take up the
least time are the first ones to be carried out. There could exist a relationship between this
investment area and another one which implied dependence on the previous realization of the
latter; it could also happen that the selected investment area can’t be addressed until some years
on.


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                                                                                   Figure 25 - Network and IT Infrastructure Prioritization Matrix




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                                                                                   Table 2 - Network and IT Infrastructure Impact and Time




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                                                                                   Figure 26 – ICT Applications and Services Prioritization Matrix




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                                                                                   Table 3 - ICT Applications and Services Impact and Time




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                                                                                   Figure 27 - eGovernment Prioritization Matrix




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                                                                                   Table 4 - eGovernment Impact and Time




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                                                                                   Figure 28 - Human Capacity and Resources Prioritization Matrix




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                                                                                   Table 5 - Human Capacity and Resources Impact and Time




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The temporal relationship between investment areas is reviewed in the Investment Roadmap, in
section 6.5 of this document. The interest and purpose of this impact-timeframe for delivery
analysis shown in this section 6.3 focuses on how to solve budgetary or time restrictions which
made it necessary to select between different investment areas in a determined moment, or the
search for those activities optimal from a time-impact point of view.


6.4             Component 2 - Investment Models
This component outlines a set of proposed investment models (or to be more precise, PPP/MSP
options), categorized along the 4 broad categories introduced in the Investment Areas.
Public financing exists as an option for financing any ICT projects that the provinces may proposal
under this investment framework. However, the provinces should evaluate a range of financing
instruments that encourage private sector investment when drafting their proposal. Whenever
possible, these projects should be financed through PPPs or MSPs so as to bring about as much
participation as possible from both private and/or foreign investors. This will enable the province to
capitalize and gain maximum profits from its investment while minimizing the risks at the same
time.
Public funds should mainly be considered in the area of ICT infrastructure when it involves the
extension of connectivity to poor and less accessible areas of Vietnam. The GoV should not extend
its involvements further than the arm of the VTF and should allow a free market economy in line
with the liberalization and deregulation approach that has been implemented over the last few
years.
The following guidelines are by no means mandatory, but they build on international best practices
and can be used by the provinces and the World Bank to explore the best financing options for
proposed projects. They are summarized in Table 2 below.




                                                   Table 6 - Investment areas and investment schemes


Some of the general recommendations provided by the 15th APEC Finance Ministers Meeting
regarding PPPs and risk assessment in these kind of projects are as follows:
       »     Recognizing the importance of a sound contractual and property rights framework to
             support, among other things, clear and transparent risk allocation in PPP contracts;
       »     Supporting PPP development by establishing dedicated PPP units that have the capacity
             to identify, manage and allocate risk appropriately;




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       »     Adopting a flexible, streamlined and transparent tendering process that can be tailored to
             individual projects;
       »     Removing barriers to institutional investment in non government debt and equity markets
             to facilitate greater private sector financing of infrastructure;
       »     Establishing a solid and publicly available pipeline of infrastructure projects to retain and
             attract private capital; and
       »     Providing strong government commitment to the use of PPPs in order to help reduce risks
             that the private sector is unable to manage.
Apart from the usual risks in the different phases of any PPP Project (Engineering and
Construction, Start Up and Operations), in the case of Vietnam some of the more relevant risks to
this kind of activity would the ones sorted hereafter:
    Institutional and Contractual Triggers of Political Risk
    Adverse selection and moral hazard contribute to the vulnerability of projects and proponents to
    macroeconomic shocks (and subsequently, to broad political risk).
    Global PPP experience suggests that political risk can be heightened by institutional and
    contractual weaknesses, such as:
           1) The quality and transparency of the system of contracting.
           As an example, the Philippine government was compelled to cancel an international airport
           contract in 2002, due to perceptions that the signed contract was detrimental to the interests
           of the state.
           2) The capacity of government and state-owned enterprises to coordinate projects and bear
           some risks, especially fiscal risk.
           PPAs signed by state-owned utilities with IPPs featured agreements for guaranteed off-
           takes, but severe economic downturns led to a drastic deterioration in the utilities’ financial
           positions (by causing the credit risk of the off-taker to decline). With national fiscal balances
           under severe threat as a result of potentially large debt and contingent liability implications,
           the governments of Indonesia and the Philippines decided to renegotiate the PPAs.
    Weaknesses in Project Planning, Design and Contracting
    Aspects of project planning and design may also heighten political risk, such as:
           1) The capacity of off-takers and customers to pay tariffs.
           Although retail prices for power had been raised in the Dominican Republic, many industrial
           and residential users refused to pay tariffs. The government itself missed payments regularly.
           Poor collection occurred since the tariff was already one of the highest in the region.
           2) The political and public acceptability of the project, as well as the extent of public
           consultation performed for the project.
           In some cases, project design is not done through consultation, and is railroaded through the
           approval process. Customers subsequently lobby government to cancel the project or
           nationalize it.
           The examples above suggest that political events, such as contract cancellations and
           nationalizations, can also be endogenous with respect to institutional and contractual



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         weaknesses. This implies that political risk can arise from situations or events that can be
         controlled by either the government or the investor.
         In addition, there is sufficient anecdotal evidence to suggest that weaknesses in project
         planning, design and contracting can contribute directly to project failure. It is well known that
         excessive demand forecasts, severe risk misallocation in contracts, and underestimation of
         project risks, can all contribute to failure.
    Apart from the different types of risk described above, a number of other factors can help
    determine the outcomes of a PPP projects. These include, among others:
         1) The nature of institutional arrangements.
         Outcomes may vary depending on whether contracting is done with the federal or local
         governments). The federal government may have some advantages over local governments
         when contracting infrastructure projects (e.g., greater expertise with large projects, or greater
         clout when mobilizing national resources and cross-ministry coordination).
         2) The nature of regulatory arrangements.
         It is well-known that compared to rate of return regulation, price caps create stronger
         incentives for achieving operational efficiency in projects. If the motivation to enhance
         efficiency is strong enough, it may have implications on project design and operations, as
         well as on project outcomes. On the other hand, rate of return regulation may be the modality
         preferred by private project developers.
         3) The country’s openness to trade.
         It may be the case that infrastructure outcomes in more open economies are superior to
         others because trade creates a natural demand for infrastructure (roads for access, ports,
         etc.), thereby reducing demand and other risks.
         4) The nature of the sector involved.
         Outcomes may differ across primary sectors (energy, water, transport, telecoms), as well as
         across sub-sectors.

6.4.1           ICT Infrastructure
ICT Infrastructure - Network & IT Infrastructure
Given the nature of this kind of investment revenue schemas like Service Contract, Management
Contract or Leasing would not be profitable enough to attract private investment. The progressive
and expected relaxation of the regulation would open up the use of schemas owned partially or
totally by external investors.
The only case in which public funds should be still considered for infrastructure rollout would be the
extension of universal access to the poorest areas in Vietnam. VTF Funds should be directed to
the extension of connectivity in those areas and national operators would carry the responsibility of
deploying those networks. It is less expected that foreign operators would take part in deploying
infrastructure in less competitive and profitable areas. In this situation of extension of connectivity
alternative schemas like Passive Private Investment (Government Bonds) could be used to attract
foreign players to participate in the operation of national networks. Passive Private Investment is
only proposed for these aims.




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The future Telecommunication Bill could improve the options for foreign ownership in
telecommunication companies by improving the regulatory environment for PPPs, for example
through the use of concession schemas. Regulation should open to guarantee the possibility of
foreign players operating freely in the country. This way the country would attract investments and
players able to establish PPPs partnerships with the government or provinces in the country.
ICT Infrastructure - Devices
In this case, there is no need of any concession to operate or take devices in the country’s market.
Even though, revenue schemas such as Lease can also be used for the deployment of devices.
Partnerships in collaboration with telecom operators and service providers would be the preferred
way to approach the market. BOOs and BOTs will be the preferred approaches regardless of the
regulatory evolution over the next years. Passive Private Partnerships could also be used, but their
relevance is expected to be marginal.

6.4.2           ICT Apps. & Services
Given the heterogeneity of this area there could be a certain possibility of using any of the
PPP/MSP options for projects proposed in this area. However, there is no expectation of Services
Contracts or Concessions. The former implies a very short relationship between contractor and
buyer, and in the case of ICT Apps. & Services the development of systems will require a longer
time and there is no need of Concessions in this case to operate in the country.
Joint ventures could be quite an interesting way combining the knowledge on certain subjects
supplied by a foreign player and the knowledge on the country or regions situation supplied by
Vietnamese players. Thus, the relationship between the partners would be absolutely critical in
such kind of partnerships.

6.4.3           E-Government
This area of work requires very different revenue schemas so there should be a careful selection of
the proposed financing option. The relationships among all the stakeholders necessary to carry out
the creation, maintenance and operation of websites, portals, services and any kind of applications
regarding e-Government must be carefully considered. Joint ventures in which the participation of
external investors or agencies should be encouraged, mostly if it is a foreign agency with
experience in the field of deploying e-government services in countries with a regulatory and
political situation like Vietnam’s.

6.4.4           Human Capacity & Resources
The building up of human capacities and resources in ICT tends to be performed in very short
contracts with the presence of specialists who are in charge of training (formal and on-the-job).
However, it is expected that a substantial fraction of the development of skills and capabilities in
ICT will take place associated to infrastructure deployment; this will require the acquisition of new
skills to manage, operate and profit from the ICT systems and communication networks deployed.


6.5             Component 3 – Investment Roadmap
The methodology used in the roadmap, T-Plan, aims to help the preparation of technology
roadmaps through the definition of several areas of interest:


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      »     Definition of market requirements: The market is the main driver of any technological
            roadmap and thus this must be the first step to be defined.
      »     Definition of product requirements: Based on the market requirements and demand
            drivers, the characteristics of the future products are derived.
      »     Definition of technology requirements: The subsequent step is the ability to define which
            technologies will provide the characteristics required by those products.
      »     Definition of R&D timeline: It should be feasible presently to plan an R&D timeline for a
            determined period of time from the status of the company and its expected dedication of
            resources.
In this manner, T-Plan can be defined as a methodology which relates different areas of interest
against a timeline. Much knowledge on today’s technologies as well as their expected evolution is
required: technology watch and technology prospective are required as well as other
methodologies such as scenario planning, quantitative analysis, etc.
In the case of investment planning in Vietnam, the structure of the layers has been modified as it is
a different type of roadmap, centered on a determined industry and investment areas. The three
steps given are detailed in Figure 29:
      1. Detection of trends which will define the sociopolitical, economic and human resource
         dimensions in Vietnam over the next fifteen years
      2. Detection of aspects required to cover those trends
      3. Selection of investment areas based on determined aspects




                               Figure 29 - Steps of Atos Consulting Roadmap on Investment Planning in Vietnam


A more detailed description of the method followed to generate the roadmap can be found on
Annex K, “T-Plan Roadmapping Technology.�
Below, figures 30 - 32 describe the results of the roadmap by Atos Consulting for the three layers
previously described: trends, demands and investment areas.




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                                                  2010                                         2015                                         2020                                        2025
                                                                     Growing demand for mobility                  Increasing concern for health, safety and security
            Society


                                         Automation of activities                     Extension of coverage to the poorest regions             Increased mobile and home working


                                                                                               Extension of technology and portable devices throughout
                                           Interest in entertainment through the Internet                                                                                Social life extended
                                                                                                                     the citizens
           Economy




                                      Deregulation & liberalisation                             Growing competence in ICT sector



                                            International openness                          Increasing investments in Vietnam            International expansion of Vietnamese corps
Trends




                                                           Progressive use of ICT to gain efficiency        Full extension of ICT use in Vietnam’s corporations,       Extensive use of ICT in e-Environment
                                                                    and competitiveness                              including low value added activites                              issues



                             Electronic management of ops by
                                                                                eGov oriented to citizens                  eGov Social Networks Citizens
            Politics




                                        Government

                                                                               eGov Social Networks
                                                                                                                  e-learning in schools and universities                           e-health
                                                                                  Corporations


                                                  eGov oriented to corporations                   Use of eGov applied to provinces                  Integration of eGov between provinces




                                     Knowledge supplied by foreign institutions                       Increase of migration fluxes                     More skilled workforce
            HRs




                                                                                        Growing population in cities                           Increasing gap between wealthy and poor             Maturing population



                                Development of the “digital generation�                    Transfer to industry and services                 Development of Knowledge Society




                                                                              Figure 30 - Trends layer of Atos Consulting Roadmap on Investment Planning in Vietnam



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                                                       2010                                         2015                                       2020                                         2025
                                                                Mobile devices, increased coverage, downsized
                                                                                                                    Environmentally compliant devices and networks
                Society                                                              prices

                              Automatic systems to manage remotely low added
                                                                                              Total extension of ICT to all regions                            Online Working
                                               cost activies


                                              Gaming, video over the Internet, entertainment                           Integrated devices                              Social Life and Web Evolution
                Economy




                                       Evolution of regulation to gain full              From the openness of competition and to foreign players
                                     competitiveness for national investors               reaching a competitive environment of full competition

                                    Regulation on investments focused on taking             Attractive environment in Vietnam to make     Strengthen Vietnamese companies through
                                  advantage of cooperation with international corps                 foreign corporations invest       legislation and taxes to make them compete abroad
     Demands




                                                                                                                Introduction of ICT in activities throughout the       Appliance of e-Environment to improve the
                                                               Massive introduction of ICT in businesses
                                                                                                                          different sectors in Vietnam                   compliance with environmental issues



                                     Extension of online tools for           Coming out of the first systems to relate Gov launches social networking sites for the
                 Politics




                                            Government                             Government and citizens             sharing of opinions, interest and knowledge

                                                                              Gov launches social networking Extension throughout universities and schools           Progressive sharing of sanitary information
                                                                             sites for corporations to get along of e-learning applications and services             throughout hospitals and medical facilities

                                                 First systems to relate Government and        Extensive use of eGov systems and applications         Provinces governments share data to gain
                                                              corporations                           throughout provinces governments                  advantage of knowledge and information


                                Agreements with foreign institutions for development of ICT          Interchange programs of people from          Extensive use of ICT in businesses and
                                  in Vietnam and extension of knowledge and technology                 and to Vietnam to gain knowledge           corporations to take advantage of staff
                 HRs




                                                                                            Growing population in cities                          Increasing gap between wealthy and poor              Maturing population


                                Use of Universities and schools to contribute to       Growing interest in the use of ICT in industry and
                                                                                                                                                Development of Knowledge Society
                                  the diffusion of ICT knowledge in students             services to gain efficiency and productivity




                                                                          Figure 31 - Demands layer of Atos Consulting Roadmap on Investment Planning in Vietnam




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                                                               2010                                       2015                                       2020                                      2025

                                     Infrastructure
                                                                             Wireless BroadBand Access                                             Deployment of All-IP Networks



                                                                           Deployment of Provincial Data Centers                              Rollout of alternative network infrastructures


                                                                                                            Rollout of broadband networks in schools and
                                                        Promotion of terminals in schools and colleges
                                                                                                                              colleges
                        Applications
                         & Services




                                                                        e-Agriculture                                                        ICT for Businesses
     Investment Areas




                                                                         ICT for Education and Lifelong                                                       e-Health



                                                                                         IT for Government Agencies                                                      e-Environment




                                                                    Public Key Infrastructure                                eGovernment infrastructure and interoperability
                                  eGov




                                                                                                          Land and property management
                                                            Government to Employee Portals                                                    Online income tax applications
                                                                                                                     system


                                                      Administration Simplification        Business Tax Management Systems                  Business Community Portals                         e-Social Services



                                                                                Training and skills development associated to           Training and skills development
                                                                                          projects on e-Government                     associated to ICT Apps & Services
                                  HR




                                                                                                                   Training and skills development associated to ICT infrastructure



                                                                Development of Project Management Skills and Certification




                                                                                 Figure 32 – Investment Areas layer of AC Roadmap on Investment Planning in Vietnam




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The roadmap identified the different investments to be carried out the next 15 years from 2010 to
2025 and the preceding relationships between them. The conclusions drawn from the roadmap are
reported in section 6.4.1 of the document. A more extensive detail of the analysis can be found in
sections 6.4.2 through 6.4.5.

6.5.1           Roadmap conclusions
1. The trends which will have the largest impact on the Vietnam’s ICT sector in 2010 would be the
   needed automation of activities as well as the development of the digital generation, thus
   making it necessary to start up investments in e-Agriculture systems and promoting terminals
   in schools and colleges as well as the start on activities regarding ICT for education and
   LifeLong.
      Along with these trends, there will be a growing interest by the Government in the electronic
      management of operations and the use of eGov dedicated primarily to big corporations, as a
      start of future services broadened for all citizens. Investments in administration simplification,
      public key infrastructure and first G2E systems should be strongly enforced to keep up with this
      interest. Business tax management systems will start to help out in the relationships between
      GoV and corporations.
      There is no sufficient knowledge in project management in Vietnam so effort should be placed
      in reaching agreements with foreign institutions for the provision of courses in development of
      project management skills and certification. This will be crucial in Vietnam’s evolution in the ICT
      Sector in subsequent years.
2. Progressive growing demand will be observed in 2015 for mobility as well as the increase in
   the use of ICT to gain efficiency and competitiveness. Enforcement of programs for wireless
   broadband access and the rollout of broadband networks in schools and colleges should be
   carried out previously.
      The eGov, is expected to start its dedication to citizens and its appearance of the first social
      network sites dedicated to corporations, as well as the diffusion of systems for provinces.
      Programs on land and property management systems, business community portals, eGov
      interoperability and development of provincial data centers should be funded in order to aid the
      eGov.
      Finally, programs on training and skills regarding eGov and ICT infrastructure will be needed to
      deal with the development of these areas.
3. Focus in health, security and safety as well as an increased mobile working force is expected
   in 2020. Vietnamese citizens will be expected to be a higher skilled workforce with a greater
   familiarity with ICT systems both at home and at work, thus improving productivity and
   efficiency. The e-Health and e-Environment systems will be clearly enforced as well as ICT for
   business and training and skills development associated with service and applications.
      The extension and popularity of both wireless and wired networks will make it necessary to
      deploy all IP networks nationally, in preparation for the provision of all kinds of traffic and
      services.
      The full extension of ICT use in Vietnamese corporations, including those low value added
      activities as well as the extension of e-Gov for citizens, will influence the proliferation of
      alternative network infrastructures and e-Social Services. Online income tax applications
      replicating those previously implemented for business will be strongly enforced.

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4. 2025 will see the full extension e-Health and e-Environment systems, enforced by both national
   and international regulations and standards.

6.5.2           Investment areas around 2010
a) Society
      »     An increase in the automation of activities will imply the redirection of low cost activities
            through automatic systems. This will make it necessary to start the providing e-Agriculture
            systems.
      »     There will be an increasing interest in entertainment through the Internet, which will stem
            from an increasing number of systems which take advantage of gaming, video over the
            Internet and entertainment applications.
b) Economy
      »     An increase in the deregulation and liberalization of ICT sector will imply the evolution of
            regulation to gain full competitiveness for national investors.
      »     bigger wider degree of international openness is expected to make regulation gain focus on
            how to take advantage of cooperation with international corporations.
c) Politics
      »     Administration is expected to gain a certain interest in the electronic management of
            operations with citizens and corporations. This will imply the extension of electronic tools
            within the Government such as those tools which help out in Administration simplification,
            Public Key Infrastructure and G2E.
      »     There is also some expectation about the increasing role of eGov in orientation to the
            citizens. The first systems to relate Government and corporations are expected to appear in
            full scale with Business tax management systems in use
d) Human Resources
      »     Vietnam is still to receive knowledge from foreign institutions, in the scope of agreements
            for development of ICT in Vietnam and extension of knowledge and technology.
            Development of project management skills and certification should be among the first
            programs to be delivered to address deficiencies in that field.
      »     There is a certain degree of extension and population of the digital generation. The
            universities and schools should be used to facilitate the diffusion of ICT knowledge through
            students. Thus, promotion of terminals in schools and colleges and ICT for education and
            Lifelong should be clearly boosted.

6.5.3           Investment areas around 2015
a) Society
      »     The growing demand for mobility will further increase the interest in mobile devices,
            increased coverage and downsized prices. This will imply the need for wireless broadband
            access.
      »     The extension of coverage to the poorest regions will be a driver of the total complete
            extension of ICT services to all regions.


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      »     The extension of technology and portable devices throughout the citizens will facilitate the
            deployment of integrated devices.
b) Economy
      »     The growing competence in the ICT sector will imply the evolution from openness to
            competence and foreign players to a fully competitive environment.
      »     The increasing investments in Vietnam will require a legislation which allows Vietnam to be
            an attractive environment in which foreign corporations will invest.
      »     The progressive use of ICT to gain efficiency and competitiveness will allow the massive
            introduction of ICT in businesses, colleges and hospital, thus implying the rollout of
            broadband networks in schools and colleges.
c) Politics
      »     eGov oriented to citizens will mark the implementation of the first systems to relate
            government and citizens, land and property management systems.
      »     eGov social networks for corporations will start to appear, with the Government launching
            social network sites for corporations to get along, business community portals and
            eGovernment infrastructure and interoperability.
      »     The use of eGov applied to provinces will have as a consequence the extensive use of
            eGov systems and applications through provinces governments, getting to deployment of
            provincial DCs as well as the training and skills projects on e-Government.
d) Human Resources
      »     The increase of migration fluxes will increase the interchange programs of people from and
            to Vietnam to gain knowledge.
      »     Growing population in cities.
      »     Transfer to industry and services, taking a growing interesting the use of ICT in industry
            and services to gain efficiency and productivity. Training and skills associated to ICT
            infrastructure will be needed.

6.5.4           Investment areas around 2020
a) Society
      »     The increasing concern about health, safety and security will increase the search for
            environmentally compliant devices and networks, thus facilitating the interest in e-Health
            and e-Environment.
      »     The workforce will be increasingly more mobile, implying the need for online working, with
            investments in ICT for businesses and the deployment of all-IP networks.
b) Economy
      »     The full extension of ICT use in Vietnam’s corporations including low value added activities
            will carry as a consequence of the rollout of alternative network infrastructures.
      »     The international expansion of Vietnam corporations will strengthen Vietnamese
            corporations through legislation and taxes in order to facilitate them compete abroad.
c) Politics


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      »     The appearance of social networks is expected through e-Government; in this moment
            these sites will be launched for the sharing of opinions, interest and knowledge, getting to
            the investment in e-Social Services and online income tax applications.
      »     e-Learning in schools and universities will be further extended, thus resulting in increasing
            interest in investment regarding such applications and services.
d) Human Resources
      »     The increasing skills in the workforce will derive in the extensive use of ICTs in businesses
            and corporations to take advantage. Training and skills development associated to ICT
            applications and services will be needed.
      »     There will be a complete development of a knowledge society.

6.5.5           Investment areas around 2025
a) Society
      »     Social life will be completely extended thus getting to the apparition of social life and web
            evolution systems completely deployed.
b) Economy
      »     The extensive use of ICT in e-Environment issues will imply the execution of such systems
            to improve the compliance with environmental aspects, both nationally and internationally
            legislated.
c) Politics
      »     The integration of eGov between provinces will imply sharing of data to gain advantage of
            centralized knowledge and information.
      »     eHealth will be necessary for progressive sharing of sanitary information throughout
            hospitals and medical facilities.
d) Human Resources
      »     An increasing gap is expected between the poor and wealthy.
      »     The population is expected to mature.


6.6             Component 4 - Province Selection Methodology
A pre-selection of 8-10 provinces to be considered for IDA funding will be carried out before the
workshop by the MIC and/or the MPI. This selection will be based on the Ministries working and
direct knowledge of the provinces which is vital for a balanced pre-selection of the provinces with
both the highest capacity for project implementation as well with urgent financial needs for ICT
development.
This component and the methodology proposed here could help the World Bank and the
government of Vietnam in the selection of the 5 provinces that can be considered as the best
candidates for further application of the Investment Framework. It does so through evaluation and
ranking of the 8-10 pre-selected provinces according to the following criteria:




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                 1. Leadership Commitment
                 2. Readiness
     The strength of the leadership commitment is vital for any type of ICT project in Vietnam. The
     provincial leaders can make a huge difference in the success of any ICT venture, especially when
     projects are delayed because of legal ambiguity. Provincial officials can cost projects considerable
     time and money by forcing them to wait until the ambiguity is cleared up by subsequent
     implementing documents or an appeal to central authorities. On the other hand, provinces that are
     creative and clever about working within the confines of central law can be of major assistance to
     private sector firms. Similarly, provinces with a knack for crafting proactive provincial initiatives to
     solve the problems of private firms can have a positive impact on private sector development.
     Three indicators derived from the Provincial Competitiveness Index are proposed for the evaluation
     of leadership commitment in each province. These indicators include:
            »     Knowledge of provincial officials to find opportunities within current legal documents to
                  solve firm problems. This indicator captures how well the provincial leadership operates
                  within the existing legal framework.
            »     Creativeness and intelligence of provincial officials about working within the national law in
                  order to solve the problems of private sector firms. This indicator measures whether the
                  provincial leadership is capable of seeking opportunities or loopholes in the present central
                  law that may aid firm performance.
            »     Quality of initiatives that come from the provincial government. This indicator seeks to
                  gauge the relationship between provincial and central authorities, specifically whether the
                  province is more proactive about assisting the private sector than the central officials.
     The score for this criterion will be derived from the Proactivity Sub-Index20 of the Vietnam
     Provincial Competitiveness Index.
     Readiness of a province examines a province’s readiness through dedication and obligation and is
     evaluated through the quality of the project proposals that have been received and by the
     province’s ranking on the Provincial Competitive Index as well as its ranking on the ICT Readiness
     Index. The quality of the proposals submitted by a province –during this consultancy and especially
     at the workshop- indicates the expertise of the staff in its ICT department and can also be an
     indication of its project management skills. The proposed indexes reflect the expertise of the IT
     staff in the provincial ICT department and the skills possessed by the staff in the department,
     including ICT skills, project management skills and open mindedness.
     Each province is scored on each one of the two criteria and ranked according to their total score21.
     The top 5 provinces will then be selected as candidates for donor agency funding. Figure 33 shows
     the process:




     20
1.        “The Vietnam Provincial Competitiveness Index 2008�, Vietnam, 2008.
     21
          Details on the specific scoring system are TBD.

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                                                                                                                    Input
                                                                                                                   Output
                                         COMPONENT 4 –
                                       PROVINCE SELECTION                                              List of 5
            Province 1                   METHODOLOGY                                                  Selected
               Data                                                                                   Provinces

            Province 2                   Leadership                                                   Province 1
               Data                     Commitment
            Province 3                                                                                Province 2
               Data                                                                 Ranking
                                          Readiness                                                   Province 3

                   …
                                                                                                      Province 4
          Province 8/10
              Data                                                                                    Province 5

                                          Vietnam Provincial
                                                                                     Vietnam ICT
                                          Competitiveness
                                                                                   Readiness Index
                                                Index

                                                         Figure 33 - Province Selection Methodology




6.7             Component 5 - Project Assessment Guidelines
This component outlines a set of proposed guidelines –based on international best practices- for
the assessment of projects that are submitted for donor financing under the umbrella of the
Investment Framework, categorized along the 4 broad categories introduced in the Investment
Areas.
This proposed set of guidelines can be considered as a set of recommendations for the World
Bank regarding “how to assess� individual projects that could be submitted for financing, and for
the provinces on “how to shape� their proposals for a better likelihood of success.
This component also includes a proposed Project Proposal Template to be used by provinces in
order to properly describe their proposals for further assessment and evaluation by International
Donor Agencies.
Along with the guidelines included below, Atos Consulting counts on a database of international
best practices, collected from similar ICT project implementations in developing countries (attached
in Annex C). It is important to note that experiences, around the world, have proven that the
increased access in ICT have had a positive impact on information accessibility, enabling informed
decision-making in all sectors and thus improving overall productivity. Nevertheless, worldwide ICT
projects have shown varying level of success, mainly depending on the nature of the project
undertaken, and the way it has been conducted. As a result, it is crucial for all Vietnamese ICT
investments to capitalize from past / current experiences in order to follow best practices and
reduce risks of failure.
The following set of best practices can be divided in two sets: some general best practices related
to aspects on project planning and implementation, which apply to all the different categories or


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areas of investment, and some more specific which should be analyzed when discussing each type
of project, as seen in Figure 34.

                                                                   PROJECT PLANNING AND IMPLEMENTATION



      Local Assistance to Project                                                                                   Business Sustainability Post
                                               Project Planning                 Market Research on Target                                                   Detailed Time Frame
               Partner                                                                                                   Implementation

                                           Implementation Phase and                                                                                    Contradicting strategies between
       Sustainability of Project                                                 Communication Strategy               Detailed Cost Structure
                                             Change Management                                                                                                    initiatives



          ICT INFRASTRUCTURE                      ICT APPLICATIONS AND SERVICES                             E-GOVERNMENT                        HUMAN CAPACITY AND RESOURCES


             Feasibility Study

        Selection of Local Partners

                Site Survey                             Management contracts                              Demand identification

          Financial Sustainability                           Target groups                        Citizen or business centric vision               Skills, development and training

           Technology Selection                          Existing technologies                               Available staff                             Maintenance of skills

              Network Design                             Financial sustainability                              Awareness                                    Certifications

          Vendors and equipment                            Clear set of goals                             Process simplification                   Match with local job market needs

           Training and Hand-off                             Incorporation                                        KPIs                              Adaptability of human capacity

           Existing infrastructure                         Risk Management                                  Risk Management

       Evaluation of external factors                                                                         Cooperation

   Analysis of Technological Environment

          Creation of Partnerships



                                                      Figure 34 - Summary of Project Assessment Guidelines



6.7.1            Project Planning and Implementation
      1. Local assistance to project partner. Projects proposal must provide a detail specification
         of the tools used to provide local assistance to project partners. A key project need is to
         build local assistance partnerships which can help and guide through implementation and
         operation problems.
      2. Sustainability of project. The sustainability of the project post-implementation should be
         assessed in the project proposal. The project should not get to situations in which after
         overcoming the majority of challenges over the life of the project, its sustainability should be
         affected by any kind of issues or factors.
      3. Project planning. As any development project, a successful ICT project should have clear
         objectives, clearly identified target groups and realistic plans for implementation.
      4. Implementation phase & change management. ICT projects require an adaptation phase
         from the target group. ICT projects proposal must take it into consideration in their
         implementation phase. The projects must gain support, commitment and involvement of
         agents affected.
      5. Market research on target groups. Research should be carried out on target groups,
         especially in the case of product / service selling. Typical research should include: buying
         trends, purchasing power, level of debts, etc. Before handing devices or services to target
         groups it should be analyzed if they can afford them.




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      6. Communication strategy. Project plans need to include a plan for internal & external
         communication to ensure the adherence of the different parties. Communications Plans
         should be arranged so as to insure full comprehension of the project plan & objectives by
         project actors.
      7. Business sustainability post implementation. Projects need to provide a detail post
         implementation business plan to ensure business sustainability. Post implementation can
         vary significantly the revenues stream and financing method from the one used to build up
         the project.
      8. Detailed cost structure. A detailed cost structure needs to be provided as insure the best
         possible cost estimation.
      9. Detailed time frame. A detailed schedule for the project should be provided.
      10. Contradicting strategies between initiatives. Need to insure that no two initiatives will
          conflict.

6.7.2           ICT Infrastructure
      1. Feasibility study - A feasibility study needs to be carried out by the Administration to
         determine the institutional capability including the manner in which ICTs are implemented.
         Projects should take this into consideration.
      2. Selection of local partners - For PPP/MSP arrangements, is critically important the
         selection of the adequate local partner in Vietnam and the definition of the appropriate
         terms in the contract. This step, usually regarded as critical in any PPP/MSP project,
         acquires higher relevance in Vietnam’s case. A careful selection of the local partner and
         compliance with network government expected deployment must be encouraged.
      3. Site survey - In any of the different cases of infrastructure rollout a careful study of the
         extension and beneficiaries of the network should be performed. Statistics on
         telecommunications use or number of schools connected to the internet in a certain area
         should be performed and studied carefully before carrying on to the next step.
      4. Financial sustainability - Financial sustainability is a challenge for ICT-for-development
         initiatives. While many projects include mechanisms for cost-recovery, most find it difficult
         to generate sufficient income to become financially self-sustaining. These kind of initiatives
         should pursue social and economic profitability as two of the main criteria before
         implementing them
      5. Technology selection - This step is subsequent to the previous one. It is advised the
         selection of a partner with certain experience in the use and interoperability of different
         fixed, mobile and broadband technologies so as to be able to select the one best fitting in
         the strategy of the service to deploy. It is very important to select the technology on the
         base of the service aimed to provide, not the other way around. The members of the
         partnership should be precluded of any technology bias.
      6. Network design – In Vietnam’s case it is expected to find severe restrictions in this
         subject. Given this, there will have to be a constant feedback between the partners. It would
         be quite advisable that the local partner had a certain relationship with government officials
         so as to help the partnership refine the extent of the network.




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      7. Vendors and equipment - Another of the relevant elements of any of these projects
         should be obtaining the equipment at a cost which lets the project be financially viable. The
         proximity of different Asian vendors and the establishment of partnerships should be
         another aim and good practice to preserve.
      8. Training and Hand-Off – In Vietnam’s case there is a great possibility of having
         partnerships in which the foreign part leaves after a certain time. Given this, a very crucial
         aspect so as to guarantee the success of the initiative is that there must be a solid transfer
         of knowledge to the people who are to continue with the operation and exploitation of the
         different networks and infrastructure to be installed. This is addressed, generally, as the
         most important aspect in any of these kinds of investments.
      9. Existing infrastructure – ICT development projects need to build on existing systems or
         work in a participatory way so as to achieve local ownership. Past ICT projects have
         pointed out the importance on building on existing systems instead of introducing new ones
         and undermining the ways people currently receive information.
      10. Evaluation of external factors – External factors such as the level of local crimes that
          could potentially harm the project development needs to be evaluated. An example would
          be initial experiments that were carried out with copper telephone cables that did not
          succeed due to the fact that they were stolen. Satellite phones and laptop computers need
          to be kept in secure facilities. Another external factor that needs to be evaluated is the
          reliability of the power. Should there not be a consistent flow in power; a suitable alternative
          power generator needs to be found for the maintenance of data centers so as to maintain
          computerized data such as health data intact.
      11. Analysis of technological environment – The lack of local telecommunications
          infrastructure can be one of the most difficult challenges to overcome especially for
          developing countries. This can be overcome through the analysis of telecommunications
          and IT infrastructure deficiencies to plan for realistic measures and adopting innovative
          technologies such as WiMax or other wireless connectivity projects. It also can be done
          through the development of more accessible devices.
      12. Creation of partnerships – It is important to create partnerships with public and private
          institutional infrastructures. It is essential to build on existing formal and non-formal local
          organizations and communication networks.

6.7.3           ICT Applications & Services
      1. Management Contracts - In Vietnam’s case, because of matters of regulation, the best
         practices should encourage the search of management contracts as the way to bring
         external knowledge and expertise. There should always be a local partner which takes care
         of the possible deployment infrastructure needed. The local partner should be the one
         reaching agreements with the Government, if needed, to build up infrastructure aligned to
         government’s requirements.
      2. Target groups - Involve target groups in project design and monitoring. The participation of
         these groups makes them feel part of the different objectives of the projects in this area and
         makes it easier to address problems and difficulties which may appear along its realization.
         This also makes the understanding of the local social sphere easier which is important
         when designing an ICT application or service.



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      3. Existing technologies - When choosing the technology for a project, pay particular
         attention to infrastructure requirements, local availability, training requirements, and
         technical challenges. Simpler technology often produces better results. Existing
         technologies can often convey information less expensively, in local languages, and to
         larger numbers of people than can newer technologies. Projects must carefully assess the
         ICT technology used, in terms of the costs generated with the benefits provided.
      4. Financial sustainability - Financial sustainability is a challenge for ICT-for-development
         initiatives. While many projects include mechanisms for cost-recovery, most find it difficult
         to generate sufficient income to become financially self-sustaining. These kind of initiatives
         should pursue social and economic profitability as two of the main criteria before
         implementing them. The reliability of the sponsors should also be assessed so as to avoid
         funding problems brought about by the cessation of financial support.
      5. Clear set of goals - A clear set of goals should drive the development of software systems
         and applications, rather than just the creation of these applications for common use. This
         will enable better project planning which must incorporate monitoring, evaluation and
         impact assessment components, while ensuring at the same time that these components
         are implemented
      6. Incorporation into existing programs – ICT projects should be incorporated into existing
         programs rather than de developed and maintained as separate projects.
      7. Risk Management – Studies have concluded that the larger the IT project, the more likely
         the failure. This highlights the necessity to carry out pilot testing prior to a full scale
         implementation on the importance of change management and on the need for building on
         existing systems.

6.7.4           E-Government
      1. Demand identification - Successful e-Government projects can only occur when they are
         based on real demand from businesses and/or citizens.
      2. Citizen- (or business) centric vision – Project proposals should be based on a vision that
         is centered on citizens and/or businesses and not on technology or the government itself.
      3. Available staff - Technology and management departments with sufficient and properly
         trained staff for supporting e-Government initiatives should be present
      4. Awareness - Awareness is a very important part of e-Government, without which would fail
         to draw sufficient users. Projects should be accompanied by a clear explanation of how
         awareness will be developed.
      5. Process simplification - Clarification and simplification of processes is a very important
         driver to motivate citizens to adopt e-Government applications and services. Project
         proposals should clearly explain what processes are involved and how simplification is
         obtained
      6. KPIs – Project proposals should set overall performance criteria as well as benchmarks to
         evaluate progress
      7. Risk management – There are many risks directly related to e-government projects. The
         first is that there is a low rate of success for each project with many projects having a low
         benefit/cost ratio. A minority of the projects are successes.


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      8. Cooperation – Cooperation is necessary between the local government and the citizens.
         This is especially important because authorization is required from the local government for
         any e-government project. The government will only cooperate if they feel that the project
         will empower them. The environment should always be surveyed to recognize the existing
         power relationships and strong relationships should be developed where possible.

6.7.5           Human Capacity & Resources
      1. Skills development & training component – Every project proposal should include a
         component on skills development and training, especially if a PPP/MSP arrangement is
         proposed, in order to ensure proper transfer of knowledge and development of skills in local
         staff.
      2. Maintenance of skills - Skills learnt should also be maintained with refresher’s courses
         when necessary.
      3. Certifications – Whenever possible, proposed projects should be accompanied by a
         component for development of certifications –as applicable depending on the type of
         project-
      4. Match with local job market needs – Projects that focus on ICT training should include a
         job placement component that ensures that skills training responds to local job market
         needs
      5. Adaptability of human capacity - It is necessary to estimate the level of adaptability of the
         different participants so as to be able to be prepared to deal with their carrying abilities to
         adapt to new environments.
Figures 35 through 39 show the analysis of the different risks described in this section given their
probability of occurrence and impact to the project in that case. This way, the biggest risks can be
detected easily.
Risks have been classified in different level areas depending on their impact and probability. The
greatest the impact of the risk and its probability, the darker the area the risk is included in.
      »     All the projects must include a designed set of actions to address and solve those risks
            placed in the highest impact and probability area.
      »     The set of actions for less important risks will be used along other descriptive elements of
            the project to qualify its capacity to address problems which may surge during its realization
Annex J shows the most relevant risks found from these Risks Matrixes and try to propose the
different solutions and mitigation actions to be proposed against them. The structure of the
descriptions of the risks is as follows:
      »     Consequences. Different consequences related to not addressing correctly the risk.
      »     Mitigation actions to take. A detailed list of actions which are designed to address the risk
            and mitigate its effect.
      »     Vietnam’s applicability. Detailed description of, if any, special characteristics and
            applicability in Vietnam’s case.
      »     Project type scope. Checklist of the different kind of projects affected by the risks and which
            need the mitigation actions to be implemented.



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                                                                                   Figure 35 - Project Planning and Implementation Risks Matrix




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                                                                                   Table 7 - Project Planning and Implementation Risks Impact and Probability




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                                                                                   Figure 36 - Network & IT Infrastructure Risks Matrix




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                      Risk                                               Impact to the Project                                                                 Probability
                                                 »    The impact of errors in the feasibility phase are moderate                  »   Most of the problems usually appear on implementation phase and
                Feasibility study                     depending on the matter on which the errors appear: reliability,                not so many of them in the phase designed to determined their
                                                      profitability or market analysis                                                feasibility of implementation
                                                 »    It is crucial in a partnership project to be able to select and follow on   »   Most of the problems in these project surge from errors on the
          Selection of local partners                 the activity with the adequate local partners. Their actions is the             relationships between local and foreign partners due culture,
                                                      difference between the success or failure of the project                        language or aims differences
                                                 »    Making mistakes in the survey of the placement to deploy the                »   Technical analysis is usually carried out in collaboration with the
                   Site survey                        infrastructure is quite an important error as the technology selected           local partners, experience on this kind of projects shows it is not the
                                                      could not be the most appropriate for the matter                                most usual issue to be addressed
                                                 »    The impact to the project if errors in the determination of financial       »   Not achieving financial sustainability is quite a common error which
             Financial sustainability                 sustainability are made usually focus on the subsistence of                     appears on this projects as their focus mainly on the provision of
                                                      networks after the end of the implementation phase                              service and not the subsistence after the end of project
                                                 »    Not finding the adequate technology is an error which usually
                                                                                                                                  »   This is not the most usual nor the least common of errors in these
             Technology selection                     affects the profitability of the project or the extension of the network
                                                                                                                                      projects, as experience shows
                                                      implemented amidst users
                                                 »    The design of the network has a moderate impact to the project as it        »   It is quite common to understand after the end of the projects some
                 Network design                       is not the most visible part of it to the users who expect a                    possible modifications or variations in the network design which
                                                      determined service to be delivered                                              could have reduced project costs
                                                 »    Finding the appropriate vendors who establish good conditions is a          »   It is quite probable to be able to gain support from some vendors to
            Vendors and equipment                     subsequent phase to any implementation project which does not                   deploy devices; however, their continued prize reductions make
                                                      always have a great impact on its evolution                                     them more accessible to users and clients
                                                 »    Being able to establish an appropriate transition of knowledge and          »   Many problems have been reported to appear in this phase as it is
             Training and hand-off                    responsibilities to local partners at the end of the project is a very          quite extended their inappropriate ending due to lack of time,
                                                      important step to ensure its feasibility in the long term                       budget or human resources
                                                 »    Being able to take advantage of the present infrastructure is more of       »   It is quite usual that projects on IT infrastructure tend to concentrate
             Existing infrastructure                  a positive than a negative impact if not achieved that possibility; the         on the generation of new infrastructure rather than improving the
                                                      impact is, thus, reduced                                                        existent one
                                                 »    Not being able to determine correctly which other factors, not              »   Generally, problems on these projects don’t appear on this phase of
        Evaluation of external factors                technological, are going to have an impact on the project is usually            determination of factors. Other aspects have been shown to
                                                      a source of mistakes, risks and problems                                        generate the most issues
                                                 »    Being able to evaluate correctly the different technologies and             »   History shows that the most important factor to be analyzed when
           Analysis of technological
                                                      detect the most relevant for the purposes of the project is usually             trying to select the technology is its fitting with users interests and
                 environment
                                                      more a positive impact than a negative one                                      feasibility
                                                                                                                                  »   The success rate on selecting the appropriate partners is relatively
                                                 »    Being able to create the adequate partnership with the appropriate
            Creation of partnerships                                                                                                  high; problems usually appear on implementation phase rather than
                                                      members is usually a main issue
                                                                                                                                      adequacy of players

                                                                                       Table 8 - Network & IT Infrastructure Risks Impact and Probability


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                                                                                   Figure 37 - ICT Applications and Services Risks Matrix




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                                                                                   Table 9 - ICT Applications and Services Risks Impact and Probability




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                                                                                   Figure 38 - eGovernment Risks Matrix




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                                                                                   Table 10 - eGovernment Risks Impact and Probability




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                                                                                   Figure 39 - Human Capacity & Resources Risks Matrix




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                                                                                   Table 11 – Human Capacity & Resources Risks Impact and Probability




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6.8             International Lessons – Implications for Vietnam
This subsection, which works as an addendum to component 5 of the Investment Framework, aims
to show and introduce several international lessons derived from past experience by Atos
Consulting in several appointments regarding international investment in developing projects.
These lessons can be divided in those which are applicable in any kind of project regarding ICT
investment and other lessons which are specific to a concrete variety of projects.
»     Lessons which apply to all kind of projects
    1. Improve project design
    2. Adopt integrated planning
    3. Plan for monitoring and evaluation
    4. Adopt enhanced project management for ICT projects
    5. Design carefully partnership (PPP/MSP) structure, bidding process and contract provisions
»     Lessons which apply to specific projects
    6. Design for financial sustainability
    7. Identify demand
    8. Raise awareness and promote usage
    9. Plan for transition to new systems
    10. Always include training for staff and users
These lessons are shown in figures 40 and 41, and further explained in detail in sections 6.8.1
through 6.8.10.




                                           Figure 40 - Lessons from international experience – All projects




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                                  Figure 41 - Lessons from international experience - Specific types of projects



6.8.1           Improve project design
a) What should be done:
         » Generate Investment Sequencing
         » Obtain ICT project design expertise at early stage (to develop plans with clear objectives,
           clearly identified target groups and realistic implementation plans)
         » Develop trends evaluation and impact assessment
b) Consequences (if not considered):
         » Windows of opportunities missed
         » Relevant people leaving
         » Loss of relevance of policy papers
         » Substantial changes required in projects and programs
c) Possible application in Vietnam:
         » Develop sequencing to define precedence among projects
         » Setup an ICT investment expert resource center (provided by or sponsored by MIC)
         » Collaborate with international firm for trends forecasting

6.8.2           Adopt integrated planning among different project partners
a) What should be done:
         » Setup Program Steering Committee
         » Require potential synergies and collaboration to be included in project design
         » Develop mix of project-specific and general staff
b) Consequences (if not considered):
         » Lack of global vision in the program


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         » No synergies obtained from various projects
         » No sharing of experience for next projects
         » No sharing of intellectual capital among projects
c) Possible application in Vietnam:
         » Involve all project partners & stakeholders in the project planning & design phase
         » Request description of appropriate synergies before starting projects

6.8.3           Plan for Monitoring and Evaluation (M&E)
a) What should be done:
         » Project design and planning should include M&E tasks
         » Provision up to 10% of the project budget for M&E
         » Separate between inception phase, implementation phase, and M&E staff to guarantee
           independence
b) Consequences (if not considered):
         » Lack of integration of M&E in the project design
         » Lack of independence between M&E professionals and the rest of the team
         » Insufficient budget for M&E tasks
c) Possible application in Vietnam:
         » Plan start and duration of M&E tasks
         » Have specialized staff dedicated to M&E
         » Let M&E staff take part early on in the design phase (before inception or implementation)
         » Consider budgetary needs regarding M&E

6.8.4           Adopt enhanced project management
a) What should be done:
         » Employ people with solid PM skills (certification)
         » Deploy tools for the control, reporting and evaluation of projects and program
b) Consequences (if not considered):
         » Delays in the program
         » Lack of coordination between projects
         » No compliance with budget plan
         » Lack of communication between stakeholders
c) Possible application in Vietnam:
         » Increase the resources for training & certification in Project Management
         » Acquisition of advance knowledge and tools for Project Management
         » Monthly meetings at program level and weekly control of projects




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6.8.5         Design carefully partnership structure, bidding process and contract
            provisions
a) What should be done:
         » Find appropriate partners to provide local knowledge, managerial, commercial and
           technical capacity
         » Build trust among all stakeholders
         » Develop appropriate bidding process and contractual terms (responsibilities, ownership,
           etc.)
b) Consequences (if not considered):
         » Denial of responsibilities
         » No possibility of establishing alliances
         » Lack of technical and commercial competences and capabilities
c) Possible application in Vietnam:
         » Use a risk mitigation checklist for projects that could use PPPs/MSPs
         » Great clarity should be enforced in the contractual terms of PPP/MSP arrangements
         » Setting up experience-sharing and hands-on workshops to contribute to knowledge
           sharing and building trust among the various stakeholders in PPPs/MSPs

6.8.6           Design for financial sustainability
a) What should be done:
         » Require clear definition of business case
         » Marketing plan and revenues stream should be defined in any project proposal
b) Consequences (if not considered):
         » Projects usually focused on delivery and not on profitability
         » No possibility of continuity of the operation of networks
         » Loss of interest of foreign stakeholders to further invest
c) Possible application in Vietnam:
         » Develop joint studies between Vietnam’s public sector, private sector and international
           donor agencies and companies to evaluate this factor in critical projects
         » Establish clear contractual prescription of, if any, government help
         » Develop replacement formulas to improve interest of citizens and users

6.8.7           Identify demand
a) What should be done:
         » Require technical feasibility analysis
         » Develop specifications description in collaboration with users / citizens
         » Develop pilot programs to understand and identify needs of lead users
b) Consequences (if not considered):
         » Offering not demanded applications, leading to their under utilization


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         » Proposal of complicated applications, beyond the needs of users and citizens
c) Possible application in Vietnam:
         » Benchmark successful initiatives in provinces
         » Services dedicated to corporations could be used as pilots before the extension to the
           mass of citizens

6.8.8           Raise awareness and promote usage
a) What should be done:
         » Communication campaigns to approach citizens
         » Local/regional pilots
         » Placement of terminals in official places to get citizens accustomed to the use of new
           technologies and services
b) Consequences (if not considered):
         » Citizens not having knowledge of available applications
         » Misuse of services provided by the Government
         » No relationship between Government and citizens to improve, modify and adapt
           applications
c) Possible application in Vietnam:
         » Successes in some provinces should be strongly publicized
         » Develop and foster the visibility of provincial web portals, and let citizens familiarize with
           the new environment

6.8.9           Plan for transition to new systems
a) What should be done:
         » Build hybrid local-international teams during implementation to ease knowledge transfer
         » After the project, continue the communication between stakeholders
         » Develop training for local workers and staff
b) Consequences (if not considered):
         » Lack of knowledge in local staff to utilize the infrastructure or service
         » No continuity of delivery of service to citizens or users
         » Lack of maintenance and operation of the service
c) Possible application in Vietnam:
         » Establish agreements with foreign partners assigning budget to training and hand-over
         » Prepare for progressive hand-over and increasing responsibility of the local team

6.8.10 Always include training for staff and users
a) What should be done:
         » Develop skills development & training programs for staff and end users by:
                            o     Universities



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                            o     Private institutions
                            o     International donor agencies
b) Consequences (if not considered):
         » Lack of managerial capabilities
         » Lack of technical capabilities
         » Lack of commercial capabilities
c) Possible application in Vietnam:
         » Transfer of technical and management knowledge should be encouraged
         » Promote education and training in managerial capabilities in the provinces
         » A central venue to share experiences across people from the provinces could be very
           useful


6.9             Risk Mitigation Actions
From international experience, several lessons have been learnt from the most usual (and critical)
errors when addressing ICT projects. Those lessons can be found in section 6.8. So as to gain
advantage from that experience, the template in any project proposal should include a proposed
set of actions to be pre-designed against those risks.
Tables 12 and 13 demonstrate different sets of actions which must be defined in order to have a
complete project template. No project should enter the prioritization phase without the appropriate
and clear definition of the actions defined to assess the most important risks detected from
previous experience.




                                                          Table 12 - Risk Assessment - All projects




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                                                       Table 13 - Risk Assessment - Specific projects




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7               Implementation Planning

7.1             Introduction
This final section focuses on the different aspects regarding the selection and implementation of
concrete projects as well as how to apply and connect the Investment Framework, as detailed in
section 6 as an input to this stage in which individual projects proposed by the different provinces
must be funded.
While section 6 (Investment Framework) proposed a set of investments areas to be addressed in
Vietnam over the next few years, the financing structure they should adopt and the timeliness of
the investments, this section tries to address the importance and relevance of the requisites which
must be provided for the definition, screening and selection of projects to be funded.
To allow this, the section starts with the definition of the whole process. Thereafter, it describes the
project template so as to characterize the different project proposals the provinces send for their
correspondent filtering and selection.
There is a subsection for references with regards to risks, their assessment and mitigation actions.
The chapter also hands out some tentative criteria for the screening and subsequent prioritization
of projects to be funded. Those criteria are not mandatory and a subset or a extension of them
could be used.
Finally, some advises regarding regulatory environment, management policies and a set of actions
for the better success of the Investment Program in the Vietnamese provinces.


7.2             Application of the Investment Framework
The implementation planning acts as a previous step of the Investment Framework and decides
the projects to finance in the selected provinces. The expected process is described in Figure 42:
      a) Province selection. Following the criteria detailed in section 6.4 of this document
      b) Collect project proposals. A tentative template to describe the projects is presented in
         section 7.3 of this document (Figure 43). This step allows for the uniform description of the
         projects to be funded and helps out to compare, select and reject propositions.
      c) Evaluate project proposals. This step, also named project screening, aims to detect
         projects which do not comply with the requisites implied by the MIC and do not fit into the
         investment categories pursued by potential International Donor Agencies. These projects
         will not make it to the next phase of the process.
      d) Select projects. The project prioritization is carried out as the last phase of the process.
         This step allows for the comparison of all the projects which have been validated by the
         screening phase and the selection of those which best fit with the Investment Framework
         and which best comply with the requirements described by funding institutions and
         provincial governments.




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                                                   Figure 42 - Application of the Investment Framework




7.3             Template for Project Proposals
We propose that the template described in Figure 43 be used by provinces to describe their
proposed projects. The project proposals should be described along four dimensions to help in the
subsequent application of screening and prioritization criteria:
1. Context and Background
       »     Project name and description
       »     Expected benefits
       »     Target population
       »     Lessons learnt from previous experiences
2. Scope and Objectives
       »     Project Scope
       »     Project Objectives
       »     Expected Outcomes
3. Plan and Financing
       »     Preliminary Project Plan and Schedule
       »     Estimated Budget
       »     Proposed Investment Model and Financing Plan
4. Institutional Arrangements
       »     Implementing Agency Management and Staff

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       »     Quality Control
       »     Monitoring and Evaluation
       »     Project Management Technical Assistance
5. Risk Assessment




                                                                   Figure 43 - Project Template




7.4             International lessons and risk mitigation actions
Regarding international lessons and risk mitigation, please refer to sections 6.8 and 6.9 of this
report. These risks have been obtained from international projects and allow for the preparation
and definition of the assessment actions which must be addressed in any project proposal sent by
the provinces as one of the criteria for screening, as shown in Figure 43.


7.5             Criteria for project screening
The screening phase aims to determine which projects do comply with the specifications required
by the GoV and the provinces so as to follow up the process and be prioritized in the next step.
Some criteria are applied in this step:
      a) Alignment with GoV and provincial ICT plans. The projects funded must fit in the different
         categories to be financed and funded by International Donor Agencies. Restrictions on
         investment category and time of application (derived from the Roadmap) should be applied.
      b) Evaluation of project risks. Depending on the area which the project is classified in, it will
         have to address the risks derived from its kind. This way, projects should address the
         criteria specified in section 7.5 of the document. The importance of addressing the risks in a

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            comprehensive manner is absolutely relevant to ensure the reduction of the failure
            probability.
      c) Leadership commitment. All projects should be appropriately sponsored and strong
         commitment and compromise will be necessary to assert its impact and importance.
         Metrics such as the previous percentage of completion of ICT projects should be
         considered as well.
These criteria are basic drivers to ensure the feasibility of any project within minimal levels of
acceptability. These are criteria not designed to prioritize projects but instead to distinguish
between those which could be implementable in the context of an international financed project in
Vietnam
Any project without the adequate levels of alignment with the global program, risks assessment or
compromise will not be evaluated in the next stage, which intends to classify the projects to receive
the funding.
A description of items to be checked for each of these criteria is found in Table 14.




                                                              Table 14 - Project Screening Criteria




7.6             Criteria for project sequencing and prioritization
The prioritization phase aims to determine which specific projects are going to be funded. After the
screening phase, projects not complying with certain criteria will be eliminated and projects which
are going to be funded and financed will be prioritized. Some additional criteria will be applied in
this step:
1. Profitability
       »     Sustainability after implementation
       »     Affordability by citizens and users


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2. Technical and Commercial Feasibility
       »     Technical feasibility
       »     Marketing and communication plan
3. Non financial Outcomes
       »     Extension of ICT use in citizens
       »     Gains for strategic sectors in Vietnam’s economy
4. Synergies
       »     Synergies between projects in different provinces
       »     Synergies between projects in a certain province
5. Fit in Vietnam’s Industry
       »     Available private participants from Vietnam
       »     Available participation of colleges and teaching institutions from Vietnam
6. Knowledge transferability
       »     Feasibility of a training plan for users
       »     Feasibility of a training plan for application managers
7. Inputs needed
       »     Money needed to raise to fund the project
       »     Human Resources needed for the project
8. Fit in Investment Framework
       »     Fit in a category investment in the framework
       »     Fit in the Roadmap (moment of investment)
These criteria and their sub-criteria aim to cover the different aspects which are going to determine
the projects to be financed, as described in Figure 44.
A project is not dependant on just one characteristic which should be examined to best determine if
it should be funded. These criteria try to:
       »     Evaluate financial and non financial objectives,
       »     Determine feasibility
       »     Gain advantage from synergies
       »     Strengthen ICT Industry in Vietnam
       »     Determine the possibilities to transfer knowledge if it is not found in Vietnam
       »     Evaluate the inputs needed (the lesser the inputs, the lower the risks) and
       »     Their fit in the Investment Framework proposed in Section 6.




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                                              Figure 44 – Criteria for project sequencing and prioritization




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8               Set of recommendations

1. Evolution of regulatory environment to facilitate the creation of PPPs
      One of the main needs of Vietnam’s ICT sector is to allow the progressive entrance of foreign
      players for knowledge diffusion and competition. Increased competition will result in favorable
      conditions for the access to technology and connectivity by the Vietnamese people and
      corporations and henceforth lead to a subsequent increase in productivity.
      Current Vietnamese conditions establish a quota of Vietnamese stakeholders required to be
      present in any corporations, as it was shown in chapter 5 of this document. Those conditions
      should be modified so as to stimulate investment and reduce the risk for the interested party.
      This evolution should be progressive and extend to all kinds of cooperation including BOOs
      and BOTs. The progressive modification of present regulations would alleviate the impact of
      increasing foreign competition.
      Investment schemes should involve long term open concessions by the GoV of new
      telecommunications licenses open to foreign corporations.
2. Facilitate the investment schemes which include other partners like MSPs
      As well as facilitating the deployment of PPPs through regulation, it would be useful to enforce
      the use of more complex collaboration schemes as MSPs. The cooperation between
      Governments, large corporations, civil society and international organizations usually results in
      the clear definition of objectives, the ability to address and select appropriate resources and the
      sharing of positive experiences as well as lessons learnt.
      In a provincial programme, certain actions should be taken so as to ensure its success. This
      includes the replication of projects and the subsequent dialogue between provinces, the
      participation of devices vendors and the implication of civil society as well as facilitating the
      applications and systems diffusion.
3. Set up a National ICT Advisory Board to assist provinces in the design of ICT projects
      As there is a clear lack of knowledge and experience in the design and management of ICT
      projects, the establishment of an advisory board of experts would be strongly recommended. In
      this board, design assistance will be offered, including the monitoring and evaluation of tasks
      as well as subsequent project management. It would work as a consultation branch for the
      provinces during project management, with the objective of assistance in the resolution of
      situations which could impact or deviate the project.
      Its role would have to be diminished with time as the Vietnamese managers become
      increasingly knowledgeable and proficient in the design and management of ICT projects.
4. Set up a national training center to increase expertise in project/program management
      The most urgent step to be addressed by the GoV is the creation of a national training center to
      diffuse knowledge in the design, monitoring, evaluation and management of projects for
      Vietnamese professionals.
      This center could be set up as a separate institution or be offered in an existing university or
      higher education centre. If more than one center was to be established, interprovincial


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      programs that allow the exchange of experiences and create a common national knowledge in
      the field should be enforced.
5. Use external consultants in cooperation with local partners for the design and management of
   projects
      Over the next few years, international consultants and workers should play an important role in
      the success of projects co-funded by international donors and Vietnamese corporations. Their
      main task will be the appropriate implementation of applications, systems and infrastructure.
      Another critical aim which should be enforced is the sharing of knowledge, whether technical or
      managerial.
      The use of these external consultants would increase the importance of the pass down phase
      where they hand the project over to be managed by local staff. This is a mandatory step that is
      clearly defined and prepared so as to ensure that expertise and knowledge remains within the
      country and the risk of mismanagement for the project is avoided.
6. Use external, international firms to assist in the detection and evaluation of trends (PEST)
      The continuous evaluation of Political, Social, Economical and Technological drivers is a
      relevant source of knowledge and a decision instrument when addressing the needs and
      interests of citizens and users.
      External and international consultancies, in cooperation with local workers, could assist in the
      identification of the drivers and the diffusion of knowledge and know-how to facilitate the
      realization of the PEST evaluations in the long term by Vietnamese staff.
7. Encourage the development of integrated provincial portals for eGovernment applications
      One of the most important aspects that helps the massive popularization of eGovernment
      systems is the simplicity of its use. The creation of a single portal per province which
      centralizes and links all applications should be a mandatory step.
      Citizens are not comfortable and tend to disregard the use of electronic applications if they are
      deemed too complex or if they have many different sites and systems have to be navigated in
      order to access the application required. Generating an integrated portal would address this
      problem and ensure a better success rate for eGov applications.
8. Facilitate the use and extension of project management applications
      The provision of systems is as important as the diffusion the knowledge to manage and correct
      projects. It is, therefore, equally critical to provide managers with the appropriate set of tools
      (proprietary or customised) as well as training programs to prepare those professionals for the
      efficient use of those tools.
      Before starting with the training programs, the appropriate tools should be determined so as to
      be able to provide an integrated course which covers both theoretical skills as well as practical
      application, demonstrated through the use of management applications. Staff will therefore be
      prepared to use these applications to their fullest potential and it will facilitate knowledge
      transfer for management and software tools designed for it.
9. Encourage the deployment of terminals by reaching agreements with devices vendors and
   subsidizing the acquisition of devices for personal use




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      A common factor for the success of network, services and applications deployment for the less
      advantaged classes is through agreements with vendors for the acquisition of devices in
      favorable conditions
      Governments could help in the acquisition of these devices through partial subsidies or through
      the provision of low interest loans to citizens and users.
10. Use of pilot project experiences in selected provinces related to eGov initiatives
      The use of pilot projects has been deemed to be critical in the success of eGov initiatives as it
      helps the early recognition of weaknesses and strengths of the related applications and
      systems. Early users and testers should be surveyed so as to quickly address common user
      needs .
      Also, in a provincial program, monitoring the success of certain initiatives helps in their
      replication in other provinces and the extension of their use nationally, in the possible future.




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                                                                      Annexes




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     Annex A – Data Collected of Proposed ICT Projects from Provinces
Thainguyen

No. of                                                                 Budget           Duration   Key characteristics
                           Title of Project                                                                                     Responsible party
Project                                                            (Millions VND)        (mths)      and features
1
              Developing NGN network

2             Widening local network
              Upgrading, widening, installing
3
              fibre optic network
              Universalizing telephone for
4
              rural areas
              Universalizing internet for rural
5
              areas
              Developing mobile phone
6
              network
              Installing multiservice
              Metropolitan Area Network
7
              (MAN) under ring circuit based
              on national subscriber line TSL
              Installing, upgrading, improving
8             LAN in state-owned agency
              offices
              Plan for building data store for
9             personnel, land and
              organisation management

              Developing specialised software
12
              and database for organisations

              Computerization of offices (e-
13
              Government)


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              Computerization in Office of
              People's committee and in
14
              Provincial Office of People's
              committee of the Party
              Information portal of
15
              Thainguyen

              Subprojects in building online
16            administrative services targeting
              people and organizations
              Building, upgrading websites for
              organizations (integrated in
17            provincial information portal),
              annually digitalizing information
              for websites
              Training work force for building
18
              the e-Government


19            Building e-commercial network

              Supporting organization in
20            building their own websites and
              approaching e-commercial

              Implementation of IT in
21
              hospitals, centres of health care
              Program for implementing IT in
              reforming teaching and learning
22            methods in universities,
              institutes, colleges and high
              schools
              Program for developing IT
23            industrial zones. Plan for
              building hi-tech zones




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              Investing in infrastructure,
              training IT work force for
24            Thainguyen Center of
              Information Technology and
              Communications
              Computerizing the operations of
              Communist Party organizations
25
              and Office of People's
              committee

26            Building data center




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Nghe An Province
                                                                                                                        Responsible
                                                       Budget
No. of                                                                 Duration         Key characteristics and         Party: Line
                 Title of Project                      (Millions
Project                                                                (mths)           features                        agency in
                                                       VND)
                                                                                                                        charge
1         Standard system for                                                           Each line agency analyses and
          information exchange                                                          standardizes all professional
                                                                                                                        Office of
          among agencies, aligned                     2000                              procedure, information
                                                                                                                        PPC
          monitoring tools and                                                          transaction for effectiveness
          database                                                                      and IT applied in works
          Verify, upgrade and widely
                                                                                        Check, evaluate, upgrade and
          launch available IT system                                                                                    Office of
2                                                     6000                              maximize (if any) and widely
          to agencies in need of                                                                                        PPC
                                                                                        apply for line agencies
          application
          To start support program                                                      Construct and apply software
          for professional works to                                                     programs to support             Office of
3         construct e-offices in Party                12000                             professional works in line      Party, office
          and State-managed                                                             agencies to perform e-          of PPC
          agencies                                                                      agencies
                                                                                        Provincial available database
          Database on socio-                                                                                            Dept of
4                                                     1500                              on socio-economic information
          economic information                                                                                          Statistics
                                                                                        will be developed
                                                                                        Database system to manage
                                                                                        legal documents of provincial
          Database for legal
                                                                                        issuance for update,            Dept of
5         documents of provincial                     500
                                                                                        management, reference and       Justice
          issuance
                                                                                        use information of all legal
                                                                                        papers
                                                                                                                        Dept of
                                                                                        Construction of baseline data
                                                                                                                        Natural
6         Baseline data on land                       17000                             to manage information on land
                                                                                                                        resources &
                                                                                        in the province
                                                                                                                        Environment
                                                                                        Construction of baseline data   Dept of
7         Baseline data on residence                  1500                              to manage population,           Public
                                                                                        residence                       security




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                                                                                   Construction of baseline data
                                                                                   to manage information on
     Baseline data on urban
                                                                                   urban master plan and              Dept of
8    master plan and physical                    1500
                                                                                   investment projects of basic       Construction
     infrastructure
                                                                                   construction in Nghe An
                                                                                   province
                                                                                   Construction of baseline data
     Baseline data on health                                                                                          Dept of
9                                                3000                              to manage medical health and
     care                                                                                                             Health
                                                                                   community health care
                                                                                   Construction of baseline data
                                                                                                                      Dept of
10   Baseline data on education                  4000                              to manage education and
                                                                                                                      Education
                                                                                   supply remote training service
                                                                                   Construction of baseline data
                                                                                                                      Dept of
     Baseline data on                                                              to manage information on
11                                               1500                                                                 Planning and
     enterprises                                                                   enterprises for management,
                                                                                                                      Investment
                                                                                   statistics and other services
                                                                                   Construction of baseline data      Dept of
     Baseline data on staff
12                                               1000                              to manage information on CV        Internal
     resource
                                                                                   of provincial staff resource       Affairs
                                                                                   Construction of baseline data
     Baseline data on labor &
13                                               1000                              to manage information on           DoLISA
     social policy
                                                                                   social policy of the province
     Baseline data on postal and                                                   Construction of baseline data
                                                                                                                      Dept of Post
14   telecom network of                          1000                              to manage postal and telecom
                                                                                                                      and Telecom
     province                                                                      service in the province.
     Baseline data on
     agriculture and rural                                                                                            Dept of
                                                                                   Construction of baseline data
     development, agro-forestry                                                                                       Agriculture
                                                                                   to manage information for
15   land, scientific information                1500                                                                 and Rural
                                                                                   agro-forestry, fishery extension
     for agro-forestry extension,                                                                                     development
                                                                                   and development
     planting and livestock,                                                                                          (DARD)
     infections...
                                                                                   Construction of baseline data
                                                                                                                      Dept of
                                                                                   to manage information on
16   Baseline data on security                   1000                                                                 public
                                                                                   security and social safety in
                                                                                                                      security
                                                                                   the whole province



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                                                                                   Online supply of socio-
     Supply of socio-economic                                                      economic information to all line    Dept of
17                                               500
     information                                                                   agencies, enterprises and           Statistics
                                                                                   people
     Information on files,                                                         Online public services in line
                                                                                                                       Dept of
18   procedure and settlement                    500                               with one-stop service to give
                                                                                                                       Justice
     of petitions                                                                  information and petition solving
                                                                                                                       Dept of
     Register for online issuance                                                  Online public service for
19                                               1000                                                                  Planning and
     of business license                                                           register and business license.
                                                                                                                       Investment
                                                                                   Online public service for
     Register for online issuance                                                                                      Dept of
20                                               1500                              register and construction
     of construction license                                                                                           Construction
                                                                                   license.
                                                                                                                       Dept of
     Reference on information of                                                   Online public service to solve      Natural
21                                               1000
     land, land ownership                                                          problems related to land use        resource and
                                                                                                                       Environment
                                                                                   Online reference,
     Information and settlement
22                                               500                               communication on social             DoLISA
     of labor and social policy
                                                                                   policies, employment ...
                                                                                                                       Dept of
     Information reference on                                                      Information supply on natural
                                                                                                                       Natural
23   natural resources,                          1000                              resources, environment and
                                                                                                                       resource &
     environment and minerals                                                      minerals of the province
                                                                                                                       Environment
     Service on online                                                             Services on remote
                                                                                                                       Dept of
24   consultation and health                     1000                              consultation and health care/
                                                                                                                       Health
     care                                                                          treatment

     Online service for tuition                                                    Services for tuition and remote     Dept of
25                                               1000
     and remote training                                                           training                            Education
      Providing agriculture,
                                                                                   Providing information of            Department
     forestry and fishery
                                                                                   agriculture, fishery and forestry   of Agriculture
26   extension services and                      500
                                                                                   extension of breed, crops,          and Rural
     other related science
                                                                                   epidemic diseases...                Development
     information




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                                                                                   Providing services for every
                                                                                   people and social sectors to
     Providing information of                                                                                        Provincial
                                                                                   look up information and
27   state management on                         500                                                                 Public
                                                                                   knowledge of state
     security and order                                                                                              security
                                                                                   management towards security
                                                                                   and social safety.
     Training, improving skill of                                                  Increasing the awareness and
                                                                                                                     Department
     applying and exploitation of                                                  skill of exploiting IT
28                                               2000                                                                of Industry
     IT in enterprises training                                                    enterprises, especially of
                                                                                                                     and Trade
     electronic trading                                                            electronic trading
     Developing programs of                                                        Research and development of       Department
     computerization in                                                            software, open code solution      of Post and
29   management and                              35000                             system to build application       Tele-
     production with solutions                                                     programs in enterprises,          communicati
     such as ERP, CRM...                                                           especially ERP, CRM systems       on
                                                                                   Pushing up operation of
                                                                                                                     Department
     Developing website                                                            website system and
30                                                                                                                   of Industry
     systems in enterprises                                                        transaction floor of electronic
                                                                                                                     and Trade
                                                                                   trade in enterprises
                                                                                                                     Department
                                                                                   Improving propaganda,
                                                                                                                     of Post and
     Applied IT in community                                                       training and increasing the
31                                               3500                                                                Tele-
     development                                                                   awareness and knowledge in
                                                                                                                     communicati
                                                                                   IT in community
                                                                                                                     on
                                                                                   Enhancing IT and education to
                                                                                                                     Department
                                                                                   improve quality of education,
32   Applying IT in education                    5500                                                                of Education
                                                                                   teaching and studying, training
                                                                                                                     and Training
                                                                                   IT
                                                                                   Enhancing the application of IT
                                                                                   in healthcare to increase the     Department
33   Applying IT in healthcare                   6500
                                                                                   management ability and quality    of Health
                                                                                   of caring community's health.
     Upgrading, building and                                                       Upgrading and synchronizing       Office of
     connecting LAN, Internet                                                      LAN system and Internet           Provincial
34                                               6000
     for all Party and State's                                                     connection in all Party and       People's
     agencies                                                                      State's agencies                  Committee
                                                                                                                     Department
     Building net for special use                                                  Building optical cable for        of Post and
35                                               18000
     period 1                                                                      special use of the province       Tele-
                                                                                                                     communicati
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                                                                                                                       on


                                                                                                                       Department
                                                                                                                       of Post and
     Building net for special use                                                  Building optical cable for
36                                               22000                                                                 Tele-
     period 2                                                                      special use of the province
                                                                                                                       communicati
                                                                                                                       on
                                                                                                                       Department
                                                                                   Building E-gate and electronic      of Post and
     Building and developing E-
37                                               1500                              trading transaction floor of the    Tele-
     gate of the province
                                                                                   province                            communicati
                                                                                                                       on
     Training and improving skill                                                                                      Department
     of exploiting IT for all                                                      Training and improving skill of     of Post and
38   officers, improving IT                      4000                              exploiting IT for 100% officers     Tele-
     cadres in units and                                                           and cadres                          communicati
     agencies                                                                                                          on
                                                                                                                       Department
                                                                                   Building program and training       of Post and
39   Training IT leaders (CIO)                   1000                              IT leaders (CIO) of the             Tele-
                                                                                   province                            communicati
                                                                                                                       on
                                                                                                                       Department
                                                                                   Pushing up propaganda,
     Propagandizing to increase                                                                                        of Post and
                                                                                   increasing the awareness and
40   the awareness of IT among                   1500                                                                  Tele-
                                                                                   training informatics among
     people                                                                                                            communicati
                                                                                   people
                                                                                                                       on
     Updating and standardizing                                                                                        Department
                                                                                   Standardizing IT training
41   IT training program system                  3000                                                                  of Education
                                                                                   program in education system
     of levels                                                                                                         and Training
                                                                                   Upgrading, developing IT
                                                                                   faculty of universities, colleges
     Investing to develop IT
                                                                                   and Technical Secondary             Department
     faculty of Universities,
42                                               10000                             school in the area of the           of Education
     Colleges, and Technical
                                                                                   province to meet the demand         and Training
     Secondary school
                                                                                   for high quality human
                                                                                   resource of the province



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                                                                                   Building Centre for training IT
                                                                                                                     Department
     Building and developing                                                       of Department of Post and
                                                                                                                     of Post and
     Centre for training IT of                                                     Tele-communication to
43                                               3000                                                                Tele-
     Department of Post and                                                        become Centre for
                                                                                                                     communicati
     Tele-communication                                                            professional training of high
                                                                                                                     on
                                                                                   quality


                                                                                                                     IT Steering
44   Promulgating policies on IT                 1500                                                                Committee of
                                                                                                                     the province




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Hai Phong
                                          Budget
No. of                                                     Duration                                                  Responsible
            Title of Project             (Millions                               Key characteristics and features
Project                                                     (mths)                                                      party
                                           VND)
1                                                                            Invest PCs for all State Agency's
          PCs investment                10000                  12                                                    DIC, Supplier
                                                                             Staffs
          Notebook                                                           Invest Notebooks for all State
2                                       2800                    6                                                    DIC, Supplier
          investment                                                         Agency's Leaders
3         Server investment             3280                    6            Invest Servers for all State Agencies   DIC, Supplier
          LAN construction                                                   Construct and maintain LAN for all
4                                       4740                    6                                                    DIC, HPICC
          and maintenance                                                    State Agencies
                                                                             Build City network to connect all
5         City network                  22600                  12                                                    DIC, HPICC
                                                                             State Agencies
                                                                             Setup Internet Access system for all
6         Internet access               1465                    2                                                    DIC, HPICC
                                                                             State Agencies
          Security
7                                       3080                   12            Setup and Operate CNSS                  DIC, HPICC
          Information
          Security and                                                       Setup and Operate SSI for all State
8                                       4280                   12                                                    DIC, HPICC
          safety information                                                 Agencies

          Email                                                              Build IP, Email management system
9                                       1780                    6                                                    DIC, HPICC
          management                                                         for all State Agencies and Staffs

                                                                             Build database framework for State
          Build database                                                     Management : Citizen, Soil,
10                                      60800                  24                                                    DIC, HSP
          framework                                                          Education, Health, Resource,
                                                                             Environment, Science …
11        Email system                  300                     6            Upgrade and Maintain Email system       DIC, HPICC
          Document                                                           Build Digital Documents
12                                      2500                   12                                                    DIC, HSP
          management IS                                                      management system
                                                                             Develop public software : Financial
          Develop public                                                     Management, Personnel
13                                      1760                   12                                                    DIC, HSP
          software                                                           Management, Property management
                                                                             …

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     Economic society
                                                                        Build city economic society digital
14   digital information           1300                   12                                                    DIC, HSP
                                                                        information system
     System
                                                                        Build Video Conference system
15   Video Conference              2500                    9            between People's Committee and          DIC, HPICC
                                                                        some State Agencies
16   GIS application               20000                  18            Build GIS for state management          DIC, HSP
                                                                        Digitalize information of all State
17   Digital information           10740                  24                                                    DIC, HSP
                                                                        Agencies
     Development of
                                                                        Development of portal and public
18   portal and public             16700                  24                                                    DIC, HSP
                                                                        services online
     services online
19   Training for CIO              360                     6            Training for all State Agency's CIO     DIC, HSP
     Training for
                                                                        Training for specialized information
     specialized
20                                 720                    12            technology staff for all State          DIC, HSP
     information
                                                                        Agencies
     technology staff
     Training for basic                                                 Training for basic IT skills of State
21                                 800                    12                                                    DIC, HSP
     IT skills                                                          Staff
                                                                        Improve Broadcast & Diffuse IT
22   Broadcasting                  450                     3                                                    DIC, HPICC
                                                                        knowledge for Citizen, Business …
     Board of IT                                                        Setup Hai Phong Board of IT
23                                 450                     6                                                    DIC, DOHA
     Supervisor                                                         Supervisor
     Specialised
     information                                                        Setup Specialised information
24                                 450                     6                                                    DIC, DOHA
     technology staff                                                   technology staff and unit
     and unit
     Issue Policies to
     develop human                                                      Issue Policies to develop human
25   resources in IT               450                     6            resources in IT use for operation in    DIC, DOHA
     use for operation                                                  state agencies
     in state agencies
     Technical                                                          Build IT Technical services units
26                                 9000                   12                                                    DIC, DOHA
     services units                                                     underly DIC
     Improvement of IT
27   state                         250                     6            Improve of IT state management          DIC
     management



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Annex B – List of Provincial ICT Projects with Budget
                                                     Total budget
            Infrastructure Projects                                  Lao Cai   QTr     HBình   NgAn    THHoá   LSơn   BC n   Lð ng   Bð nh   KhHoà    Hgiang   STrăng   GLai   CB ng   ðBiên   VPhúc   Hyên   QNam
                                                     (VND million)
  Build IT service center. Build Da Nang IT
                                                            5000
  transaction Center
  Project on building authencation center                   3000
  Project on building a infromation system for
                                                            2500
  agriculture and rural development
  Build IT park                                            10000                               10000
  Develop IT infrastructure (LAN, computer,
                                                          217523     31800     4500    16000   6000    6000    2000   4500   18600   2500    5000      1663     6000    5000   5000    3000    10000   4000   3000
  service, etv.)
  Build database                                          434953     10000     19710   26000   5600     960    800    1200   3500    1100    16013                      1000   24000           13000   2250   4650
  Build, upgrade, develop a data integrated
                                                           21200                                               1000   2000           1100    4000      600      1500    2200                           2000
  center
  Build a specilized network, Build backbone
  network to connect between State agencies
  and Party agencies; develop tranmission
                                                           59430               2330            3000                                                                     NA     8000            10000          4800
  infrastructure; upgrade and expand IT
  infrastruture at Party and State agencies; Build
  public service network
  Build a security system, system safety, network
  security. Invest modernization for emergency             21510                                                                                                                               8000
  recover technique and data backup. Anti-virus
  Wireless Sapa town. Build and deploy a piloted
  model of mobility wireless access. Build WiFi at
                                                           14500
  Ha Long city. Mobility wireless access system
  at Da Nang City
  Invest to expand IT infrastructure fo selected
  commune, ward in Ha Long City, Mong Cai,
                                                            9000                       3500                                                                                                    2500    2000
  Uong Bi, Cam Pha. Build a new LAN system,
  connect Internet for commune level.
  Build an information architecture of province             2000                                                                                                               2000
  Build MAN network from capital of World Bank             19000
  Build software technology application
                                                            1000
  environment




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                                                     Total budget
            Infrastructure Projects                                  Cthơ    Qninh   ðN ng   ðNông   ðTháp   PTh    LongAn   SLA     TQuang   AnGiang Công Tum   HTĩnh   TNguyên   HPhòng   Tgiang   Kgiang   Nthu n   ðtháp
                                                     (VND million)
  Build IT service center. Build Da Nang IT
                                                            5000                     5000
  transaction Center
  Project on building authencation center                   3000                     3000
  Project on building a infromation system for
                                                            2500                                                                                                                                      2500
  agriculture and rural development
  Build IT park                                            10000
  Develop IT infrastructure (LAN, computer,
                                                          217523     10000   10500           10000           2000    1300    3000     1200                       2000              18760    12000     4000     8200
  service, etv.)
  Build database                                          434953     12000   73700   5300    3000                    6000    21500   22700     9120     2600     2300              121800   17150              1000    7000
  Build, upgrade, develop a data integrated
                                                           21200             4000                    1500                    1000                                 300
  center
  Build a specilized network, Build backbone
  network to connect between State agencies
  and Party agencies; develop tranmission
                                                           59430                                                             16500                                        1000     10000    3800
  infrastructure; upgrade and expand IT
  infrastruture at Party and State agencies; Build
  public service network
  Build a security system, system safety, network
  security. Invest modernization for emergency             21510             2300                    1500                    2000                                          800      6110     800
  recover technique and data backup. Anti-virus
  Wireless Sapa town. Build and deploy a piloted
  model of mobility wireless access. Build WiFi at
                                                           14500             7000    2000
  Ha Long city. Mobility wireless access system
  at Da Nang City
  Invest to expand IT infrastructure fo selected
  commune, ward in Ha Long City, Mong Cai,
                                                            9000             1000
  Uong Bi, Cam Pha. Build a new LAN system,
  connect Internet for commune level.
  Build an information architecture of province             2000
  Build MAN network from capital of World Bank             19000                     19000
  Build software technology application
                                                            1000                     1000
  environment




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                                                                                                                                                                                                            152
                                                 Total
                                                budget
           e-Government Projects                           Lao Cai   QTr     HBình   NgAn   THHoá   LSơn   BC n   Lð ng   Bð nh   KhHoà    Hgiang   STrăng   GLai   CB ng   ðBiên   VPhúc   Hyên   QNam   Cthơ
                                                 (VND
                                                million)
  Build, upgrade, improve Portal of province     83135               1290    2500    NA     2600    1000   1000   8200    2000     4000     495      4000    3000   2000    1000    5000    3000   2000   2000
  Public administrative service. Public
                                                 127570              11000   1850    890            900    200    5300     400     8000              3000    1000   14000           6300    7050   6000   4000
  administrative service software
  Build information systems, Portals, and
                                                  25342                              1500                  1000                                              1000   2000    1000
  websites for state agencies
  Build a piloted model of IT application
  providing district-level public administrative  37560                              3000   3000                  4500    3000
  service.
  Manage health, community health,
  Computerize the health branch of Khanh Hoa
  province, e-health service, IT application in   27461                       700                                                                                   5000
  health. Project on software serving
  management in hospital
  e-transation site, Build Quang Ninh province
                                                  13600              1000            500
  "virtual technology market" on Internet
  E-transparent one-shop-stop, Deploy software
  for receiving and sending back results of one-  21700                      2500                          700    1700                                                                             1000
  shop-stop record
  Propagandizing online service for people,
                                                   2932              2000                                                  50               182       200
  enhance the awareness
  Support enteprise in popularizing their
  trademark on transaction Portal of Ho Chi Minh
  City. Project on building and supporting         3944
  enterprise participating on e-transacion site.
  Promote trade investment
  Project on building education information
  system, Computernizing the education and
                                                  11747                                                                            6747                             3000
  training branch of Khanh Hoa province, IT
  application in education
  Support IT infrastructure development in
  enterprise. Invest infrastructure and develop
                                                  19000                                                                                                             15000
  computerization programs for management,
  production with ERP, CRM... Solutions
  Question and Answer online, Project on
                                                    983                                                                                     183
  automatic answer
  Manage labor and employment                      2700                        700
  Manage a training establishments system           700                       700
  Build a system for granting ID card               500                              500
  Website for tourist                               800     800
  Build a model of basic information center         720                                      720
  Develop Website system in enterprise             3000                                                                                                             3000
  Build a program on popularizing science and
                                                    500
  techonoly information for communes




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                                                 Total
                                                budget
           e-Government Projects                           Qninh   ðN ng     ðNông   ðTháp   PTh    LongAn   SLA    TQuang   AnGiang Công Tum   HTĩnh    TNguyên   HPhòng   Tgiang   Kgiang   Nthu n   ðtháp   BR-Vtau
                                                 (VND
                                                million)
  Build, upgrade, improve Portal of province     83135     1050     800       2000                                   2400     2000     2800      2000     2500     12800    5000      1500     1200
  Public administrative service. Public
                                                 127570    5030    2800       1000           1900    4000    8300    6500     3250                        3500                        500      2700    13700
  administrative service software
  Build information systems, Portals, and
                                                  25342    1600              250                     3200    1500    4062     6680                        1150               400
  websites for state agencies
  Build a piloted model of IT application
  providing district-level public administrative  37560            4500              7300                                     10340                                                            1500
  service.
  Manage health, community health,
  Computerize the health branch of Khanh Hoa
  province, e-health service, IT application in   27461            3000                                              2250     1300                                                    7000     500
  health. Project on software serving
  management in hospital
  e-transation site, Build Quang Ninh province
                                                  13600    1100    9000                      500     500     1000
  "virtual technology market" on Internet
  E-transparent one-shop-stop, Deploy software
  for receiving and sending back results of one-  21700                              7300            8500
  shop-stop record
  Propagandizing online service for people,
                                                   2932                       500
  enhance the awareness
  Support enteprise in popularizing their
  trademark on transaction Portal of Ho Chi Minh
  City. Project on building and supporting         3944                       500     444                                                                                             3000
  enterprise participating on e-transacion site.
  Promote trade investment
  Project on building education information
  system, Computernizing the education and
                                                  11747                                                                                                                               2000
  training branch of Khanh Hoa province, IT
  application in education
  Support IT infrastructure development in
  enterprise. Invest infrastructure and develop
                                                  19000    4000
  computerization programs for management,
  production with ERP, CRM... Solutions
  Question and Answer online, Project on
                                                    983             800
  automatic answer
  Manage labor and employment                      2700                                                                                                                               2000
  Manage a training establishments system           700
  Build a system for granting ID card               500
  Website for tourist                               800
  Build a model of basic information center         720
  Develop Website system in enterprise             3000
  Build a program on popularizing science and
                                                    500     500
  techonoly information for communes




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                                                                                                                                                                                                                154


                                                      Total
                                                     budget
            e-Government Projects                               Lao Cai   QTr    HBình   NgAn   THHoá   LSơn   BC n   Lð ng   Bð nh   KhHoà    Hgiang   STrăng   GLai   CB ng   ðBiên   VPhúc   Hyên   QNam   Cthơ
                                                      (VND
                                                     million)
  Support enterprise in IT application serving
  integration and development (according to            1040
  Project no. 191)
  Online newspaper                                      500
  Hand over a technology for business
                                                        800                                                                             800
  registering management system
  Hand over a technology for births, deaths and
                                                        900                                                                             900
  marriages management information system
  IT application in community development              3000                                                                                                             3000
  Develop IT infrastructure in education branch        4000
  Develop IT infrastructure in health branch           2000
  Improve a capacity for Editorial Board of Thai
                                                       1350
  Nguyen province Portal
  IT application into state management culture,
  sports and tourist specility of Kien Giang           1800
  province
  Digitalize data, information resource,
                                                      31196      5000            2000    1500   2000                  1000                       296      2000                  1000    3500
  administrative document
  Standardize information, Standardize business
  process. Standardize, computerize workflows         12050               1850   2000                                                                            1000   5000
  in all agencies in province
  IT policy, Strengthen a policy organizing and
                                                       8000               500                                                                                           6000
  attract human resource
  Develop content industry and service                 2000                                                                                                             2000
  Build "Atlat Quang Ninh" digital map                10000
  Support expenditure for building a steering
                                                       3000
  information center of provincial public security
  Apply IT into State agencies aiming at serving
                                                      87500
  administrative reform
  Enhance a capacity of operation and maintain
  for e-mail system, Portal, specialized data          1100
  network of province
  Project on Project management support
                                                       1500
  system
  Support Program no. 191                               400
  Application software system on New
  technology application deploymentation                200
  research




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                                                      Total
                                                     budget
            e-Government Projects                               Qninh   ðN ng   ðNông   ðTháp   PTh    LongAn   SLA   TQuang   AnGiang Công Tum   HTĩnh     TNguyên   HPhòng   Tgiang   Kgiang   Nthu n   ðtháp   BR-Vtau
                                                      (VND
                                                     million)
  Support enterprise in IT application serving
  integration and development (according to            1040                             1040
  Project no. 191)
  Online newspaper                                      500                                                                                                                                       500
  Hand over a technology for business
                                                        800
  registering management system
  Hand over a technology for births, deaths and
                                                        900
  marriages management information system
  IT application in community development              3000
  Develop IT infrastructure in education branch        4000     4000
  Develop IT infrastructure in health branch           2000     2000
  Improve a capacity for Editorial Board of Thai
                                                       1350                                                                                                  1350
  Nguyen province Portal
  IT application into state management culture,
  sports and tourist specility of Kien Giang           1800                                                                                                                              1800
  province
  Digitalize data, information resource,
                                                      31196      300                            1000    400                                        200        300     10700
  administrative document
  Standardize information, Standardize business
  process. Standardize, computerize workflows         12050                                                                                                            2000     200
  in all agencies in province
  IT policy, Strengthen a policy organizing and
                                                       8000                                                                               400      100                                                             1000
  attract human resource
  Develop content industry and service                 2000
  Build "Atlat Quang Ninh" digital map                10000     10000
  Support expenditure for building a steering
                                                       3000     3000
  information center of provincial public security
  Apply IT into State agencies aiming at serving
                                                      87500                                                                                       87500
  administrative reform
  Enhance a capacity of operation and maintain
  for e-mail system, Portal, specialized data          1100                                                                                                  1100
  network of province
  Project on Project management support
                                                       1500             1500
  system
  Support Program no. 191                               400                                                                                                                                       400
  Application software system on New
  technology application deploymentation                200                                                                                                                     200
  research




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                                                                                   Total
                                                                                  budget
                  ICT Services and Applications Projects                                     Lao Cai   QTr    HBình   NgAn   THHoá   LSơn   BC n   Lð ng   Bð nh   KhHoà     Hgiang   STrăng   GLai   CB ng   ðBiên   Bthu n   VPhúc   Hyên
                                                                                   (VND
                                                                                  million)
 Managing documents, work records to support for governance                        49025      1400     2580   3100    2000   2000    150    1000   1000    1700                255     2000    1500           1000     NA      3500    1500
 Video conferencing, online report                                                119210      3000            4000     NA    6000           500    2400    1000     800       2710     3000    3200           6000     NA      5000    5000
 e-Mail system                                                                     16300                                NA           150    500    500      200                335      500     600                            1300
 Applicaions in managing finance, assets                                           26133               6900   1000    250                          6400
 Cadre management, Project on building Cadre information system                     4450                      1000    250
 Socio-economic collection, digital information system. Rapid reporting system.     5455                                     2000                                             455
 IT application deployment according to SOA architecture                           16500                              5000                         5000    1500
 Deploy synchoronously applications of e-office, e-organization program system      8400                                             2000                           800                               5000
 Apply software to support activities of state agency. Build the common-used
 software. Build the updating, use, sharing processes of common-used               10560                                                                                                                       500
 information
 Manage transport work                                                              1450                       700
 Computerize activites of provincial level public security                         10057
 Improve the IT capacity for cader                                                  8300
 Manage the statistical data according to field, branch                             2000                      2000
 Manage inspection work                                                              200                      200
 Manage on standard, measure, and quality                                            150                      150
 Manage the capital work projects                                                    500                      500
 Manage the birth, marriage and death records                                        700                      700
 Manage establishments and activities of indutry production                          500                      500
 Manage the industry zones                                                           500                      500
 Computerize resource-environment branch                                            5802                                                                            5802
 Computerize some activities of Khanh Hoa Province Library                          4263                                                                            4263
 Comuterize administrative manage work on socio order in Khanh Hoa Province         7000                                                                            7000
 Improve the administrative procedure                                               1892                                                                                      1892
 Computerize activities of the provincial military headquarter                      4500
 Project on computerizing state administrative management of the Department
                                                                                     750
 of Labor and Social Welfare Service
 Project on computerizing activities of Party agencies.                             3600
 Survey, appraise, optimize the existing IT application progamrs and deloply
                                                                                    2000                                                                                                              2000
 syschoronously to all units in provinces
 Deploy IT applications to units                                                    4000                                                                                                              4000
 Project on state administrative computerinization of The Department of Health      1500
 Project on IT application in state administrative management of the Department
                                                                                    1500
 of Planning and Investment
 Schedule on IT application in People's Committee's Office                          2100




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                                                                                                                                                                                                                                                 157
                                                                                   Total
                                                                                  budget
                  ICT Services and Applications Projects                                     QNam   Cthơ   Qninh   ðN ng   ðNông   ðTháp   PTh    LongAn   SLA    TQuang     AnGiang Công Tum   HTĩnh   TNguyên   HPhòng   Tquang   Tgiang   Kgiang
                                                                                   (VND
                                                                                  million)
 Managing documents, work records to support for governance                        49025     2500   3000   1500    2000                    1050    1800     900    150        1240     2500      3000    2500      1200                0      1000
 Video conferencing, online report                                                119210     9000   3000   2000    6000            4850    2000    3000    5000                900              28000    6000      2000              3000     1850
 e-Mail system                                                                     16300     1300   1500    350             200            1100     400     300    700         660     400               3105      2000               200
 Applicaions in managing finance, assets                                           26133                   1500                                                                                                             4783              5300
 Cadre management, Project on building Cadre information system                     4450                   1000            1000     700                    500
 Socio-economic collection, digital information system. Rapid reporting system.     5455                                                                   900                                   200               1700
 IT application deployment according to SOA architecture                           16500                           5000
 Deploy synchoronously applications of e-office, e-organization program system      8400                                                                                       600
 Apply software to support activities of state agency. Build the common-used
 software. Build the updating, use, sharing processes of common-used               10560                            700                                                                                            9160              200
 information
 Manage transport work                                                              1450                            750
 Computerize activites of provincial level public security                         10057            7000                           3057
 Improve the IT capacity for cader                                                  8300                            800                                                                                  7500
 Manage the statistical data according to field, branch                             2000
 Manage inspection work                                                              200
 Manage on standard, measure, and quality                                            150
 Manage the capital work projects                                                    500
 Manage the birth, marriage and death records                                        700
 Manage establishments and activities of indutry production                          500
 Manage the industry zones                                                           500
 Computerize resource-environment branch                                            5802
 Computerize some activities of Khanh Hoa Province Library                          4263
 Comuterize administrative manage work on socio order in Khanh Hoa Province         7000
 Improve the administrative procedure                                               1892
 Computerize activities of the provincial military headquarter                      4500            4500
 Project on computerizing state administrative management of the Department
                                                                                     750                                                           750
 of Labor and Social Welfare Service
 Project on computerizing activities of Party agencies.                             3600                                           3600
 Survey, appraise, optimize the existing IT application progamrs and deloply
                                                                                    2000
 syschoronously to all units in provinces
 Deploy IT applications to units                                                    4000
 Project on state administrative computerinization of The Department of Health      1500                                                           1500
 Project on IT application in state administrative management of the Department
                                                                                    1500                                                           1500
 of Planning and Investment
 Schedule on IT application in People's Committee's Office                          2100                                                           2100




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                                                                                  Total
                                                                                 budget
                   Human Capacity and Resources Project                                     Lao Cai   QTr    HBình   NgAn    THHoá   LSơn     BC n     Lð ng    Bð nh   Hgiang   STrăng   GLai    CB ng     ðBiên    VPhúc
                                                                                  (VND
                                                                                 million)
  Training courses for Cader                                                      33470               2300           1500     200    500      1000      1860                      510     1150     4000      500     3000
  Training courses for Leaders, CIO                                                7486               1510    425     50      200                        120     100     236               200               500
  Build and upgrade IT center. Build IT training rooms. Upgrade computer room,
  system of schools, IT training places. Equip 80 computers and network           64578               5000   10000            500    500                880      700              1500    500     14000
  equipments to become a mobile IT training rooms. Develop Tay Bac IT Center
  Train network managers and administrators                                       10316               2000    800                              300                       976      200     350
  Train IT specialized-staffs                                                      2734                       450             200                                        334
  Advanced training, train experts                                                 2862                       750                                       1440
  Develop human resource in general. Train, update new knowledge on IT             9000      1900
  Train software use in business activities.                                       3236                                                                                           136
  Train, universalize IT for people using computer and Internet                     600
  Advanced training of IT for enterprise and society                               3600                                              600                                                           3000
  Train, improve IT knowledge for district-level cader                             2800               2800
  Train IT technical staff in state agencies                                        260                                                                                           260
  Project on deploying open source software                                         750
                                                                                  Total
                                                                                 budget
                   Human Capacity and Resources Project                                      Hyên     QNam   Cthơ    Qninh   ðNông   ðTháp    PTh     LongAn     SLA    TQuang Công Tum   HTĩnh   TNguyên   HPhòng   Tgiang   Kgiang
                                                                                  (VND
                                                                                 million)
  Training courses for Cader                                                      33470       400     400    5600    2000    1500                       600     4000                       600      800               250      800
  Training courses for Leaders, CIO                                                7486       200            1200     700                      15       200      750     240               600               240
  Build and upgrade IT center. Build IT training rooms. Upgrade computer room,
  system of schools, IT training places. Equip 80 computers and network           64578                              2000                     13598              500              500     1000     1250      9000     3150
  equipments to become a mobile IT training rooms. Develop Tay Bac IT Center
  Train network managers and administrators                                       10316       400            2400    1700                      40                        600                                          550
  Train IT specialized-staffs                                                      2734               100                                      50       400      400                       140               480      180
  Advanced training, train experts                                                 2862               200                                      72                        400
  Develop human resource in general. Train, update new knowledge on IT             9000                                                                         3000                               1250               350      2500
  Train software use in business activities.                                       3236                                                                         1000              600     1500
  Train, universalize IT for people using computer and Internet                     600                                               600
  Advanced training of IT for enterprise and society                               3600
  Train, improve IT knowledge for district-level cader                             2800
  Train IT technical staff in state agencies                                        260
  Project on deploying open source software                                         750                                               750




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Annex C – Best Practices on ICT Projects
 Category            No.                Subject                   Best Practice                     Sources                                 Case Study Example            Sources
                                                                                                    Gumicio Dagron, A. 2001 The
                                                                  Common criticisms of ICT for
                                                                                                    Rockefeller Foundation Making
                                                                  development projects are that
                                                                                                    Waves: Stories of Participatory
                                                                  they fail to build on existing
                                   Importance of                                                    Communication for Social
                                                                  systems or work in a
 VIABILITY             1               Actors                                                       Change [Online].
                                                                  participatory way and therefore
                                    participation                                                   Available
                                                                  do not achieve local ownership
                                                                                                    at<http://www.rockfound.org/D
                                                                  (Aley 2003b;Gumicio Dagron
                                                                                                    ocuments/421/makingwaves.p
                                                                  2001;Lloyd Laney 2003b).
                                                                                                    df> [Accessed 17-10-2003]

                                                                                                                                                                          "ICT for
                                                                                                                                                                          Development
                                                                                                    "ICT for Development                    B2BPriceNow.com
                                                                  Another major challenge is to                                                                           Contributing to the
                                   Importance of                                                    Contributing to the Millennium          (Philippines)
                                                                  ensure that cooperative                                                                                 Millennium
 VIABILITY             2               Actors                                                       Development Goals", InfoDev,            www.b2bpricenow.com
                                                                  members who attend the                                                                                  Development
                                    participation                                                   2003                                    E-commerce for Farmers:
                                                                  trainings keep up their skills.                                                                         Goals", InfoDev,
                                                                                                                                            Hands-on Training Program
                                                                                                                                                                          2003


                                                                  There is a need to estimate the
                                                                  level of adaptability of the
                                                                  different actors when
                                                                  confronted to a project mode.
                                                                                                                                            Trust for the Americas,       "ICT for
                                                                  Case study ex:
                                                                                                                                            Organization of               Development
                                                                  Volunteers—one of the             "ICT for Development
                                                                                                                                            American States               Contributing to the
                                                                  greatest strengths                Contributing to the Millennium
                                 Importance of                                                                                              (El Salvador, Guatemala,      Millennium
 VIABILITY             3                                          of the project—also posed a       Development Goals", InfoDev,
                               Actors adaptability                                                                                          Honduras, and Nicaragua)      Development
                                                                  challenge. Although               2003
                                                                                                                                            www.trustfortheamericas.org   Goals", InfoDev,
                                                                  almost all volunteers
                                                                                                                                            IT: Employment for People     2003
                                                                  successfully completed their
                                                                                                                                            with Disabilities
                                                                  assignments, organizations
                                                                  working with volunteers
                                                                  should be prepared to deal
                                                                  with their varying abilities
                                                                  to adapt to new environments

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                                                                  Need to estimate level of local
                                                                  crimes that could potentially
                                                                  harm the project development
                                                                  (especially important in the
                                                                  case of Infrastructure related
                                                                  ICT investment)
                                                                                                                                                                         "ICT for
                                                                  Case study ex:
                                                                                                                                              Fantsuam Foundation        Development
                                                                  Initial experiments with copper     "ICT for Development
                                  Importance of                                                                                               (Nigeria)                  Contributing to the
                                                                  telephone cables did not            Contributing to the Millennium
                                    evaluating                                                                                                www.fantsuam.com           Millennium
 VIABILITY             4                                          succeed because they were           Development Goals", InfoDev,
                                hindering external                                                                                            Improving Healthcare and   Development
                                                                  stolen. The satellite phone and     2003
                                     factors                                                                                                  Education through Shared   Goals", InfoDev,
                                                                  laptop computers are kept in
                                                                                                                                              ICT Resources              2003
                                                                  secure custody, except when
                                                                  they are in active field service.
                                                                  CLC premises have 24-hour
                                                                  security, which is the
                                                                  responsibility of the
                                                                  management committee
                                                                  constituted by the recipient
                                                                  community.
                                                                  Evaluate consistency in
                                                                  electricity flow
                                                                                                                                                                         "ICT for
                                                                  Case study ex:                                                              Fantsuam Foundation        Development
                                                                                                      "ICT for Development
                                  Importance of                   A computer crash meant that                                                 (Nigeria)                  Contributing to the
                                                                                                      Contributing to the Millennium
                                    evaluating                    the database of local                                                       www.fantsuam.com           Millennium
 VIABILITY             5                                                                              Development Goals", InfoDev,
                                hindering external                health information was lost. It                                             Improving Healthcare and   Development
                                                                                                      2003
                                     factors                      was re-created from                                                         Education through          Goals", InfoDev,
                                                                  scratch and is now used to                                                  Shared ICT Resources       2003
                                                                  record the details of
                                                                  births and deaths in one pilot
                                                                  community.




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                                                                  Level of education has an
                                                                  impact on the local actors
                                                                  learning curve, in the way they
                                                                  can capture and transmit
                                                                  information in the post project
                                                                  phase.Case study ex:The
                                                                  educational level of the people                                            Trust for the
                                                                                                                                                                            "ICT for
                                                                  trained posed a challenge.                                                 Americas,Organization
                                                                                                                                                                            Development
                                                                  Many people with disabilities      "ICT for Development                    ofAmerican States(El
                                   Evaluation of                                                                                                                            Contributing to the
                                                                  have not had any access to         Contributing to the Millennium          Salvador,
 VIABILITY             6        hindering external                                                                                                                          Millennium
                                                                  education, nor are they familiar   Development Goals", InfoDev,            Guatemala,Honduras, and
                                     factors                                                                                                                                Development
                                                                  with computers. For many,          2003                                    Nicaragua)www.trustforthea
                                                                                                                                                                            Goals", InfoDev,
                                                                  computers are something                                                    mericas.orgIT: Employment
                                                                                                                                                                            2003
                                                                  completely new and they                                                    for People with Disabilities
                                                                  needed time to adjust to them.
                                                                  These factors need to be taken
                                                                  into account when designing
                                                                  future training and selecting
                                                                  the software applications to be
                                                                  used.
                                                                  The project faced a number of
                                                                  challenges at the beginning,                                               MANOBI (Senegal)               "ICT for
                                                                  which delayed the data             "ICT for Development                    www.manobi.net                 Development
                                                                  services pilot until June 2003.    Contributing to the Millennium          Innovative Internet and        Contributing to the
                                  Coordination
 VIABILITY             7                                          These included delays on the       Development Goals", InfoDev,            Wireless E-services for        Millennium
                                between all actors
                                                                  part of the local administration   2003                                    Strengthening the              Development
                                                                  (e.g., convincing the                                                      Livelihoods of Senegalese      Goals", InfoDev,
                                                                  meteorological office to share                                             Fishermen                      2003
                                                                  weather reports and develop
                                                                  Projects proposal must provide
                                                                  a detail specification of the
                                                                                                                                                                            "ICT for
                                                                  tools used to provide local                                                CEMINA (Brazil)
                                                                                                                                                                            Development
                                                                  assistance to project partners.    "ICT for Development                    www.cemina.org.br
                                                                                                                                                                            Contributing to the
                                                                                                     Contributing to the Millennium          Strengthening Women’s
                                Local Assistance                                                                                                                            Millennium
 VIABILITY             8                                          Case study ex:                     Development Goals", InfoDev,            Leadership in
                                to project partner                                                                                                                          Development
                                                                  One of the challenged faced        2003                                    Community Development
                                                                                                                                                                            Goals", InfoDev,
                                                                  was on how to provide                                                      through Internet
                                                                                                                                                                            2003
                                                                  technical support to partners.                                             Radio in Brazil
                                                                  For example, working out the
                                                                  best way to support partners


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                                                                  when equipment fails or starts
                                                                  to have problems due to
                                                                  viruses. To date, such
                                                                  problems have been dealt via
                                                                  e-mail, phone, and sometimes
                                                                  by arranging for local
                                                                  assistance. Indeed, a key
                                                                  project need is to build local
                                                                  assistance partnerships.
                                                                                                       Chapman, R., Slaymaker, T.,
                                                                                                       & Young, J. (2003).
                                                                                                       "Livelihoods Approaches to
                                                                                                       Information Communication in
                                                                  Past ICT projects have pointed       Support of Rural Poverty
                                    Building on                   out the importance on building       Elimination and Food
 VIABILITY             9
                                 existing systems                 on existing systems (Chapman         Security". Overseas
                                                                  et al., 2003; Lloyd Laney,           Development Institute.
                                                                  2003c) instead of introducing
                                                                  new ones and undermining the         Ballantyne, P., Labelle, R., &
                                                                  ways people currently receive        Rudgard, S. (2000).
                                                                  information.                         Information
                                                                  Case studies have showed that                                                                              "ICT for
                                                                  one best practice relies in                                                                                Development
                                                                  incorporating ICT into existing      "ICT for Development                                                  Contributing to the
                                                                  programs, rather than                Contributing to the Millennium                                        Millennium
                                       Project
 VIABILITY            10                                          maintaining it as a separate         Development Goals", InfoDev,             Abantu (Kenya)               Development
                                  interconnection
                                                                  program. Much of the project         2003                                                                  Goals", InfoDev,
                                                                  was, therefore, carried out in                                                                             2003
                                                                  coordination with Abantu’s
                                                                  other three programs.
                                                                  The sustainability of the project
                                                                  post-implementation should be
                                                                                                                                                                             "ICT for
                                                                  assessed in the project
                                                                                                                                                                             Development
                                                                  proposal.Case study Ex:After         "ICT for Development                     Satellite & HealthNetKenya
                                                                                                                                                                             Contributing to the
                                 Sustainability of                overcoming the majority of the       Contributing to the Millennium           (Kenya)www.healthnet.orgR
 VIABILITY            11                                                                                                                                                     Millennium
                                     Project                      challenges over the life of the      Development Goals", InfoDev,             egional Information
                                                                                                                                                                             Development
                                                                  project, the future sustainability   2003                                     TechnologyTraining Centre
                                                                                                                                                                             Goals", InfoDev,
                                                                  of the project was severely
                                                                                                                                                                             2003
                                                                  undermined by institutional
                                                                  factors. HealthNet Kenya’s


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                                                                                                                                             163

                                                                  status as an NGO came into
                                                                  question after it became
                                                                  apparent that the organization
                                                                  had been registered as a
                                                                  private company. This
                                                                  institutional problem has
                                                                  affected future planning. As a
                                                                  result, the organization had to
                                                                  leave the hospital and its
                                                                  current viability is unclear.
                                                                  An Analysis of 38 Australian e-
                                                                  government
                                                                  projects, carried out by the
                                                                  OCDE organisation pointed
                                                                  out:
                                                                  – 24 were expected to provide
                                                                                                     OCDE - "ICT is everywhere in
                                  E-Government                    $108 million in financial
                                                                                                     Public Administrations: Except
 VIABILITY            12        projects: Low rate                benefits on an investment of
                                                                                                     In Productivity statistics",
                                    of success                    $100 million (actual
                                                                                                     Edwin Lau, 2006
                                                                  benefits/cost of 0.93)
                                                                  – 16 projects expected to
                                                                  provide mainly “social benefits�
                                                                  – All 38 projects had actual
                                                                  benefits/cost of 0.61 (social
                                                                  benefits not included)
                                                                  Heeks [2] conducted an
                                                                  investigation of e-government
                                                                  projects in developing
                                                                                                     Richard Heeks, “e-
                                                                  countries. The results of his
                                                                                                     Government for Development
                                                                  survey show an extremely
                                                                                                     Success and Failure Rates of
                                                                  disappointing position: 35%
                                                                                                     e-Government in
                                  E-Government                    projects are total failures, 50%
                                                                                                     Developing/Transitional
 VIABILITY            13        projects: Low rate                projects are partial failures,
                                                                                                     Countries: Overview� IDPM,
                                    of success                    15% projects are successes
                                                                                                     University of Manchester, UK,
                                                                                                     2003
                                                                  According to Richard Heeks
                                                                                                     http://www.egov4dev.org/sfove
                                                                  (2003), some 85% of e-
                                                                                                     rview.htm, Viewed April-2005.
                                                                  government projects in
                                                                  developing countries have
                                                                  failed in some respect, adding


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                                                                                                                                                                                                164

                                                                  that „of those, 35% failed
                                                                  completely. Only 15 percent
                                                                  can be fully seen as
                                                                  successful. The statistics in the
                                                                  United States and Europe are
                                                                  just as grim. In some countries,
                                                                  “politicians speed up e-
                                                                  governance projects just
                                                                  before elections to win votes,
                                                                  but end up harming the
                                                                  projects�.
                                                                  Studies carried out by IT
                                                                  Cortex concluded that the
                                                                  larger the IT project the more
                                                                                                        IT Cortex, “Failure rate,
                                                                  likely the failure. This highlights
                                                                                                        Statistics over IT projects
                                                                  the necessity to carry out pilot
                                                                                                        Failure rate�.
 VIABILITY            14        Size of the project               testing prior to a full scale
                                                                                                        http://www.itcortex.com/Stat_F
                                                                  implementation, on the
                                                                                                        ailure_Rate.htm, Viewed April
                                                                  importance of change
                                                                                                        2005.
                                                                  management, and on the need
                                                                  for building on existing
                                                                  systems.
                                                                  It has been observed that open
                                                                  source technology tends to
                                                                  generate low user
                                                                  acceptance.Case Study
                                                                  Ex:End-users appear to prefer
                                                                  to learn Microsoft applications
                                                                                                                                                                              "ICT for
                                                                  for employment purposes. A                                                    RITS/
                                                                                                                                                                              Development
                                     Low user                     few of the case studies               "An Analysis of InfoDev Case            Sampa.org(Brazil)www.rits.o
                                                                                                                                                                              Contributing to the
                                   acceptance of                  (Rits/Sampa.org and CDI) use          Studies: Lessons Learned", by           rg.brInternet Access and
 VIABILITY            15                                                                                                                                                      Millennium
                                    open source                   Linux and other open source           Batchelor, S & Sugden, S                Effective Use by Third-
                                                                                                                                                                              Development
                                      projects                    software in their projects.           October 2003, Infodev                   Sector Organizations in
                                                                                                                                                                              Goals", InfoDev,
                                                                  However, end-users often                                                      Brazil
                                                                                                                                                                              2003
                                                                  prefer to learn Microsoft
                                                                  applications because they
                                                                  believe it will make them more
                                                                  employable. While other
                                                                  projects relied on Microsoft
                                                                  products, few of the latter


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                                                                  considered the lifetime cost of
                                                                  Microsoft licenses and the
                                                                  implications this cost would
                                                                  have for small businesses in
                                                                  the South.




                                                                  Projects must carefully assess
                                                                  the ICT technology used, in
                                                                  terms of the costs generated
                                                                  (technology components,
                                                                  training, maintenance, etc.)
                                                                  with the benefits provided.
                                                                  Case studies have showed that
                                                                  traditional telecommunication
                                                                  technology are often more
                                                                  successful.

                                                                  Case study Ex:
                                                                  The geographic coverage of                                                                      "ICT for
                                                                  mobile phone systems is often                                                                   Development
                                                                  broader, and expanding more        "An Analysis of InfoDev Case                                 Contributing to the
                                     Technology                   rapidly, than is Internet          Studies: Lessons Learned", by          Fantsuam, Satellife   Millennium
 VIABILITY            16
                                     Adaptability                 availability (particularly in      Batchelor, S & Sugden, S               Healthnet, Abantu     Development
                                                                  Africa). In addition to the cost   October 2003, Infodev                                        Goals", InfoDev,
                                                                  of the technology needed to                                                                     2003
                                                                  access the Internet (e.g.,
                                                                  computers, servers, modems,
                                                                  telephone lines, telephone
                                                                  usage charges), Internet-based
                                                                  projects often require
                                                                  considerable training in
                                                                  computer and Internet use.
                                                                  Moreover, such projects often
                                                                  require literacy, despite high
                                                                  levels of illiteracy among the
                                                                  poor people, as well as fluency
                                                                  in English (one of the principal
                                                                  languages of the Internet).

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                                                                  While the case studies suggest
                                                                  that Internet has a role to play
                                                                  in providing the poor access to
                                                                  global information in Latin
                                                                  America, they also clearly
                                                                  demonstrate the problems
                                                                  associated with Internet use in
                                                                  Africa (Fantsuam, Satellife
                                                                  Healthnet, Abantu). Indeed,
                                                                  recent studies (McKemey et
                                                                  al., 2003) show that Internet
                                                                  access in Africa is not widely
                                                                  available outside capital cities.
                                                                  As any development project, a
                                                                  successful ICT project should
                                                                  have clear objectives, clearly
                                                                  identified target groups and
                                                                  realistic plans for
                                                                  implementation (Batchelor et
                                                                  al., 2003; Bridges.org, 2004).

                                                                  Case study Ex:                      Bridges.org (2004). The 12
                                                                  An example of good practice         Habits of Highly Effective ICT-
                                                                  on the ICT Stories website is       Enabled Development                     Jharkhand-Chattisgarh
                                                                                                                                                                      JTDP%20factsheets
 VIABILITY            17         Project Planning                 the Jharkhand-Chattisgarh           Initiatives. Bridges.org [On-           Tribal Development
                                                                                                                                                                      .pdf
                                                                  Tribal Development                  line]. Available at:                    Programme (JCTDP)
                                                                  Programme (JCTDP), an eight-        http://www.bridges.org/12_habi
                                                                  year livelihood improvement         ts
                                                                  and empowerment programme
                                                                  targeted at resource poor rural
                                                                  households in 9 largely tribal
                                                                  blocks in Chattisgarh state in
                                                                  India, which has identified its
                                                                  audience and developed its
                                                                  project plans according to their
                                                                  needs.




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                                                                  When designing an ICT
                                                                  program, it’s necessary to
                                                                  understand the different ways
                                                                  in which people learn,
                                                                  communicate, and use
                                                                  information.Case study Ex:This
                                                                  guideline impacted the infoDev
                                                                  case studies in different ways.
                                                                  The case study "Abantu"
                                                                  discovered that seminars and
                                                                  workshops, not written
                                                                  presentations, were more
                                                                  successful advocacy tools due                                                                "ICT for
                                                                  to the oral nature of Kenyan                                                                 Development
                                                                                                     "An Analysis of InfoDev Case
                                                                  society. Connections                                                                         Contributing to the
                               Understanding the                                                     Studies: Lessons Learned", by
 VIABILITY            18                                          developed a system                                                          Abantu (Kenya)   Millennium
                               local social sphere                                                   Batchelor, S & Sugden, S
                                                                  responsive to the learning                                                                   Development
                                                                                                     October 2003, Infodev
                                                                  patterns and needs of both                                                                   Goals", InfoDev,
                                                                  rural and urban communities in                                                               2003
                                                                  Central America. Continued
                                                                  expansion of its model points
                                                                  to its success in understanding
                                                                  how Colombian target
                                                                  communities learn and
                                                                  communicate. In the OAS
                                                                  program, trainers were
                                                                  required first to determine the
                                                                  needs of the disabled, then
                                                                  toadapt the technology they
                                                                  needed to learn in order for
                                                                  them to use it.
                                                                  In ICT projects, the lack of
                                                                  local telecommunications
                                                                  infrastructure can be “one of
                                     Analyzing                    the biggest challenges,
                                                                                                     http://www.iconnect-online.
 VIABILITY            19           Technological                  especially in developing                                                    N-Logue India    N-Logue India. Pdf
                                                                                                     org/stories/lbd/overall_analysis
                                   Environment                    countries� (ICT Stories (Infodev
                                                                  and IICD), 2004).Best practice
                                                                  in overcoming this challenge
                                                                  includes analysing


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                                                                                                                                                                                           168

                                                                  telecommunications and IT
                                                                  infrastructure deficiencies to
                                                                  plan for realistic measures
                                                                  (Chapman et al., 2003),
                                                                  adopting innovative
                                                                  technologies such as the
                                                                  wireless connectivity
                                                                  technology used by the n-
                                                                  Logue project in India
                                                                  (Badshah, Khan, & Garrido,
                                                                  2004b) or developing more
                                                                  accessible devices such as the
                                                                  Simputer (Primo Braga et al.,
                                                                  2003)
                                                                  An analysis of the technical
                                                                  environment should be carried
                                                                  out as it can jeopardize the
                                                                  future of the project or lead to
                                                                  increases in project costs

                                                                  Case study Ex:
                                                                  One of the main challenged
                                                                  faced concerned the poor-
                                                                                                                                                                         "ICT for
                                                                  quality or non-existent
                                                                                                                                               B2BPriceNow.com           Development
                                                                  telephone connections. For           "ICT for Development
                                   Analyzing the                                                                                               (Philippines)             Contributing to the
                                                                  areas far from any telephone         Contributing to the Millennium
                                    presence of                                                                                                www.b2bpricenow.com       Millennium
 VIABILITY            20                                          service, B2Bpricenow is              Development Goals", InfoDev,
                                   Technological                                                                                               E-commerce for Farmers:   Development
                                                                  currently in talks with satellite    2003
                                      support                                                                                                  Hands-on Training         Goals", InfoDev,
                                                                  and wireless technology
                                                                                                                                               Program                   2003
                                                                  companies. In contrast to most
                                                                  developing countries, electricity
                                                                  connection rates are also fairly
                                                                  expensive in the Philippines. At
                                                                  present, B2Bpricenow plans to
                                                                  expand its work only to areas
                                                                  with both electricity and
                                                                  telephone connections, which
                                                                  will limit it to municipal centres
                                                                  and large settlement areas.



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                                                                                                                                                                                               169

                                                                  ICT projects must evaluate the
                                                                  indirect costs linked o an ICT
                                                                  service implementation
                                                                  Case study Ex:A major                                                                                      "ICT for
                                                                                                                                               CEMINA
                                                                  challenge has been the lack of                                                                             Development
                                                                                                       "ICT for Development                    (Brazil)www.cemina.org.brSt
                               Analyzing the cost                 broadband connectivity in                                                                                  Contributing to the
                                                                                                       Contributing to the Millennium          rengthening Women’s
 VIABILITY            21         technological                    many areas. In order to                                                                                    Millennium
                                                                                                       Development Goals", InfoDev,            Leadership inCommunity
                                 infrastructure                   continue the project, CEMINA                                                                               Development
                                                                                                       2003                                    Development through
                                                                  was forced to acquire a                                                                                    Goals", InfoDev,
                                                                                                                                               Internet Radio in Brazil
                                                                  number of satellite digital                                                                                2003
                                                                  connections, which have
                                                                  considerably increased the
                                                                  overall cost of the project.
                                                                  ICT projects require an
                                                                  adaptation phase from the
                                                                  target group. ICT projects
                                                                  proposal must take it into
                                                                  consideration in their
                                                                  implementation phase.
                                                                                                                                                                             "ICT for
                                                                  Case Study Ex.                                                               El Proyecto Conexiones        Development
                                                                                                       "ICT for Development
                                                                  Introducing technology into the                                              (Colombia)                    Contributing to the
                                 Implementation                                                        Contributing to the Millennium
                                                                  classroom affects the current                                                www.conexiones.eafit.edu.c    Millennium
 VIABILITY            22         Phase & Change                                                        Development Goals", InfoDev,
                                                                  organization of the school                                                   o                             Development
                                  Management                                                           2003
                                                                  (schedules, class location,                                                  Integrating ICT into the      Goals", InfoDev,
                                                                  furniture, etc.) and can initially                                           School Curriculum             2003
                                                                  increase the workload of
                                                                  teachers. Therefore, it was
                                                                  imperative that the project gain
                                                                  the support, commitment, and
                                                                  involvement of school
                                                                  managers and teachers from
                                                                  the start.




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                                                                  Research should be carried out
                                                                  on target group, especially in
                                                                  the case of product / service
                                                                  selling. Typical research
                                                                  should include: buying trend,
                                                                  purchasing power, level of
                                                                  debts, etc.
                                                                                                                                                                            "ICT for
                                                                  Case study ex:                                                             Foundation of
                                                                                                                                                                            Development
                                                                  Initially, mobile phones were                                              Occupational
                                                                                                     "ICT for Development                                                   Contributing to the
                                                                  handed out without considering                                             Development
                                                                                                     Contributing to the Millennium                                         Millennium
                               Market research on                 whether the groups could                                                   (FOOD), India
 VIABILITY            23                                                                             Development Goals", InfoDev,                                           Development
                                     target                       afford the subsequent phone                                                www.xlweb.com/food
                                                                                                     2003                                                                   Goals", InfoDev,
                                                                  bills. This resulted in a small                                            Inter-city Marketing Network
                                                                                                                                                                            2003
                                                                  percentage (3 percent)                                                     for Women
                                                                  dropping out of the network                                                Micro-entrepreneurs
                                                                  due to debt. In response,
                                                                  FOOD now only provides a
                                                                  group with a phone once they
                                                                  can prove that they are able to
                                                                  pay the phone bills. “Now the
                                                                  women tell me the cheapest
                                                                  way to run my phone,� says
                                                                  FOOD Director Loyola Joseph.
                                                                  Project plans need to include a
                                                                  plan for internal & external
                                                                  communication to ensure the
                                                                  adherence of the different
                                                                  parties                                                                                                   "ICT for
                                                                                                                                                                            Development
                                                                                                     "ICT for Development                    Foundation of Occupational
                                                                  case study ex:                                                                                            Contributing to the
                                                                                                     Contributing to the Millennium          Development (FOOD), India
                                  Communication                   At first stage of the FOOD                                                                                Millennium
 VIABILITY            24                                                                             Development Goals", InfoDev,            www.xlweb.com/food Inter-
                                    Strategy                      project, the concept of social                                                                            Development
                                                                                                     2003                                    city Marketing Network for
                                                                  capital was not understood by                                                                             Goals", InfoDev,
                                                                                                                                             Women Micro-entrepreneurs
                                                                  staff members, who found it                                                                               2003
                                                                  difficult to understand how they
                                                                  could help women set up their
                                                                  own businesses without grants
                                                                  or loans. This resulted in
                                                                  delays in the project and


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                                                                  additional communication
                                                                  efforts to insure project actors
                                                                  full comprehension of the
                                                                  project plan & objectives.




                                                                  Need to provide a detail post
                                                                  implementation business plan
                                                                  to ensure business
                                                                  sustainabilityCase study
                                                                  ex:The main challenge of the
                                                                  Viva Rio project was Future
                                                                  Stations' sustainability.
                                                                  Telecenters must run as
                                                                  businesses and be self-                                                                                     "ICT for
                                                                                                                                              Future Stations
                                                                  funding. Viva Rio considers the                                                                             Development
                                                                                                      "ICT for Development                    (Brazil)www.vivario.org.brSti
                                   Business                       telecenters to be self-financing.                                                                           Contributing to the
                                                                                                      Contributing to the Millennium          mulating the Economic
 VIABILITY            25       Sustainability post                The radio aspect of Viva Rio is                                                                             Millennium
                                                                                                      Development Goals", InfoDev,            Integration of
                                implementation                    indeed self-financing due to                                                                                Development
                                                                                                      2003                                    LowincomePopulations
                                                                  commercial advertising.                                                                                     Goals", InfoDev,
                                                                                                                                              through the Internet
                                                                  However, selling advertising                                                                                2003
                                                                  requires management, which
                                                                  makes staff training a vital
                                                                  element of telecenter
                                                                  development. Given training
                                                                  requirements, it is hoped that
                                                                  each Future Station can
                                                                  become self-sustaining in three
                                                                  years.

                                                                  A detailed cost structure needs                                                                             "ICT for
                                                                  to be provided as insure best       "ICT for Development                    Satellife & HealthNet           Development
                                                                  possible estimation:                Contributing to the Millennium          Kenya (Kenya)                   Contributing to the
                                    Detailed Cost
 VIABILITY            26                                                                              Development Goals", InfoDev,            www.healthnet.org               Millennium
                                     Structure
                                                                  caser study ex:                     2003                                    Regional Information            Development
                                                                  The cost and complex logistics                                              Technology Training Center      Goals", InfoDev,
                                                                  of bringing computer                                                                                        2003
                                                                  equipment through Kenyan

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                                                                  customs greatly exceeded
                                                                  expectations. The assistance
                                                                  of the World Bank office in
                                                                  Kenya was instrumental in
                                                                  overcoming this problem. It
                                                                  should be noted that Kenya
                                                                  has since instituted a policy
                                                                  change and computer
                                                                  equipment is now exempt from
                                                                  customs.


                                                                                                       "Good Governance for
                                                                  Data from both the public and        development projects", 12/13
                                    Detailed Time
 VIABILITY            27                                          the private sector seem to           March 2007, Seminar output
                                       Frame
                                                                  indicate that 30-40% of ICT          between Dubai, United Arab
                                                                  enabled initiatives are              Emirates
                                                                  delivered on time, on scope
                                                                  and within budget.
                                                                  Project design must
                                                                  incorporate monitoring,
                                                                  evaluation, and impact
                                                                  assessment components, and
                                                                  ensure that these components
                                                                  are implemented.
                                                                  A number of infoDev case
                                                                  studies gathered no baseline                                                                             "ICT for
                                                                  statistics, making it difficult to                                           B2BPriceNow.com             Development
                                 Detail plan for                                                       "An Analysis of InfoDev Case
                                                                  assess their true impact; the                                                (Philippines)               Contributing to the
                                  monitoring,                                                          Studies: Lessons Learned", by
 VIABILITY            28                                          cases continue to display an                                                 www.b2bpricenow.com         Millennium
                                 evaluating and                                                        Batchelor, S & Sugden, S
                                                                  overall weakness in monitoring                                               E-commerce for Farmers:     Development
                               impact assessment                                                       October 2003, Infodev
                                                                  and evaluation. However,                                                     Hands-on Training Program   Goals", InfoDev,
                                                                  certain projects greatly                                                                                 2003
                                                                  benefited from monitoring and
                                                                  assessments conducted
                                                                  informally over the life of the
                                                                  projects. Hands-on learning,
                                                                  for example, in the
                                                                  B2Bpricenow.com project
                                                                  highlighted the need to


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                                                                  integrate mobile phones into
                                                                  the technical design. Ongoing
                                                                  monitoring
                                                                  allowed Future Stations to
                                                                  determine that computer
                                                                  classes focusing on
                                                                  professional skills
                                                                  development were the most
                                                                  popular. The project
                                                                  subsequently modified its
                                                                  offerings to respond to
                                                                  client demand.
                                                                  The projects design must
                                                                  incorporate the social,
                                                                  economic, and communication
                                                                  systems already in place in the
                                                                  target community.Case study
                                                                  Ex:Certain infoDev case                                                                                   "ICT for
                                                                                                                                             SITA
                                                                  studies learned this principle                                                                            Development
                                                                                                      "An Analysis of InfoDev Case           (India)www.kcetu.org/sitaa/s
                                                                  the hard way, while others                                                                                Contributing to the
                                ICT building on                                                       Studies: Lessons Learned", by          itaa.htmlComputer and
 VIABILITY            29                                          applied it in the design stage.                                                                           Millennium
                               existing structures                                                    Batchelor, S & Sugden, S               Information
                                                                  Sita, for instance, realized that                                                                         Development
                                                                                                      October 2003, Infodev                  TechnologyTraining for Low-
                                                                  focusing solely on ICT training                                                                           Goals", InfoDev,
                                                                                                                                             income Women in India
                                                                  was not sustainable and                                                                                   2003
                                                                  subsequently adopted a more
                                                                  holistic approach that included
                                                                  training and internships, laying
                                                                  the groundwork for the
                                                                  employment of its trainees.
                                                                  Case studies have highlighted
                                                                  the need to create
                                                                                                                                                                            "ICT for
                                                                  partnerships with public and
                                                                                                                                             RITS/ Sampa.org                Development
                                                                  private institutional
                                                                                                      "An Analysis of InfoDev Case           (Brazil) www.rits.org.br       Contributing to the
                                                                  infrastructures. Build on
                                      Creating                                                        Studies: Lessons Learned", by          Internet Access and            Millennium
 VIABILITY            30                                          existing formal and non-formal
                                    Partnerships                                                      Batchelor, S & Sugden, S               Effective Use by Third-        Development
                                                                  local organizations and
                                                                                                      October 2003, Infodev                  Sector Organizations in        Goals", InfoDev,
                                                                  communication networks
                                                                                                                                             Brazil                         2003
                                                                  All infoDev projects highlighted
                                                                  the need for
                                                                  partnership, whether to supply


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                                                                  funding, provide
                                                                  technical support, or actually
                                                                  link the technology to
                                                                  projects on the ground (Rits/
                                                                  Sampa.org). To cite
                                                                  but two examples, CDI
                                                                  (Committee for Democracy in
                                                                  Informa

                                                                  It is important to evaluate a
                                                                  project cost - benefit impact.

                                                                  Case study ex:
                                                                  Sampa.org learned a key
                                                                  lesson about sustainability
                                                                  during the experimentation
                                                                  phase. Sampa.org has gone a
                                                                  long way towards ensuring the
                                                                  sustainability of its telecenters
                                                                  by using existing community
                                                                  buildings and installing
                                                                  efficient, low-maintenance                                                                             "ICT for
                                                                  computer systems at minimal                                                 RITS/ Sampa.org            Development
                                                                                                      "ICT for Development
                                                                  cost. Staff training then builds                                            (Brazil) www.rits.org.br   Contributing to the
                                                                                                      Contributing to the Millennium
                               Impact versus Cost                 both institutional capacity and                                             Internet Access and        Millennium
 IMPACT               31                                                                              Development Goals", InfoDev,
                                    analysis                      sustainability. However,                                                    Effective Use by Third-    Development
                                                                                                      2003
                                                                  maintenance of the project at                                               Sector Organizations in    Goals", InfoDev,
                                                                  its present scale costs a                                                   Brazil                     2003
                                                                  minimum of US$400,000 per
                                                                  year, not including the initial
                                                                  investments in equipment,
                                                                  training, planning, materials,
                                                                  etc. If it were to be entirely
                                                                  supported by the community of
                                                                  users, the project would cost
                                                                  approximately US$160 per
                                                                  user per year, or the equivalent
                                                                  of more than two minimum
                                                                  wages. If digital inclusion
                                                                  projects are to become
                                                                  permanent, therefore, they

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                                                                  must count on funding from the
                                                                  state to maintain basic
                                                                  infrastructure and associated
                                                                  personnel.




                                                                  A project must assess the level
                                                                  of loyalty / commitment of the
                                                                                                                                                                               "ICT for
                                                                  project sponsors.                                                             CEMINA (Brazil)
                                                                                                                                                                               Development
                                                                                                      "ICT for Development                      www.cemina.org.br
                                                                                                                                                                               Contributing to the
                                      Post                        Case study Ex:                      Contributing to the Millennium            Strengthening Women’s
                                                                                                                                                                               Millennium
 CONSENT              32         Implementation                   In the near future, CEMINA          Development Goals", InfoDev,              Leadership in
                                                                                                                                                                               Development
                                Sponsors Support                  and other ICT-based programs        2003                                      Community Development
                                                                                                                                                                               Goals", InfoDev,
                                                                  in Brazil may face a funding                                                  through Internet
                                                                                                                                                                               2003
                                                                  problem brought about by the                                                  Radio in Brazil
                                                                  cessation of government
                                                                  support.
                                                                  Need to insure that no 2
                                                                  initiatives will conflict.Case
                                                                  study ex:A number of groups
                                                                  have been approached by
                                                                                                                                                Foundation                     "ICT for
                                                                  financial institutions interested
                                                                                                                                                ofOccupationalDevelopment      Development
                                                                  in providing them microcredit.      "ICT for Development
                                  Contradicting                                                                                                 (FOOD),                        Contributing to the
                                                                  In a number of groups, this         Contributing to the Millennium
 CONSENT              33       strategies between                                                                                               Indiawww.xlweb.com/foodInt     Millennium
                                                                  money gave rise to corruption       Development Goals", InfoDev,
                                    initiatives                                                                                                 er-city Marketing Network      Development
                                                                  rather than the intended            2003
                                                                                                                                                for WomenMicro-                Goals", InfoDev,
                                                                  expansion of activities. To
                                                                                                                                                entrepreneurs                  2003
                                                                  address this problem, FOOD
                                                                  wrote to the financial
                                                                  institutions to encourage them
                                                                  not to lend to the groups.
                                                                  Co-operation from local             ICT Stories (Infodev and IICD)            Batchelor et al. (2003) cite    Batchelor et al.
                                                                  government is to be taken into      2004 Infodev Keep in mind:                the example of ACISAM, an      (2003) - "An
                                       Policy                     account in a lot of projects.       overall analysis [Online].                NGO in Honduras that was       Analysis of InfoDev
 CONSENT              34
                                    Environment                   Either because project              Available at                              unable to bid for radio or     Case Studies:
                                                                  initiators need authorisation       <http://iconnect.osc.nl/stories/l         television space due to        Lessons Learned"
                                                                  from the local government to        bd/overall_analysis>                      policy restrictions.           by Batchelor, S &


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                                                                  start their project, or because       [Accessed 29-7-2004]                                                Sugden, S October
                                                                  the local government may even                                                                             2003
                                                                  be a partner... they will not co-
                                                                  operate to the fullest if they feel
                                                                  that the empowerment coming
                                                                  from the project will challenge
                                                                  their positions of power.� (ICT
                                                                  Stories (Infodev and IICD)
                                                                  2004)
                                                                  Studies on advocacy suggest
                                                                  that best practice is to
                                                                  research the policy
                                                                  environment, recognise the
                                                                  existing power relationships
                                                                  and develop strong
                                                                  relationships where possible          Lloyd Laney, M. (2003a).
                                                                  with policymakers (Lloyd              Advocacy Impact Assessment
                                       Policy                     Laney, 2003a).                        Guidelines. CIMRC [On-line].
 CONSENT              35                                                                                                                        Gyandoot Initiative India
                                    Environment                                                         Available at:
                                                                  Case Study Ex:                        http://www.cimrc.info/pdf/news/
                                                                  One example of good practice          Impactassess.pdf
                                                                  is the Gyandoot initiative in
                                                                  India, which adds value to
                                                                  existing policy structures by
                                                                  giving communities access to
                                                                  government services locally
                                                                  from kiosks.




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Annex D – Best Practices on Broadband Deployment in
     Developing Countries
Intel has extensive global experience facilitating broadband deployments in developing nations.
The key to success in each case is creation of an enabling environment, which can be
accomplished using the five best practices outlined here. Through this enabling environment,
communities and ultimately countries can achieve the critical mass necessary to lower costs and
achieve all the potential benefits of broadband connectivity.
Best Practice 1: Adopt Supportive Regulations
In many developing countries, spreading broadband technology at a pace rapid enough to catch up
and compete with the rest of the world requires simpler and more supportive regulations and
policies. As stated in a report from the World Summit on the Information Society, a “trustworthy,
transparent and non-discriminatory legal, regulatory and policy environment is necessary to
maximize the social, economic and environmental benefits of the information society.�
A wide range of regulatory reforms can be made to create an enabling environment. Hundreds of
countries now have national regulatory bodies. Market liberalization and privatization can increase
private sector investment and healthy competition, and strengthening regulations and making them
more transparent can build the trust necessary to spur greater investment and encourage
infrastructure sharing.
Without encouragement and incentives, operators are unlikely to roll out broadband networks in
non-urban areas, where the majority of citizens live. To make such rollouts cost-effective,
governments can take a number of actions, such as offering tax incentives, implementing initiatives
that promote the sharing of infrastructure, liberalizing licensing conditions and providing more
efficient spectrum allocation.
Changes in government policies can also have a far-reaching impact on ICT and broadband
penetration. An increasing number of countries are altering their current Universal Service Fund
(USF) policies to allow the funds to be used to support not only telephone but also broadband
services. The result — in countries as diverse as Pakistan, Chile, India and Malaysia — is the
extension of voice, data and Internet service to citizens in even the nations’ most remote areas.
Best Practice 2: Form Public/Private Partnerships
In nearly every country, successful broadband deployments begin with a strong commitment from
the government that is then carried out through extensive collaboration and partnerships among
government, industry and private groups.
Intel has worked with dozens of countries to bring together government departments and
ministries, and help them work in concert with telecommunication companies and other industry
groups. In a typical deployment, the government provides guidance and startup funding, and a
telecom provider develops a “telco bundle� that makes ICT deployment profitable to the company,
and at the same time, affordable to consumers. “Telco bundles� are Internet connectivity services
packaged with a PC at an attractive price. A bank or other financial group may also be involved to
offer discounted financing that further encourages consumer purchases.
It is only by working together that ICT and broadband deployment succeeds on all levels —
achieving national goals while profiting local businesses and providing citizens, students and other
consumers with the technology and connectivity they need to thrive in today’s information society.
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Best Practice 3: Invest in Intermediate Infrastructure and Technology
As noted recently in The Economist, “Broadband networks are not helpful without a reliable power
supply and the widespread availability of personal computers.� Particularly in developing nations,
where the infrastructure is not likely to be fully developed, investment is necessary to support the
intermediate infrastructure — including everything from utilities to computers — that in turn enables
successful diffusion of broadband networks.
The World Bank found that in industrialized countries, if a technology reaches 5% of the market, it
is highly likely to reach 50% of the market. However, in emerging markets, only six of 67
technologies that reached 5% of the market went on to capture 50%. The difference is due, to a
great extent, to intermediate technology, which must be in place to ensure successful diffusion of
any new technology.
For governments, the bottom line is that broadband must be supported by a solid infrastructure that
includes, for instance, reliable electricity and dependable roads. Over time, investments in the
general infrastructure, in combination with investments in ICT initiatives, will enable successful and
sustainable broadband deployments.
Best Practice 4: Encourage Competitive Ecosystems
When policy and regulatory reforms are considered, the encouragement of competition should be a
priority, as competition is critical to the market growth seen in nearly 80% of countries worldwide.
Transparent national policies and regulatory frameworks can promote a competitive environment
that attracts investment, drives down prices and makes large-scale rollouts more affordable.
Encouraging competition is not always easy, or popular. The innovations sparked by broadband
and the digital economy it supports can be disruptive to the status quo, sparking political demands
to insulate particular segments of the economy. Even the most well-intentioned policymakers
sometimes protect or introduce laws and regulations that inhibit competition and thereby slow the
adoption of broadband technology. However, such protections can create impediments to the new
opportunities and increased productivity and income provided through broadband.
Policies should be weighed carefully to ensure consumers are protected while at the same time
avoiding over-regulation and unnecessary protections of incumbents. When all levels of
government adopt and support policies that encourage broadband competition, lower prices and
the many benefits of expanded usage are likely to follow.
Best Practice 5: Release Spectrum
Releasing spectrum offers a clear benefit: It enables governments to place bandwidth in the hands
of private businesses that can then develop its use through emerging industries and technologies,
thus offering a significant source of sustained revenue. The question is whether to release
spectrum now or later, and based on basic economic realities, the clear answer is that the time is
now.
Spectrum auctions may be delayed for several reasons, including the fear of not maximizing
government revenue and pressure from incumbents not to introduce competition.
Such delays hamper innovation, suppress delivery of cost-effective broadband services and
negatively impact potential revenue from spectrum utilization.
When spectrum licenses are issued, costs go down, new investments are made in wireless
technologies and new services are introduced into the market. While spectrum auctions can raise
money for deficit reduction, taxpayer relief and other government causes, it is important to realize
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that the greatest benefit is from sustained spectrum utilization and not from the auction proceeds
themselves.
Releasing spectrum now makes solid economic sense because it increases competitiveness, is
better for consumers, leads to innovation and ultimately boosts GDP.




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Annex E – Public-Private Partnerships

1.1      Definition of public private partnerships
For the purposes of this report the definition of PPPs that is proposed here is based on the
definition adopted by the Canadian Council for Public Private Partnerships and reads as follows:
A public private partnership is a “cooperative venture between the public and private sectors, built
on the expertise of each partner, that best meets clearly defined public needs through the
appropriate allocation of resources, risks and rewards�.
This definition has been chosen among many others because of its clarity and brevity.
1.2      PPP models and organizational structures
Over the last couple of decades many countries have developed a variety of models and
institutional arrangements to enable private sector financing and participation in public projects.
These arrangements can range from the simple to the complex. This section summarily describes
these model arrangements to give the reader an insight into the conditions necessary for different
types of projects. Table 3 highlights the range of options available to governments in encouraging
private sector participation in public services, with the term PPP covering options that encompass
a range of cooperative alternatives as envisioned in the definition given at the beginning of this
chapter.
PPPs have been broadly based on concession-type contracts, wherein the concession documents
set out the rights, privileges and obligations of the private investor. The term concession, in the
broader sense, has been used to represent any type of arrangement in which the government
assigns the right to a private investor to provide a particular service under conditions of significant
market power. Thus concessions in this sense include build-own-operate contracts, build-operate-
transfer (BOT) contracts, management and service contracts, and leases. In terms of the market
power condition, application of such models is in a context where the market for supply of a service
is naturally monopolistic. Infrastructure facilities (e.g. ports and airports) and network based
industries (e.g. electricity and gas) are classic examples of sectors characterized by natural
monopoly provision in some of their segments.
1.2.1 Structural reforms in public service delivery
Since sectors may contain potentially competitive and monopolistic segments it is sometimes
useful to unbundle them before concessions are awarded for the monopolistic components.


 Sector                                            Reform                                     Country examples
 Power                                             Separating generation from Argentina,     Australia,
                                                   transmission and creating Colombia, New Zealand,
                                                   competition in generation  United Kingdom
                                                   Permitting free                 entry   in The countries above plus
                                                   generation                                 the United States
 Gas                                               Separating production and Argentina,                      Colombia,
                                                   supply from transmission Mexico

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                                                   and distribution
                                                   Permitting free entry in gas Chile,  Germany,                  New
                                                   transmission                 Zealand
 Telecommunications                                Separating local from long Argentina, United States
                                                   distance services
                                                   Permitting free                 entry   in Australia,   Chile,  New
                                                   basic services                             Zealand, United Kingdom
 Rail                                              Separating       infrastructure Sweden, United Kingdom
                                                   (track) from rolling stock
                                                   Separating railway lines by Argentina, Mexico
                                                   geographic region
                                                 Table 15 - Examples of market structure reform


                         Source: Concessions for Infrastructure, World Bank Technical paper no 399, 1998.

Such structural changes are not always appropriate and are usually viable where markets are large
enough for competition to thrive. Before awarding concessions it is important for governments to
consider what the best approach for service delivery is.
1.2.2 PPP models
Within a concession structure, a key element of how PPPs are classified is the nature and extent of
the risk they transfer from the government to the concessionaire. The broad classifications of PPPs
are described below.
Operating Concessions
Operating concessions are typically characterized by government retaining ownership of the public
assets used in the delivery of services. Such concessions can be categorized as below:
      »     Management and maintenance contracts. In such arrangements the government
            contracts a private provider to take responsibility for management of a public sector facility
            for a fixed period of time (generally three to five years). Management contracts are
            generally performance-based, which means that the earnings of the private sector
            management entity are related to the measures of success set out in the contract. The
            short term operating risks are substantially transferred to the private sector particularly as
            the management company risks its reputation as well as the profits from the contract. The
            government, as owner of the asset, receives all of the profits less the amount of the
            management fee. However, a significant operating risk can still remain with the
            government as long as the government’s financial returns are dependent on the firm’s
            operating performance.
      »     Leases (for operations and maintenance). Asset leases are also fixed period contractual
            arrangements between the government and the private sector. The government leases out
            operating assets, land and buildings. In lease arrangements the government does not pay
            an operational fee to the lessee, instead the lessee pays a fee (possibly fixed, or based on
            revenue or volume, and set out in the contract) to the government for use of the assets, and
            the lessee keeps all the profits from the business. The profits of the private sector lessee
            are entirely dependent upon the operational efficiency attained in the business. In this
            arrangement the operational responsibility and risk is passed on to the private sector and
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            the concessionaire is subject to regulatory control. This type of arrangement is quite
            common in leasing out specialized services such as port facilities, remote area logging in
            forestry etc. Although operating risks are transferred to the concessionaire, the government
            still maintains responsibility for investment and thus bears investment risk.
Investment Concessions
In an investment concession the concessionaire undertakes the responsibility for funding as well
as operation of assets. Concessions can be awarded both for investment in existing infrastructure
or in entirely new facilities (greenfield concessions). The investment obligations of the
concessionaire will be covered in the concession agreement, and may be defined both in cash
amounts and in volume terms, for instance obligations to provide services to a defined number of
new consumers. Operational obligations typically include performance standards and the
concessionaire’s earnings will depend on user charges that relate to (as defined in the concession)
on the quality, promptness and the degree of satisfaction it provides to users22. Both the operating
and investment risks are largely transferred to the private sector in such a framework.
In terms of greenfield developments, the most common types of investment concession model are
summarized below:
      »     Build Own Operate (BOO). This is a contractual arrangement in which a private sector
            investor finances a public service asset and contracts for the requisite construction and
            subsequent operation of the asset. The private investor has ownership of the asset
            throughout its life. The investor is allowed to collect fees, rentals or service charges through
            which he recovers his investment and operating costs. The ownership, although meant to
            be indefinite, in practice can have limitations, not least because the concession agreement
            typically has a finite term. Also, for the contract to remain valid the investor has to carry out
            his business in accordance with the operating parameters set out in the concession
            agreement or by the regulator. The life of the assets may also impose a “natural� contract
            limitation.
            BOO contracts have broad application. For example, they are commonly used for
            independent power (generation) plants (IPPs), where IPPs are contracted to supply
            electricity to a bulk power buyer, usually on behalf of the state, for onward transmission to
            the distributive sector.
      »     Build Operate Transfer (BOT). This model is similar to the BOO except that at termination
            of the concession the ownership of the asset is transferred to the government. The
            investment and operating costs incurred by the investor needs to be recouped through user
            charges – the time needed to do so is typically the key factor in determining the point at
            which the asset is transferred.




22
   There are broadly two types of investment concession as they relate to users. Firstly, if the concessionaire
sells services to the public and is paid directly by them the arrangement is known as a retail concession.
Concessions relating to water, electricity, gas and telephone services are typical examples of retail
concessions. If the concessionaire provides the services or produce to an intermediate bulk buyer and the
intermediate agency in turn sells the services or produce to the ultimate users this would form a wholesale
concession. The UK’s PFI scheme largely comprises wholesale concessions, with the government
purchasing services from the concessionaire in sectors such as health, education and defence amongst
others. In the context of Mongolia the major power generation plants established with private investment are
examples of wholesale concessions.
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Although BOO and BOT contracts comprise the basic forms of model for greenfield investment
concessions, there are numerous variations. Examples include building for lease, rehabilitation of
existing assets through rehabilitate operate transfer (ROT), and adding new investment during an
ongoing lease amongst many others23.
Full privatization
In many instances it is clear that can be competitive markets for the delivery of services that may
serve public requirements, as Box 1 below shows. In such circumstances there is a strong case for
privatization. The extent to which this is done, in terms of whether governments proceed with
partial or full divestiture is often a function of the degree to which the market is perceived to be
contestable. However, it is important to note that privatization is also an option for sectors that are
not contestable. For example a divested business which needs a license to operate may be in
much the same position as a firm with a fixed term lease.
The potential similarities between divestiture and concession raise another issue. It is often
politically expedient to pursue a lease or concession where there is perhaps a better case for “full
privatization� but for which there may be little popular support. Indeed, such possibilities, and the
variety of options that can exist within a concession framework suggest that one must look beyond
a simple classification. Rather it is important to focus on the actual provision of rights, obligations
and risk.
1.2.3         Government organization
As well as looking at specific contractual issues it is important that the institutional arrangements
are right. The interface between the government and the private sector is key to the success of
such deals. Governments need to perform numerous tasks when planning, designing,
implementing, and regulating PPPs. Inefficient organization can result in substantial cost to the
government, private investors, and consumers. The range of duties typically incumbent on
government is given in the box below.
Box 1: Government responsibilities
Effective coordination and execution of these tasks is critical if potential investors are to see that
the government offers a credible PPP opportunity. However, despite the need to achieve an
effective framework, there is no simple, single answer to the organization of government to fulfill
these roles. Decisions on structure, function and roles should be appropriate to the particular
needs of the state, its social and economic needs and policy priorities, and of course reflect the
legal context.
Moreover, all PPPs contain many project specific details or issues such as technical and safety
standards and market structure arrangements that are unique to a particular industry. These need
to be addressed on a sector specific basis. However, there are often common issues (in terms of
project design, appraisal and approval as well as contract award processes) which perhaps can be
dealt with in a cross-cutting approach. There are economies of scale in dealing with such issues
together perhaps in a single cross-cutting agency – which is particularly attractive to smaller
countries or those facing institutional capacity constraint issues.




23
  Affermage is another case in point. In an affermage contract, the private sector takes control of existing
assets, and provides additional funds for their expansion in a concession. Government dilutes its ownership
but retains a significant share, and the private operator takes a controlling share for the period of the
concession. At the end of the concession the government assumes ownership of all assets.
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 Enabling framework                                                         Designing the PPP arrangements
 Adopting legal provisions to enable PPPs                                   Choosing legal instruments
 Establishing             or      identifying           regulatory Allocating responsibilities
 authorities
                                                                       Determining        pricing   and   performance
 Managing              government               support          (e.g. targets
 subsidies)
                                                                            Determining bonuses and penalties
 Managing public relations and information
                                                                            Determining duration and termination
                                                                            Preparing contract content
 Project Identification and analysis
                                           Determining                                        dispute       resolution
 Identifying and prioritizing suitable PPP arrangements
 projects
 Hiring advisors
                                                                            Contract award process
 Undertaking benefit cost appraisals and
                                                                            Choosing method of award
 assessing constraints to be overcome in
 delivery (without duplicating due diligence                                Decisions on prequalification and short
 effort that will be undertaken by potential                                listing
 investors                                                                  Determining bid structure and award
 Approval of projects for implementation                                    Determining bidding rules and procedures
 Setting a timetable for the project                                        Implementing the bidding, negotiation and
                                                                            award
 Supporting measures
 Granting     permits     and        necessary Exercising regulatory oversight
 authorizations (e.g. environmental, rights Implementing regulatory rules
 of way)
                                               Supervision and monitoring
 Determining subsidy and other financial
 support (e.g. contingent liability)           Enforcement


In this respect, whatever organizational form is taken, for the government to successfully solicit and
manage PPPs over the longer term, it must be premised on having the appropriate institutional
capacity in place. This is in relation to the:
      »     Enabling environment, and whether there is an adequate mandate that authorizes
            officials across government who are involved in the PPP development, implementation and
            management process to undertake their tasks with the full cooperation of colleagues who
            will impact on operational delivery, and with the involvement of other stakeholders and key
            decision-makers;
      »     Institutional capacity of ministries and agencies to provide adequate resources and
            supporting structures to PPPs in an appropriate way. ‘Appropriateness’ in this context
            focuses on achieving a high degree of consultation and cooperation across government,
            civil society and private sector stakeholders in formulating plans for PPPs and supporting
            their implementation through the granting of permits etc; and
      »     Relevant skills and competences of the staff responsible for developing potentially
            complex PPP deals (and following through with the monitoring and regulation).


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1.3           Summary of PPP activity
There are several ways in which PPPs have been used throughout the world. PPPs have and
continue to be used extensively for large-scale investments in public infrastructure and more
recently, for the provision of IT services to public enterprises such as governments at all levels.
PPPs are also used by development agencies to help deliver some services in the health sector by
co-opting the help of the private sector24. In general, PPPs have been used for infrastructure
projects in areas other that in ICTs.
The following diagrams from PricewaterhouseCoopers summarize as of October 2005, the types of
PPP projects by activity in countries inside and outside of the European Union25.
It is to be noted that to date there are few ICT projects in either of the EU and non-EU countries,
although in the case of Canada, a major ICT project that is documented as a best practice in this
report does not appear in this table.




                                   Figure 45 - Summary of PPPs by sector in countries of the European Union


24
     See: http://www.netmarkafrica.org/.
25
     PricewaterhouseCoopers. 2005. Delivering the PPP promise. A review of PPP issues and activity.
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                                              Figure 46 - Summary of PPPs by sector in non EU countries




1.3.1         PPPs in Hong Kong
In Hong Kong, PPP’s have had mixed success26:
From the early days of its post-war history, Hong Kong has tapped the private sector in the
provision of economic infrastructure and public services, including the supply and distribution of
electricity and gas, telecommunications infrastructure, cruise terminal and container port, and
public transport. The major impetus for PPP came from the budgetary deficits of the early 2000s
and the government target to reduce public expenditure to no more than 20% of GOP. Under such
arrangements, government defines the quality and quantity of services and their time frame while
the private sector is responsible for delivering the service, including project financing. The benefits
of PPP include productivity improvements and cost efficiency, improvement of quality of service
delivery, risk sharing, encouragement of innovation, generation of business opportunities and jobs,
access to private finance and improvement in cash flows.
Four projects undertaken under PPP in Hong Kong were cited and analyzed to demonstrate the
benefits and pitfalls of such arrangements. These projects were the Cyberport, the Asia-World
Expo, the West Kowloon Cultural District and the Centre for Youth Development. Except for the
Asia-World Expo project, the other three have met difficulties and have in fact eroded the public’s
trust in the PPP arrangements due to issues like inadequate consultations, perceived favoritism,
and procurements issues. These cases underlined the need for full transparency at the project
level, assurance of social responsibility of private partners, and government’s complete credibility
in the preparation, regulation and monitoring of PPP projects.




26
  Hayllar, M. 2005. Promoting public private partnerships to attain Millennium Development Goals in a developed city:
The case of Hong Kong. Europa Daily Bulletin. Vol 1., No. 3, 1-2.
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The challenges in Hong Kong’s PPPs in the immediate term essentially involve restoring the
public’s trust in PPP arrangements. In the long term, it involves strengthening accountability
mechanisms to sustain public support for PPP. This calls for intensive promotion of good practices,
a very inclusive approach, continuous conduct of briefings and other forms of consultations and
public information campaigns.


1.3.2         PPPs in Singapore
For the Government of Singapore, “Public Private Partnership (PPP) is a long-term partnering
relationship between the public and private sectors to deliver services. Through PPP, the public
sector seeks to bring together the expertise and resources of the public and private sectors to
provide services to the public at the best value for money�27.
The Government of Singapore has undertaken the following PPPs. The year in which the PPP
contract was awarded appears as well:
       »    Desalination Plant (Public Utilities Board) – 2003;
       »    Ulu Pandan NEWater Plant (Public Utilities Board) – 2004;
       »    Incinerator Plant (National Environment Agency) – 2005; and
       »    TradeXchange (Singapore Customs) – 2005
The Government of Singapore is also considering the following PPP based projects:
       »    Sports Hub (Ministry of Community Development, Youth and Sports/Singapore Sports
            Council);
       »    Development of the new ITE College West(Institute of Technical Education);
       »    Next Generation National Broadband Network (Next Gen NBN) (The Infocomm
            Development Authority).
At least two of these projects are ICT related and the Singapore Customs TradeXChange is an e-
government project.
The Ministry of Finance of the Government of Singapore is responsible for public procurement for
the administration and their website also includes a very useful FAQ (frequently asked questions)
list regarding PPP28.
For the Government of Singapore, the focus is on finding the most efficient way of delivering public
services for a given public investment. PPPs are one alternative for public service delivery for
projects worth over 50 million Singapore dollars. They will also be considered for projects with a
value below this limit if the PPP approach can be demonstrated to deliver value for money.
In Singapore, “public projects incurring capital costs above 50 million Singapore dollars would be
presented to the Ministry of Finance which would work with the relevant agency on exploring a
PPP. This is similar to the concept of UK PPP taskforce, there is a unit within the Ministry of
Finance that creates awareness of PPP, handles PPP policy and provides guidance on PPP
matters. In addition, the PPP advisory council meets regularly to review and discuss PPP policies.



27
     http://www.mof.gov.sg/policies/ppp.html
28
     http://app.mof.gov.sg/faq/faq.asp?category=Procurement&subheading=Public+Private+Partnership
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The council also oversees the progress of major PPP projects and facilitates resolution of inter-
agency issues�29.
1.3.3 PPPs in the United Kingdom
According to the consultancy Turner and Townsend, in the United Kingdom PPPs represent about
11% of total government annual capital spending and most of this has been for the provision of
health and education services. The key word here is capital spending. In the UK, very little of the
spending on PPPs appears to have been dedicated to investment in IT and/or in operations that do
not entail heavy initial capital investment, which may explain in part their interest as an alternative
source of financing for especially expensive infrastructure projects. It is notable that, IT projects
have not been the focus of PPP activities because if their high failure rate.
The United Kingdom has been at the fore in promoting the use of PFIs (private finance initiatives)
which are the basis for PPPs as an alternative procurement vehicle. To this effect, the Government
of Great Britain created a PPP project to promote PPPs, Partnerships UK (PUK). The following is a
description of PUK that is taken from the organization’s website:30
“Partnerships UK (PUK) is a Public Private Partnership, which has a unique public sector mission:
to support and accelerate the delivery of infrastructure renewal, high quality public services and the
efficient use of public assets through better and stronger partnerships between the public and
private sectors.
The success of these partnerships is fundamental to the Government's investment and
modernisation programme. PUK, formed in 2000 out of HM Treasury, is a joint venture that bridges
the gap between public and private sectors, with a majority stake held by the private sector. PUK
offers a blend of public and private sector commercial expertise combined with hands-on
experience in the development and delivery of numerous Private Finance Initiative (PFI) and other
Public Private Partnerships (PPP) projects.
PUK works solely with and for the public sector. PUK supports:
       »    Individual projects before, during and after procurement – by using its commercial
            experience and expertise critically to increase the chances of success.
       »    Government in developing policy and monitoring compliance – by using its market
            knowledge to ensure that outputs are effective and practical.
       »    The delivery of investment in public services – by co-investing alongside government to
            enhance the intelligent client function in its delivery programmes.
       »    The commercialisation of public sector assets - by providing expert resources to the wider
            markets initiative and investing PUK equity in spin-off organisations.
       »    Background & Governance
PUK was formed by government in 2000 out of HM Treasury. It bridges the gap between the public
and private sectors, with a majority stake (51%) held by the private sector and the remainder
retained by government (HM Treasury 45% and Scottish Executive 4%).




29
     http://app.mof.gov.sg/faq/faq.asp?category=Procurement&subheading=Public+Private+Partnership#question1
30
     http://www.partnershipsuk.org.uk/AboutPUK/PUKMission.asp
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There is a non-executive chairman of PUK. There are 4 executive directors, including a chief
executive, and 5 non-executive directors, including representatives from HM Treasury and the
shareholder executive. Private shareholders do not have any direct Board memberships.
On its creation in 2000 PUK raised capital of c.£45m from its shareholders, largely by way of loan
stock. This capital is used and remains available for investment by PUK to support projects,
programmes and new business in line with the public sector mission.
PUK reinvests any surpluses in the business. It has had a policy of not paying any dividend to
shareholders and, unless there are special circumstances, does not have plans to make
distributions in the future. Through their investment shareholders have contributed to the
development of an effective PPP market in which they can participate alongside others.
Shareholders are paid a fixed coupon on their loan stock.
HM Treasury has established an Advisory Council to oversee the work of Partnerships UK and
ensure that it remains on mission. The Council is made up exclusively of members from the public
sector and meets at least twice a year. It is chaired by the Permanent Secretary of HM
Treasury��31.
1.4      Institutional and organizational arrangements
Examples of how several governments have fulfilled these roles have been touched upon above
also. Further examples are presented here. Regardless of the specific model adopted it is evident
that considerable commitment has been shown in ensuring that there are appropriate mechanisms
for policy making support, coordination and providing specialized resources for development of
PPP transactions.
1.4.1         Bolivia
In 1994, to implement its bold Capitalization Program, Bolivia created the position of Minister for
Capitalization. The Minister was made responsible for all aspects of government programs
covering telecommunications, electricity, railways, airlines, airports, hydrocarbons, and water.
Sector-specific working groups were formed within the Capitalization Ministry, drawing on relevant
expertise from state-owned entities, sector ministries, and the private sector. A central
procurement unit was formed and made responsible for handling the large number of contracts for
consultants and advisers. Once it accomplished its objectives, the ministry was closed
1.4.2         Mexico
Mexico uses a relatively decentralized approach to support its privatization program. Sectoral
ministries primarily design and implement the projects, while the cabinet, supported by an inter-
ministerial commission, does the high-level policy coordination. The secretariat to the inter-
ministerial commission, located in the Ministry of Finance, is not directly involved with specific
concessions but is used as a channel for managing concessional loans and donor support to the
program.
1.4.3         Philippines
The government of the Philippines created a novel institutional structure to support the country's
large private infrastructure program (under the 1989 BOT Law and Regulations). Each sectoral
agency has a specialist "BOT Unit" responsible for coordinating the design and implementation of
its projects. National, provincial, and municipal authorities select and award projects under the
framework. The authorities prepare a list of priority projects, which must be approved by either the

31
     http://www.partnershipsuk.org.uk/projectsDatabase/searchResults2.asp
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Investment Coordination Committee (ICC) of the National Economic Development Authority
(NEDA), the NEDA Board, or by local or regional councils, depending on the conceding jurisdiction
and the cost of proposed projects, as specified in the Implementing Regulations to the Law.
Projects undertaken on a build-own-operate (BOO) basis, or through contractual arrangements
other than those defined under the Law, require presidential approval. As part of its program, the
government created a BOT Center which performs the following tasks:
      »     Keeping an updated national inventory of all nominated projects that are eligible for
            development under the BOT framework.
      »     Providing general advice to foreign investors doing business in the Philippines.
      »     Developing infrastructure projects.
      »     Providing technical assistance and training to central and local government officials on the
            design and implementation of projects.
      »     Spearheading promotional activities for the Philippine BOT program and specific projects
            through brochures and roadshows.
Initially, the Center was mainly involved in marketing the BOT concept to private investors. As the
concept has become better known, most marketing and similar tasks have been devolved to the
BOT units in each sectoral agency. The BOT Center now spends more time training national and
local government officials.




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Annex F – Examples of PPPs for Infrastructure
Delivering public services at the local and community level in India
PPPs have also been used and experimented with as a way of delivering public services at the
local and community level in many countries. Some of the best examples of the role of PPPs in
delivering public services at the local and community level come from India where the use of ICTs
for local and community development both by local government and by private sector operators is
now well established and advancing at a rapid pace32.
In India, where local and community level access facilities and tele-centers are being piloted and
used to an ever increasing extent, PPPs have been considered an incentive in helping these
facilities deliver public information and services in a sustainable fashion. In fact, according to some,
PPPs are the only mechanism available to connect the over 600,000 villages in India.
In India again, a survey of 18 projects dealing with local and community access facilities showed
that PPPs were considered to be a factor in the success of community access facilities. Along with
a PPP approach, the ability to generate information and services in the public domain that were
directly relevant to the priorities of the local community were also considered to be important33.
Some projects exhibit positive indicators for their financial sustainability, especially those that
involve the private sector. Public-Private Partnerships (PPPs) show the most promise for delivering
reliable and desirable public services in a financially sustainable manner.
The evidence from the Indian study especially shows clearly that not only is a PPP based
approach useful, but also, that it can have a role in ensuring the sustainability of the enterprise
proposed while helping to empower people and communities economically and otherwise.
In the same light, results from the Indian study report that success in these projects was linked to
the provision of certain services including communications services. In these cases, the projects
that provided these services were most likely to interest rural users.
In India, ICT projects that “provided an integrated but varied range of information services,
including e-government, education, agricultural information, trade, health, and entertainment … in
conjunction with general communications … seem to have emerged as the primary areas of
interest for rural populations� and thus were most likely to be successful.
Some successful projects from India that operate at the local and community level are documented
below.
(1) n-Logue village kiosks
n-Logue is an Indian company that was34 “launched to fulfill the need for Internet and voice
services in every underserved small town and village in India. The potential demand for Internet



32
   See the e-choupal initiative (www.echoupal.com) undertaken by ITC, one of India’s largest firms, which is diversified
into many areas while being an established operator in the agribusiness sector. The e-choupal initiative uses local and
community level access facilities to allow farmers to buy and sell their produce and obtain related information to manage
their farms.
33
  Harris, R. and Rajora, R. 2006. Empowering the poor. Information and communication technology for governance and
poverty reduction. UNDP-APDIP ICT4D Series. Elsevier. Bangkok, 179 pp.
34
     http://www.digitaldividend.org/pdf/nlogue.pdf
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services in these areas is huge and largely unfulfilled. n-Logue proposes to service this demand
throughout the country. To prevent dilution of its focus, the company will not operate in any of the
top 150 population centers in India.
n-Logue has developed a business model that enables it to fulfill its mission. The critical success
factors for nationwide coverage to happen are appropriate technologies, adequate network
penetration, relevant content and applications, and local partners who will run their enterprises as
viable and profitable businesses�.
n-Logue was founded by members of the academic staff of the Indian Institute of Technology (IIT)
of Madras, now Chennai. The n-Logue business model is the following:
“n-Logue was established to serve the information and communications needs of people living in
small towns and rural areas of India. To rapidly scale its operations, the company employs a three-
tiered business model based on the belief that delivery and management of Internet services
should devolve to the level of the supply chain that comes closest to the user of the service. This
decentralized model of operation draws, in large part, from the success of cable TV operations in
India.
At the top level is n-Logue, which provides equipment, training and support to the LSPs and kiosks,
and also takes care of regulatory and connectivity issues. At the second level, n-Logue identifies
and partners with a local entrepreneur (also called a Local Service Provider or LSP) in every area it
wishes to operate. These LSPs find subscribers, provide services and collect payments. At the
bottom level are the village kiosks, which provide services and information aimed at the rural
market. With the help of n-Logue, the LSPs recruit the local entrepreneurs who set up the kiosks.
Thus there are up to three business entities involved in the operation - n-Logue, the LSP and a
kiosk operator. All three must thrive for the operation to succeed.�

The Role of The Local Service Provider (LSP)
“In Coordination with the LSPs, n-Logue sets up an Access Centre to provide last mile access. It
also assists them in obtaining connectivity to Internet and telecom backbones required for
providing Internet and telephone services. These Access Centers are, in size and scope, small
enough to be managed by people who do not need to be Telecom experts. They need to handle
around 500 to a 1000 customers in a radius of 25 km (around 2000 sq km). Through this model, n-
Logue aims to provide Telecom and Internet connectivity to every small town or village in each
district that it takes up.
Each Access Centre includes:
      »     A leased Internet connection to the nearest Internet gateway
      »     A 60’ tower with multiple CBSs to transmit the corDECT signal
      »     A DIU and RAS for routing Internet and voice data
      »     Radius, NAT and DNS servers
      »     Software to bill customers on a monthly basis and track the payments
Since the technology is easy to deploy and support, the skills of the LSP are more focused on
selling the service, and creating awareness about its value. They could make additional revenues
through value-added services such as hosting web pages and providing local content. They only
need an operating knowledge of the technology, enough to maintain a satisfactory quality of
service.
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In this way, n-Logue encourages a number of small entrepreneurs in all the small towns and
villages where it sets up its operations, making the business of spreading Internet awareness a
much faster, more fleet-footed operation�.

Practice and Lessons Learned
n-Logue is a business enterprise that focuses on delivering services at the community level
through the use of ICTs. The n-Logue model focuses on delivery but not necessarily on developing
content, which invariably will also come from government at the local, state and national levels.
The focus on delivery and the success that the firm has had in developing and delivering
appropriate solutions at the local and community level in rural India make it a natural partner of the
government, which has a responsibility for delivering public information and services to the rural
areas of India.
The principles upon which n-Logue is based may apply in other developing countries. The
following explains the concept35:
“n-Logue uses an approach similar to the 'operator assisted PCO – public call office ' model in rural
areas to provide telecom and internet services. Demand aggregation is through an Internet kiosk,
which is owned and operated by a rural entrepreneur. n-Logue chooses an enterprising local
person from the village itself to setup and run the kiosk. The kiosk operator (KO) is trained to use,
and to help other people use various applications, which are made available by n-Logue. The KOs
are typically youngsters, mostly women, who have passed their 10th standard. They are not
required to have any prior knowledge of computers. But as entrepreneurs, they need to have good
local language communication and networking skills, to be able to serve the village better.
Each kiosk is equipped with a multimedia computer with a web camera and speakers, an Internet
connection, a printer, power back-up and software required including local language software and
video-conferencing software. The kiosk is the hub of the rural connectivity providing
communication services (e-mail, chat, browsing), as well as other much-needed applications like
education and training, healthcare, agriculture consultancy and e-governance.
The above-mentioned equipment, software, training the kiosk operator and 6 month internet
charges all come for a package cost of about $1000. The kiosk operator is required to bring in
around $ 200 and the rest is funded through bank loans. The kiosk needs to earn about $70 to $80
per month from telecom, internet and desk-top services to break even, which in a village of about
1000 people roughly translates to just 7 to 8 cents a month. At this price level, the service becomes
affordable to the rural populace and a sustainable business is built.
The next issue that needs to be addressed is who would service the kiosk operator? What
happens when the computer gets a virus? Where are the technicians who are equipped to deal
with such problems? Such bottlenecks would need to be addressed immediately. Also, kiosk
operators would need regular support in terms of maintenance, connectivity and with
applications/services provided. n-Logue, therefore, created a middle tier of Local Service Providers
(LSPs) to service the needs of the kiosk operators in every county or taluka. The LSP is located in
a town not more than 30km from any village. This proximity enables the LSP to reach a kiosk in
about 60 to 90 minutes in case of an emergency. The LSP covers a 30 km radius, 3000 sq-km/
300-500 villages and is stationed in the place where the tower/access center is located. The LSP
makes a partial investment but has total charge over local operations and is made a 50 percent


35
   Cited directly from: TeNeT. 2004. n-Logue. Building a sustainable rural services organization. International
Telecommunication Union (ITU). Case study: Communications for rural and remote areas. 23 pp.
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partner in the business by n-Logue. The LSP is also assigned the task of identifying an appropriate
entrepreneur in the village and is required to help them, train them, and commission and maintain
the equipment. The business model is such that the LSP earns money only if the kiosks are up and
running.
n-Logue provides the connectivity backbone in the operations, co-ordinates with multiple
technology providers for relevant applications and content, trains LSPs and kiosk operators and
supports them through all operational/technical and other issues, sources critical supplies for
kiosks including the available hardware and software, co-ordinates with regulators and policymaker
to ensure service availability and markets the services to the community with the help of the LSPs
and kiosk operators�.
N-Logue also experiments with novel delivery mechanisms for providing access to a variety of
public services through the village kiosk model. At present, n-Logue is experimenting with village
kiosks that offer eye exams to patients. The exams are undertaken using a digital or video camera
and stored on a computer in the kiosk or viewed live online by a medical practitioner from his/her
office in the closets medical facility or state or private hospital or equivalent facility. A preliminary
diagnosis is rendered and an appointment can be made with a medical specialist in the closest
hospital.
A similar service for measuring vital functions and for taking pulse, heart rate, diabetes and blood
chemistry readings is being developed. N-Logue senses there is a market for these services and
works closely with public agencies when required to examine ways in which these services can be
rendered using what amounts to a novel PPP model adapted to the realities of rural India.
n-Logue works by studying the opportunity and establishing what is the market viability of the
service: is it a service that is in demand and one that government in this case cannot meet? Is it a
service that the public would be ready to pay a reasonable amount to take advantage of?
On this basis, n-Logue will undertake market and technical research to develop an appropriate
proposal that will meet demand while enhancing the capacity of the government to serve the
public.
(2) eSeva centres established in the urban areas of Hyderabad
eSeva Centers (http://www.esevaonline.com/) were established by Government of Andhra Pradesh
in partnership with private sector to deliver on-line services, such as payments, issue of
certificates, and application for documents from different agencies of State, Local, Central
Government and private Sector under one roof36. “The government provided the premises with
furniture and counter operators, while the private partners designed the software, procured and
installed all the hardware, networking and also have the responsibility of meeting all the recurrent
costs at the service centres on account of power, consumables, stationery, security etc… This
project has been implemented on a public private partnership model. It is implemented on the
basis of Build Own Operate Transfer (BOOT) model where in the technology partners will provide
the necessary hardware, software, connectivity and maintenance for the centers. The same
equipment will be transferred to government after the completion of contract period of 5 years37.



36
  Taken from: Bhatnagar, S. PPP in delivery of e-government services to urban and rural citizens: key lessons in
implementation. PowerPoint presentation. 21 slides.
37
  Kalia, P. 2005. Leveraging the financial, managerial and technological strengths of the private sector - A case study of
e-seva in Andhra Pradesh. P 64-67. In Journal of the Eight National Conference on e-Governance. 3-5 February, 2005.
Capacity building for e-governance. Nayak, Mishra and Das editors. 118 pp.,
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Each center has a number of counters operated by private contract staff. Counters have computers
loaded with menu driven software that can process multiple types of transactions by accessing a
Central Web Server which in turn communicates with departmental servers. Departments access
and update their databases when a transaction is performed at an eSeva counter.

Services offered:

132 citizen services of State, Local (municipalities etc), and Central Government and Private sector
are on offer:
      »     Payment of utility bills/ taxes (electricity, water, municipal taxes, telecom, bus passes);
      »     Registration and issue of certificates of births / deaths;
      »     Registration of applications for passports, payment of transport tax, renewal of vehicle
            registration;
      »     Filing of sales tax returns;
      »     B2C services: TTL & Idea Cellular, Reliance, Airtel; Western Union Money Transfer; Apollo
            Services, Pioneer Online; Movie Tickets, Couriers;
      »     Issue of Caste and Nativity Certificate;
      »     There are 44 eSeva centres;
      »     20 eSeva counters in bank branches; and
      »     Website (www.esevaonline.com)

Factors that contribute to the success of the eSeva counters:
      »     Strong and visible political support: Chief Minister’s idea implemented by a handpicked civil
            servant (which helped in persuading key departments from State and Central Governments
            to participate);
      »     Departments charged a fee which could be fixed without adequate analysis-departments
            not happy with the fees;
      »     eSeva directorate could operate with flexibility;
      »     Funds for the pilot were made available easily;
      »     The Chief Minister reviewed progress every week in the first year;
      »     Use of a Public Private Partnership model and informal relationship with private partners-
            better coordination;
      »     Robust technical design and reasonable IT infrastructure; and
      »     Resistance from vested interest was not strong as corruption was not the key issue in bill
            collection.




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Deployment of Wireless Broadband in Rwanda
In late 2006, Altech Stream Rwanda (ASR) contacted Xiocom Wireless38, an US company based
in Atlanta specialized in wireless big scale deployments, to discuss setting up wireless networks for
densely populated cities that will offer internet access, inexpensive phone calls and video
streaming to businesses and consumers. "Internet access would be the first service. In June 2007,
Altech was awarded internet and gateway licenses. Shortly afterwards, the company began
installing a network in Kigali, Rwanda designed to distribute IP-based services over broadband to
subscribers whose access would be primarily CPE-based with a few hot zone users. This
infrastructure was enabled by a technology and distribution agreement that was signed in April
2007 with Xiocom. In many areas of emerging markets satellite links are the only option for
backhaul. Even when other options are available some local operators (ASR included) still prefer
using them. Future wide availability of submarine fibre connectivity, which is planned for 2010 (in
this area), must be accounted for in the network design.
The Xiocom method to evaluate a country’s potential for Wireless Broadband:
Based on its experiences in emerging markets, such as Kigali Rwanda, Xiocom has developed a
process to deploy successful BWA networks with fewer problems and unforeseen complications. It
is composed of several phases that begin after identifying key target markets according to the
following criteria:
      »     Demographic data in the territory/market – it is crucial that the local population be able to
            afford the service. Availability of skilled personnel to run the day to day operations is also
            required.
      »     Solution requirements and fit to create subscriber value – availability of adequate backhaul
            links to provide high speed, reliable and robust networks.
      »     Partnership opportunities – presence of strategic partner candidates with local facilities that
            could serve as the network operator.
      »     Competitive landscape – will drive advanced solutions and services and determine viability
            of market for Xiocom entry.
      »     Business model and financial returns – this depends on the deployment model used, e.g.,
            business, consumer, mobile workforce, public safety, etc.
      »     Political and government landscape – stability of the regime and friendly regulation system
            will help in the process.
      »     Availability of quality attachment assets – important for mounting the access points and
            antennas. The rights-of-way process is relatively lengthy.
      »     Timing and/or degree of difficulty – depending on the complexity of the solution, e.g.,
            availability of backhaul links, rough hilly terrain with dense trees, etc
Once a target market is identified the following process is activated:
      a) Tiger team – An expert team is dispatched to the market to assist in all engineering and
         business activities required to support the rapid assessment and selection of market and
         partner opportunities. This team is accountable for executing Xiocom business model

38              th
   In May 8 2009, Xiocom and Aptilo Network have created an alliance to accelerate the deployment of wireless
broadband networks of Xiocom. Aptilo offers integrated solutions in the field of tariffication systems, user services and
wireless network access
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            definitions with an aggressive goal to shorten the time to complete the market qualifying
            process, locate, qualify and sign a local partner and then turn that relationship over to the
            deployment and business management teams. The tiger team consists of dedicated
            resources including: RF (radio frequency) and network engineers, business development,
            financial analysts, legal, etc.
      b) Local partnering – In this phase, after a local partner is selected as the network operator,
         the process of integrating Xiocom into their organization begins.39 The partner works hand
         in hand with the Xiocom team present in market throughout the various phases of
         deployment. Initial training helps to jump start the customer and provides them with the
         background and understanding of the Xiocom product at a base level; it also allows them to
         participate in the initial site survey and qualification process. The initial training is not
         needed for all customers but can be made available.
      c) Site survey – The goal of a RF site survey is to supply enough information to determine
         the number and placement of access points that will provide the needed coverage
         throughout an area. The survey identifies the initial sites that will be used to deploy the
         network and allows for onsite training with the customer in the site acquisition process. The
         site survey also detects the presence of interference from other sources that could degrade
         the performance of the wireless network.
      d) Selecting best of breed technologies - Several wireless technologies and network
         architectures are possible and their selection depends on the specific deployment model
         used, e.g., business, residential, mobile workforce, public safety, etc. The main
         technologies include WiFi (802.11a/b/g/n) and WiMAX (802.16d/e). While WiFi is a fairly
         mature technology, WiMAX is an emerging technology that could complement WiFi and
         together create new synergies beneficial to end users and operators alike. Xiocom is
         agnostic to any technology and the selection is made based on the recommended solution
         reached through working with the local partner.
      e) Network design – In this phase several network architectures are considered depending
         on the deployment model used and the level of coverage/capacity needed. Accordingly, link
         budgets for downlink and uplink traffic are calculated to determine the number of access
         points and/or base stations needed and their preferred location taking into account the
         terrain, morphology, vegetation, frequency bands, regulations, etc. The network design is
         performed by Xiocom RF and network system engineers in conjunction with the network
         operators engineers so that all local issues/nuances can be considered.
      f)    Selecting vendors and equipment – After the network design has been approved the
            appropriate vendors are selected (e.g., having equipment that complies with local
            government regulations, available frequency bands, etc.). Therefore, the selection of
            specific vendors may vary from country to country. Selection of the equipment is based on
            the network architecture design.
      g) Training – Provided by the network operations team. The team provides onsite training for
         the Xiocom network management system and partner portal into Xiocom as well as
         providing in-country support for the Xiocom install team.




39
  The process of selection of this local partner is considered by Xiocom to be the most relevant and critical step to the
entire process of formation of an alliance to extend broadband wireless in the developing countries
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      h) Initial deployment and testing - Xiocom deploys the initial few sites in the network. The
         local partner receives final training during the installation process of these sites.
      i)    Supervised deployment – The local partner deploys the remaining sites with Xiocom in-
            country team providing support and oversight. Verification and acceptance tests for the
            complete system are then performed.
      j)    Handover to local team – Once the network is functional the Xiocom team “passes the
            baton� to the local operator that will be in charge of day to day operation.40
Some other selected emerging market lessons learned:
1. Basic communication devices are the most useful in these environments
      •     Laptops
      •     Skype phones
2. Re-affirmed solar power should be used as an alternative for powering access points (AP)
      •     “Green� benefits
      •     Mitigates issues due to:
                  o     Limited availability of power sources
                  o     Inconsistent supply of power to the local grid
                  o     Failing power grid infrastructure (in older areas).
3. Design must be focused on initial reliability, redundancy, and flexibility
      •     Testing and maintenance applications must be streamlined for low bandwidth use
4. Design must encompass ability for simple upgrades as higher bandwidth becomes available.




40
  Xiocom’s approach tries to transfer all responsibility on the future evolution of the network to the local partner. This
way its focus approaches a consultancy in the way they do not manage their networks and they offer just to implement it.
Their business core is directed at this implementation stage more than any supervision and continued control over
operation
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Annex G – Examples of PPPs for ICT Applications and
Services
B2BPriceNow.com - Philippines
B2Bpricenow.com is an e-marketplace in the Philippines that enables farmers, fishermen, and
small and medium enterprises to access market prices and trade products. The marketplace can
be accessed via web site or cell phone. The first phase of the project involved obtaining content for
the B2B web site from a variety of agricultural and fishery cooperatives and training them to access
and post products on the site. Because Unisys provides free technical support and hosting,
B2Bpricenow.com is able to offer its services for free. The second phase of the project focuses on
getting target groups connected to the Internet and conducting actual transactions online.
This project is the brainchild of Mr. Edgardo Herbosa. The idea was to set up an e-commerce web
site through which Filipino cooperatives and groups could trade their produce. Mr. Herbosa created
the site in 2001 with some of his own funds and received technical support from Unisys in
exchange for company shares. The project was adopted by a number of government agencies, as
well as the Land Bank of the Philippines and the NGO Philippine Rural Reconstruction Movement
(PRRM). Both of the latter organizations were then planning similar systems.41 These partnerships
enabled B2Bpricenow.com to provide free access to the site for cooperatives and other groups.
The project objective was to “enable farmers to harness the benefits of information and
communications technologies to promote economic development and social well-being.� By
providing transparent and timely market information to both buyers and sellers, the project
enhanced efficiencies in the agricultural market. In addition, the ability of farmers to tap buyers and
sellers directly and to obtain competitive prices for inputs and outputs resulted in higher incomes—
a direct poverty alleviation impact.
The rationale behind the project was that farmers in the Philippines, particularly those in rural
areas, had long suffered from lack of market price information and poor access to buyers and
sellers. Consequently, they had been unable to get the best value for their produce and had
usually relied on traders to serve as intermediaries.
The interests of the traders, however, often conflicted with those of the farmers—putting into
question the reliability of the market price information provided by traders and the fairness of the
purchase and sale prices negotiated by them with the farmers.
In the past, this problem was addressed by cooperatives and government agencies, which
collected samples of prevailing market prices two to three times a week.
These prices were then disseminated on demand a day or two later. By that time, however, the
prices were out of date. The system was also unable to provide comprehensive price information
throughout the 7,100 islands of the Philippines. Moreover, no mechanism existed to allow farmers
and cooperatives to market their products and trade directly with distant buyers and sellers.
To address these marketing deficiencies, B2Bpricenow.com provided a free electronic bulletin
board and marketplace designed to bring relevant market information directly to farmers, primarily
through their cooperatives. As an electronic bulletin board, the web site enables users to gain


41
     Funding for training was obtained from infoDev
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greater negotiating leverage from awareness of prevailing market prices for their products. As an
electronic marketplace, the web site aims to minimize intermediation (middlemen’s fees), thereby
enabling farmers to reap the gains of lower costs and broader market reach.
Project activities included establishment of the web site, creation of web site content, and a
training/information road show presented in over 30 cities. In addition, five two-day workshops
were carried out in conjunction with PRRM. The training program included computer training and
online basics. Project activities were focused on getting cooperatives connected to the Internet in
1,500 municipalities through the establishment of b2bcenters (business centers) on cooperative
premises.

Manobi - Senegal
This project started in early 2003. It used Wireless Access Protocol (WAP) and short messaging
service (SMS) technology via cell phones to provide fishermen with up-to-date weather and market
price information.42
In addition, fishermen were able to use interactive technology to input fish stock information for
marketing purposes and to log their departures and estimated times of return. The latter
information enabled local fishing unions to be alerted if fishing boats failed to return on time.
This project was initiated in January 2003 by MANOBI, a private telecommunications company, in
partnership with three local fishing unions, two telecommunications companies (Alcatel and
Sonatel), and the Canadian International Development Research Center (IDRC). Consultations
were carried out with stakeholders, including representatives of local fishing unions, at the
beginning of 2003, to determine the information needs of local fishermen. These fishermen
typically earned in that moment between 50,000 CFA (US$80) and 100,000 CFA (US$160) per
month.
The MANOBI project aimed to support the livelihoods and improve the safety of Sénégalese
fishermen by giving them access to up-to-date market prices, weather reports, and other
information services via cell phones using WAP and SMS.
MANOBI previously developed a similar scheme for small Sénégalese farmers growing fruit and
vegetables. This service had over 300 subscribers and had enabled farmers to secure higher
prices for their crops. The positive experience of this first project, coupled with the needs of
fishermen and the interest expressed by the national government, encouraged MANOBI to look at
a similar project for Sénégal’s fishing community.
The project began with an analysis of the needs of the fishing sector, as well as a financial and
technical study for project design and implementation. On this basis, the project proceeded,
beginning with the extension of the cellular telephone network to fishing regions. Through the
MANOBI multi-channel gateway, the project was able to produce weather, catch, and price
information in a form readily understandable to fishermen. WAP was chosen as the main
technology because it allowed some interactivity and enabled fisherman and others to access a
central database in real time. Finally, the fishermen were trained to use the WAP network to
retrieve information



42
   The fishing sector presently represents 10 percent of Sénégal’s GDP and employed approximately 17 percent of its
working population. Previous information projects in the fishing sector tended to address the collection of information,
rather than its dissemination to users.
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The project employed two data collectors, who recorded market prices for fish in three locations in
Dakar and Kayar. The information was collected using a ruggedized Psion computer and was
transmitted by cell phone to a central database and web site. Market prices were updated in real
time, enabling fishermen to find out the latest prices immediately upon their return from sea. In
some cases, this enabled them to land on a different beach in order to secure a higher price from
middlemen.
The service required users to buy a WAP-enabled cell phone (available locally for US$90 plus a
US$30 SIM card). Many fishermen, however, already had cell phones, which they used to contact
regular buyers. It took about two minutes to access the data services, at an average cost of 180
CFA (US$0.29) a minute.
One major success of the project to date was persuading Sonatel to install a cellular base station
near the beach at Kayar in March 2003, which provides cell phone coverage up to 14 kilometers
from the shore (allowing fishermen to access the MANOBI data services while at sea). In addition,
some other services have enabled fishermen with cell phones to log their departures and
estimated times of return, so that local fishing unions can be alerted via SMS and the extranet web
site if fishing boats fail to return on time.
Combined with access to real-time weather reports, this service has improved the safety of
fishermen operating from Dakar and the nearby town of Kayar. By recording detailed information
about daily catches, moreover, the database will provide a useful resource for monitoring fish
stocks in the immediate area, which are being over-fished.
When implementing the project, MANOBI experienced a number of delays. The project first had to
persuade the government meteorological office to publicly share weather data. (Previously,
weather reports were made available only to people within the administration and to industrial
fishing ships). It also took time for Sonatel to install the base station at Kayar.
When collecting data about local species of fish, it was discovered that the same species was
called different names by different ethnic groups. Finally, it took time to develop simple,
recognizable graphic icons for the different fish so that fishermen with low levels of literacy could
use the service via a cell phone screen display.

Peoplink – Worldwide
This project supported the development of the first version of “Catalogue Generator� (CatGen)
software, as well as the regional training of some 165 artisan producer groups. The training
enabled the artisans to build, maintain, and update their own web catalogues of craft products for
use in business-to-business (B2B) marketing. While e-commerce is no panacea for artisan
producers, the CatGen system allows users to create online catalogues with minimal web and
computer skills, and has brought significant benefits to producers, especially in the areas of
collaborative product development, liaison with buyers, and simple web- and e-mail-based
marketing.
Although the project is still in its early days, initial sales data is encouraging. Artisan producers who
take the time to maintain and update their sites, and who actively integrate web marketing with off-
line promotion, are generating B2B sales and finding new buyers. The most popular CatGen
artisan web sites are regularly attracting between 2,000 and 3,000 visitors a month, generating
sales of tens of thousands of dollars. Since the majority of collaborating craft partners are fair trade
businesses that employ low-income artisans at “fair� rates of pay, sales revenues directly support
the livelihoods of poor artisans, especially women and their families.
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PEOPLink is a U.S.-based non-profit organization that trains and equips grassroots artisan
organizations all over the world to market handmade craft items using the Internet. PEOPLink has
developed training modules for on-site workshops and provided online support to 55 trading
partners in 22 countries, representing up to 100,000 handicraft artisans. This training allowed the
organizations to develop their own web catalogues of craft products.
The project,43 created a system to enable any producer group to create and maintain their own
web catalogue (see www.catgen.com) using only basic computer skills. The project created three
regional support centers in Asia, Africa, and Latin America. Fifty-five producer groups were trained
and equipped to publish digital images and maintain simple web pages to promote their products.
As a result, some 5,000 craft items were made available to buyers online.
The software used to generate the web catalogues was developed by a multinational team of
programmers working from Ukraine, Siberia, Albania, India, Ecuador, and Ireland, coordinated by
PEOPLink in the USA. The software continues to be developed. It is currently being enhanced with
such features as online tools to handle marketing and promotion, payment, shipping, distribution,
and other services.
Most current users of the CatGen web catalogues are craft organizations with established B2B
operations, primarily within the fair trade sector. PEOPLink has thus been able to create a fully
searchable “catalogue of catalogues� to enable buyers (importers, wholesalers, retail buyers, etc.)
to find products and producer groups. This facility (see www.catgen.com/ifat) was completed for
the International Federation for Alternative Trade (www.ifat.org), a worldwide network of 142
members in 42 countries benefiting 400,000 artisans. The “catalogue of catalogues� was the
culmination of PEOPLink’s efforts to meet the primary goal of the project described in this case
study: “to implement a global e-commerce network of artisan groups.�
PEOPLink has also launched a mechanism for web based review of prototype products by design
experts. This is critical for producers who, due to their isolation, have little or no knowledge of
trends and preferences in their target markets (e.g., Europe and the USA). Designer Karen Brown,
a craft design expert who works with the U.S. Smithsonian Folklife Festival, has conducted 15
reviews covering color, price, size, shape, materials, overall appearance, packing/shipping,
salability, use, text, markets, improvements, diversification, and new products.

Vishnevskaya-Rostropovich Foundation - Russia
The Vishnevskaya-Rostropovich Foundation created a telemedicine healthcare network in the First
Municipal Hospital of St. Petersburg to meet the needs of pediatric medical staff. Using the power
of digital technology and the Internet, the Foundation linked child cancer specialists in St.
Petersburg with colleagues in the USA and Europe. The network has enabled Russian staff to
send MRI scans and records of their patients to other specialists in order to improve the care
management of children living with cancer.
The network has also improved communication between primary care physicians and medical
specialists within the St. Petersburg area, publicly supported, non-profit organization whose aim is
to improve the health and future of children in Russia. The Foundation’s telemedicine healthcare
network, partially funded by infoDev, provided Russian pediatric medical personnel in St.
Petersburg with technology that allowed them to improve the care of children with cancer,
especially leukemia. Based at the First Municipal Children’s Hospital in St. Petersburg, the network


43
     Funded by infoDev
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links hospital staff to the Georgetown University Children’s Medical Center and the Lombardi
Cancer Center in Washington, D.C. It has since expanded its links to medical colleagues in
Europe. By creating an international professional network, the project contributes to the ongoing
educational and consultative needs of Russian cancer specialists.
Other project aims included:
      »     Creating a model system that would define the technical requirements for cross-cultural
            transmission of medical knowledge.
      »     Building the foundation for marked improvement in the survival rate of Russian children with
            leukemia.
      »     Improving the care of Russian children with cancer, who are currently poorly served by the
            Russian health care system.
The incidence of children with cancer in the St. Petersburg area is considered among the highest
in Russia. (This finding is, however, based on incomplete data.) St. Petersburg is the second-
largest city in Russia with a population of 5 million, of which approximately 800,000 are children. At
present, there is no effective program for screening children with cancer in the area. As a
consequence, most children are not diagnosed until the disease is at an advanced stage, which
results in long hospitalizations and poor prognoses.
Leukemia and lymphoma constitute well over 50 percent of the cancers, for which the survival rate
in the USA is about 80 percent. In Russia, however, most children with these diseases die after
lengthy and painful illnesses.
The oncology unit of First Municipal Children’s Hospital in St. Petersburg Children’s Hospital is the
center for treating leukemia in the northwest region of the Russian Federation. Prior to the
installation of the Internet network provided by the project, hospital physicians were isolated from
the medical community beyond the city limits of St. Petersburg. Yet there was a real need on the
part of hospital doctors for contact with their colleagues in other parts of Russia and the West.
Moreover, patients outside of St. Petersburg had no access to hospital specialists except by
traveling to the hospital in person. Nor did physicians outside the city have a way of consulting the
highly trained specialists at the hospital.
The project initially began as a high-tech initiative using a browser-based electronic medical record
(EMR) system as a vehicle for standardizing medical records for international and local medical
consultations. Over time, it evolved into a low-tech system consisting of desktop computers, a
server, Internet access, a digital microscope and monitor, and digital imaging and scanning
equipment.
This technology provides the basis for medical consultations via e-mail, with digitized medical
images used as attachments. In addition, the project is creating a universal information system
appropriate to the Russian context that can be used in partner countries.




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Annex H – Examples of PPPs for e-Government
Enhanced Management Framework - Canada
Although PPPs have been used for large-scale infrastructure projects, including large scale ICT
infrastructure projects, PPPs have been used in e-government as well.
In Canada, “IT project implementation carries a high risk. In 1994 the influential Standish Group
CHAOS Report44 documented results from a survey of 13,000 IT projects. The results
demonstrated that only 18% of government IT projects were successful45. Following a series of
high profile IT project failures that were identified by the Auditor General of Canada46, the
Government of Canada (GoC) decided to move to a common approach for managing IT projects in
order to overcome the problems identified and to increase the probability of project success.
This common approach is called the Enhanced Management Framework (EMF)47 and is a
comprehensive model for managing IT projects in government. In order to ensure implementation
of the EMF by individual ministries, the Treasury Board of Canada48 (the central agency
responsible for ensuring value for money) endorsed a staged approach to implementing EMF…
While no investigation has been conducted to determine the impact of EMF on IT project success,
anecdotal evidence from … consultants who have worked on Government of Canada IT projects
utilizing the EMF does suggest improvements in efficiencies with respect to: cost, schedule and
quality of the product.

Research on adopting a highly structured process (such as the SEI49 CMMI50) for IT projects
(which is part of the EMF) does demonstrate gains in efficiencies and quality.

Some research results are listed overleaf.
       »    Productivity increases ranging from 10 to 100 percent;
       »    Defect and error rate reductions of 45 to 70 percent;
       »    Savings from USD 4 to 6 for every USD invested in process improvement;
       »    Improvements in scheduling can also result, in some cases leading to improvement rates
            ranging from 50 to 1 percent over the project schedule;




44
     www.velocitystorm.com/resources/chaos.pdf
45
  Success is defined as an IT project being delivered on time, on budget and with all required features/functionality. By
the time the 2004 report was published, these figures had improved but the majority of all IT projects are still not
considered successful.
46
     http://www.tbs-sct.gc.ca/emf-cag/largeitproj/lrg-public-it-grnd-ti10_e.asp
47
   The failure of large IT projects is a preoccupation of many countries of the OECD and the GoC is thus not alone in
standardizing IT Project Management Best Practices. The United Kingdom has a similar initiative called ‘Reliable Project
Delivery’ http://www.cio.gov.uk/reliable_project_delivery/index.asp
48
  http://www.tbs-sct.gc.ca/index_e.asp - The Treasury Board Secretariat provides advice and support to Treasury Board
Ministers in their role of ensuring value for money. It also provides oversight of the financial management functions in
departments and agencies of the GoC.
49
     Software Engineering Institute
50
     Capability Maturity Model Integration
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      »     The need to redo or repeat the effort already undertaken was reduced from 40 percent to
            25 percent of the total project effort.�
The lesson to be learned here is that for PPPs in e-government to work, especially for projects
involving the development of software applications, there is a need for a highly structured
approach. This is required for two reasons.
In the first case, because ICT projects can be very complex and secondly, because PPPs are also
a complex undertaking involving in this case several parties and clearly established rules and
procedures in order to minimize risk and also to encourage a favorable outcome. In many
jurisdictions, PPPs are a novel way of doing things and the parties involved may not be used to
working together. This may especially be the case for ICT projects that require the development of
a completely new software application or even more in the case of the development of a more
complex software system from scratch. For ICT projects that are based on the use of existing
systems and that are installations based on a previous experience, the risks may be reduced as a
result of previous experiences and lessons learned, assuming that it is possible to transfer the
lessons learned.
ICT projects that have been implemented using a PPP approach are those involving the installation
of large engineering works as would be the case for the installation of a microwave backbone, an
optical fibre backbone, etc. In these cases, the results are concrete and the costs and benefits can
more readily be measured. However, measuring the level of effort and investment required to
deliver ICT services has presented problems and this may be one reason that ICT projects in some
jurisdictions have not been funded using a PPP based approach.
In the USA, “expanded electronic government is one of the five government-wide initiatives
included in the President’s Management Agenda, with which all federal agencies must
comply…the United States government is the world’s largest consumer of ICT products and
services, having spent more than $15 billion in 2002…Increasingly, governments at all levels are
focusing their efforts on designing public/private partnerships… to support the complex needs of
the public sector… some of those complex needs include:
      »     5,600 government-to-business (G2B), government-to-government (G2G) and government-
            to-citizen (G2C) transactions to be put online
      »     Over 33 million web pages must be made operational across 22,000 Federal government
            web sites.
Government simply lacks the capacity to do it using strictly in-house staff. A partnership with
business may provide access to important skills and resources that are in short supply in many
government agencies and departments.
One best practice cited in the USA is the re-engineering of business processes of the Department
of Taxation (TAX) of the State of Virginia under a PPP agreement with a private sector operator,
the American Management System (AMS). Together TAX and AMS developed a self-funded
project that was implemented over a period of 6 years under a contract worth a total of USD 153
million.
Under the agreement, the AMS would not be paid until Dept. of Taxation uses the new application
successfully to increase tax collections. The result is a one stop shopping web portal that provides
access to policy information, forms and support for remote filing. This project allowed TAX to
undertake mission critical improvements when appropriate funds were not available. Enhanced


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services to the public have been provided using e-government technology, while costs to the public
have been minimized through the partnership’s unique benefits-funded payment method.
While this case study showed the advantages of PPPs in e-government service delivery, there are
also some risks that need to be pointed out. Some of these risks include:
      »     The possibility of exposing the privacy of individuals
      »     Data security
      »     Legal liability
      »     Government accountability that is decreased through contracting out
      »     E-government failure – over 60% of e-government initiatives are expected to fail or fall short
            of goals
      »     The threat of market closure – that is the complete transfer into private hands of public
            goods and services�51.

A PPP best practice in e-procurement: Merx Service
The case of the Merx e-procurement system developed for the Government of Canada by a private
company and used by several levels of government across the country offers useful insights into
what constitutes a successful PPP project in e-government. Details about Merx can be found at
http://www.merx.com/.
This best practice example is presented here in part because of the importance of the application
in question, public e-procurement, which is a cornerstone for e-commerce and for e-government in
any country. This is due to the impact government e-procurement has on the way business is done
in any given jurisdiction. This is especially so where the government has a major influence on the
economy and is an important provider of goods and services.
Many developing countries typify this given their present status in the development of the
information economy and the level of readiness of the private sector in general and of small and
medium sized enterprises (SMEs) in particular.
E-procurement is essential to help many developing countries to acquire the comparative and
competitive advantage it needs to compete in the region and internationally. This is because it is a
very efficient way of encouraging the private sector in general and SMEs in particular to use ICTs
for business.
Another reason for considering this example of best practices that e-procurement has such a
multiplier effect on many other areas of e-commerce and by extension of e-government. In some
jurisdictions, e-procurement pilot projects have been used as a platform for enhancing the capacity
of the private sector to use e-commerce.
The Merx system detailed here provides online access to all procurement notices of the federal
Government of Canada and of several other sub-national government levels and agencies across
the country. A similar system has also been implemented in the Philippines. The Merx service also
provides access to all of the relevant documentation required to assess a bid. The bidding itself is




51
  Richardson, C. 2004. Digital government: Balancing risk and reward through public/private partnerships in Digital
government: Principles and best practices. Chapter 13. p. 200 – 217, Idea Group Incorporated.
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not done through the online Merx service. The Merx service is one where users must register and
which at present is funded by the Government of Canada52.
The Merx system includes a payment platform to allow for the purchase of tender documents and
possibly for other services such as registering companies online and taking credit card information
to pay for registration, subscription and document delivery and other related services.
“MERX has been a very successful example of a PPP for e-procurement. The Canadian
government e-procurement was initiated in the late 1980's and early 90's at a time when the
government was trying to implement a number of budget cuts and funding for new initiatives was
very limited. Initial studies by the government for an electronic procurement program at the time
estimated that a budget in the order of CAD 10 million was required to establish and operate an e-
procurement service. This would be above and beyond the cost they already incurred to manage
Government of Canada procurement processes. AT the time, a climate of cost cutting and fiscal
restraint had limited the availability of public funds for this purpose.
To move forward, the government solicited industry in order to consider available options to
establish an e-procurement program as a self-funding operation. This led to the outsourcing of the
government's e-procurement service. This was achieved by a concession through a sole license of
the procurement information of the Government of Canada to a third party. That third party was a
private sector operator who would build and operate an e-procurement service that would be
funded by user fees.
The selection of the successful operator was based on the following criterion: best cost to the
individual users. The service was to include both the electronic distribution of information and a
fulfillment service to manage the physical distribution of bid documents.
Under this arrangement the government was able to establish an e-procurement procurement
program, which became recognized as one of the most open and transparent systems in the world.
The system was established at essentially no cost to the Government of Canada. The system that
was eventually put into place also saved the Government of Canada approximately $6 million per
year in photocopying, courier and fax costs. These were the costs to the government for
distributing bid documents to suppliers who requested them.
The approach taken back in 1991 is still applied today with the current MERX system. During the
fifteen years the system has been in operation, the government has awarded the service contract
to three different suppliers using the same basic principles for evaluation - the supplier who first
meets the ability to delivery of the required service at the best price to the users. Though the
service was initially implemented as a fully self-funded business service, the government currently
subsidizes the operation of the service to ensure the majority of federal government information is
made available to users at no costs. The decision for the government to fund the service was a
policy decision taken at a time when the Government of Canada was no longer subject to the cost
cutting program that applied in the early 90s.
The PPP approach allowed the government to mitigate significant risk associated with the
proposed self-funding arrangement, as there was no guarantee that any business volumes would
be achieved. It also took a few years for the market base to grow to sustainable levels. In the first




52
  Fagan, J. 2007. Personal communication. Joe Fagan was the designer of the Merx system of the Government of
Canada and is presently engaged in the Philippines in the development and operation of the PhilGEPS e-procurement
system. Joe Fagan can be reached at: Joe Fagan jbfagan@rogers.com.
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year of operation, the supplier was able to grow the user based from about 2,000 to 6,000 users
and after the first five years the service was supporting over 12,000 users.
Presently, the MERX service maintains more the 25,000 users actively pursuing government
opportunities. The large marketplace for government opportunities has also provided the
government with on-going competition for their procurement opportunities. This competition
typically allows them to receive another 10% saving on previous tender offers that were
undertaken without competition.
The Philippine government applied a similar approach for the development of their electronic
procurement program (PhilGEPS). When the Government of the Philippines started, the
government did not have any technical expertise or knowledge about the implementation and
management of an electronic procurement system.
Following the Canadian model and using a modified version of the Canadian system, the
Philippines were able to quickly establish an initial e-procurement system (EPS) to help educate
and train users on the electronic procurement system. After starting with a couple of participating
agencies and a few hundred suppliers, the Philippine government was able to create an e-
procurement service that now supports more than 4,300 agencies and 25,000 suppliers. In the
past year, the Government of the Philippines also launched their own system, which was built with
their own local supplier under a PPP agreement�.
One of the reasons that this PPP was so successful is that the company that won the bid, Merx
Cebra, a division of the Bank of Montreal, one of the 5 largest banks in Canada, had already
developed a similar application. All of the expertise required and a true understating of the costs
and risks and of the business case in general were clear advantages to Merx Cebra.
The advantages to the Government of Canada of the Merx are so great, that is now offers the Merx
basic services free to Canadian suppliers meaning that the Government of Canada pays all fees
for the service.
Several other public jurisdictions in Canada also use the Merx, which has added value to the
service to all concerned while simplifying procurement procedures for everyone.
The Merx interface to tender opportunities appears. A similar project has been initiated in the
Philippines with the help of the Canadian International Development Agency (CIDA) initially and
now with the engagement of other parties. This system is the PhilGEPS mentioned above.

For Merx, go to: http://www.merx.com

For PhilGEPS, go to: http://www.philgeps.net/GEPS/default.aspx



Three different success cases which triggered improved e-government
     services
(1) The Nangi Case – If you build it, they will come
The deployment of ICT services in Nepal is a daunting task, and particularly in the high mountains
of western Nepal, near the Annapurna range, where the challenges are particularly acute.
Nevertheless, in September 2003 the village of Nangi with 800 inhabitants and a tradition of doing
almost all chores without automation, was connected successfully to the worldwide Internet. This
was the culmination of a five year process –a cooperative venture among several villages to set up

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a group of relay stations starting with Nangi and extending to Pokhara, the nearest Internet hub.
While the villages were primitive, the technology used was modern, rugged and reliable. A dozen
access points were connected to the dial up ISP in Pokhara. Gradually till today dozens of more
villages and other regions have been added to this network and a variety of Internet based
services have been implemented with considerable success: telemedicine, online classrooms,
improved communication and many more. The services has been so robust and continuously
successful that a member of a parliament of Scotland complained that the Nangi Project developed
by local volunteers was delivering a higher lever of service in the mountains of Nepal than that
available from British Telecom in the Scotch Highlands.53
Since the original implementation five years ago there has been a surprisingly rapid deployment of
additional capabilities and applications. From one village, Nangi, in 2003 the number of
installations has risen to 22 sites, including ten schools, a library and a hospital. The basic
deployment approach has been extended to several other regions within Nepal, and support both
from government and external agencies has increased substantially over the years. As the number
of sites increases the applications are going up proportionally.
For example, Gandaki College of Engineering and Sciences helped develop an e-commerce
application using open source software. Villagers can actually use this application to provide
information about the products they have for sale. There is now a local bulletin board application
which allows the posting of urgent information, news, announcements, etc. This bulletin board also
has user advertisements, attracting buyers and sellers. Also Kathmandu Engineering College has
developed telemedicine applications which have been successfully connected with Dolakha
Hospital, located about five hours ride away from Kathmandu Model Hospital. At the same time
VoIP applications using open source software have also been developed for handling voice traffic.
As of late 2008 the list of new applications seems endless – there are special curricula being
developed in the local language with the help of Open Learning Exchange – Nepal (OLE-Nepal)
using open source software for the “one laptop per child program� for second and sixth grade
students in science, math and English. Useful applications for villagers in the local language are
also being deployed by OLE-Nepal and have been made available through e-library. The
application is platform free and can also be used in Microsoft Windows platform.
There are several reasons which make the Nangi case unusual. First, it was not initiated through
government, NGO or multilateral interventions. Second, it was managed entirely by Nepalese local
leaders, with assistance provided through skilful selection of outside helpers mostly volunteers
from developed nations. There was no role of the USAID, UNDP or World Bank in the project.
Third, the hardware used was top of the line and not a compromise among cheap or ageing
technologies. Fourth, the cost of the project was relatively modest, because there was no “middle-
man� charges and because several equipment suppliers were so impressed with the Nangi
concept that they gave large price concessions. Perhaps the most unusual aspect of the case is
that the entire effort was not driven by an application, like licensing, taxation or finance. Instead,
the idea for Nangi was, “if you build it they will come�. The connection was established and the
applications followed.54



53
   The International knowledge and press cooperation in spreading the news about this initiative is considered to be one
of the main reasons of its success, making vendors realise the opportunity they had to announce themselves by offering
free hardware to this Project, amidst other recognitions and advantages
54
   The leader of the project, Mahabir Pun, received the prestigious Ramon Magsyasay Award (the “Asian Nobel Prize�)
for Community Leadership in a ceremony in Manila in August 2007.
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(2) The Nenmadi Case – For profit rural business centers diversify into service-led
employment and village BPOs
The main aspects of e-government service delivery that can be addressed through technology are:
interagency collaboration; the strategic use of technology for a killer application; security and
privacy; data sharing, governance of cross-organizational initiatives; document and data
management and standardization of internal systems.
The rural business kiosk project known as “Nenmadi� in Karnataka is worth highlighting for two
reasons: (i) it is providing financially viable rural kiosks that are realizing development benefits in
terms of delivering government to citizen services (G2C) and business to citizen services (B2C)
and (ii) Nenmadi is increasing employability prospects through education and rural Business
Process Outsourcing (BPO) services.
Introduced in 2006 it is too early for a comprehensive impact analysis of the Nenmadi model, yet
early indications are that this public private partnership may distinguish itself in bringing network
infrastructure, services and job opportunities to the “bottom of the pyramid�.
The Nenmadi services are based on transaction per use, which allows a business based on
volume rather than the high up-front costs that other telecenter models have difficulties supporting.
The Karnataka government facilitates the Nenmadi project as part of a build own operate (BOO)
model. Nenmadi (meaning pace of mind) in Kannada language, was coined by the government of
Karnataka. The role of the public sector is limited to providing data and strictly enforcing a
competitively bid, consortium based service level agreement (SLA) that has been established
between the state government and three Indian corporations. The SLA specifies daily hours of
operation, maximum wait time for services and other metrics.
The business model for Nenmadi is based on a combination of support for scaling up the number
of people reached through telecenters –a quantitative scale-up- increasing the scope of activities-
a functional scale up –and improving the organization’s effectiveness and efficiency of its core
services- and organizational scale up. One of the lessons of the Nenmadi is that one without the
others is not sustainable. A company or consortium that has strong values –e.g. to provide
universal access or e-literacy and e-governance services for people in rural areas- but is badly run,
without proper attention to translating values into profits, will plainly do not well. A combination of a
firm commitment to providing multiple services and strong commercial competence gives good
chance of success.
The G2C services include accesing the Record of Rights, Tenancy and Crop Inspection (RTC, land
record) data online and printing out the RTC, food coupons, issuing caste and income certificates,
updating crop data, and utility payments. Fees are derived from a complex revenue model in which
government has fixed different charges for different services, and these vary depending on the
geographical location, season, service and extent of access to the back office databases. Issuing
the RTC electronically has eliminated the village accountant who created, modified and supervised
handwritten manual records and the associated bribes.
What makes Nenmadi from other models that currently exist is that its services are based on
transactions/per use, which allows the proprietary to build a business based on volume rather than
the high up front costs that other models have difficulties supporting. For other private services,
such as ticketing services and topping up pre paid mobile phones the revenue model includes
origination fees and transaction costs.



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From a few experimental pilots, the project is increasing the number of kiosks and numbers of
people reached trough the RBCs.55
(3) MK Connects – Macedonia School Internet Connectivity Case
The third example is the MK Connects case, linking hundreds of schools and other institutions to
stable Internet service in Macedonia. Like many successful IT Projects it evolved easily across
goals, techniques and sponsors. The initial impetus came from a visit by the President of
Macedonia to the People’s Republic of China (PRC) in 2002 and a subsequent offer from PRC of
broad based computer assistance for the school system in Macedonia. With the early help of PRC
and Microsoft, other interested donors became major participants like Government of Macedonia
(GoM), its Ministry of Education and Science (MoES) and the US Agency for International
Development (USAID).
What are ways to provide low cost and sustainable broadband access to elementary and
secondary schools dispersed throughout a developing country? How can policy and regulatory
changes allow for use of new wireless broadband technology solutions and provide broadband
connectivity not only schools but as an initial footprint for connectivity to a larger client base?
Under a telecommunication monopoly, 47% owned by the Macedonian government and 53% by a
Hungarian corporation, and laws which inhibited the “legal� growth of the Internet maker and
Internet Service Providers, the challenge for Macedonia was to develop an Request for Proposal
(RFP) that would not outright deny the participation of larger providers but would encourage
vendors to be innovative in their approach and minimize the participation of MakTel in the overall
scheme of providing broadband connectivity.
The winning bidder proposed a broadband solution for 430 selected schools. The underlying
premise was that the eventual broadband pricing to those schools will be tied to the lowest cost
broadband solution commercially available when the project ends.56 This forced the winning bidder
to place an emphasis on commercial, governmental and home users in order to balance out
expenses. In other words while the schools may provide 40% of the income and utilize 60% of the
resources, the other markets may provide 60% of the income and utilize 40% of the resources. The
vendor building out the network was also required to add three rural schools for every one urban
school location. Based on cost averaging, once the vendor builds the infrastructure to a distant
location in Macedonia it would be no more expensive to deliver a packet from that point than from
an urban center.
The cost of this project was substantial and the results excellent. To leverage the computer
donations from PRC and Microsoft, USAID spent an additional $1,3million in for installing 5.300
computers and 300 printers and another $400K for training 4,000 teachers. This amount does not
include administrative time for any of the participating donors. In addition it became clear that
security insurance, and maintenance costs needed to be considered more carefully, leading to a
more sophisticated approach to gaining agreement at each school for responsibility and for upkeep
and administration of the network.
Leveraging private sector investment, dot-Org, the contractor selected in 2005 to manage the
project for USAID helped create the world’s first national wireless broadband network. The MK


55
  As a measure of the success of the Nenmadi model the proprietary is rolling out in collaboration with other state
governments another 5,000 RBCs in 2009 that will serve approximately 1 million people.
56
  This meant that if a 256K broadband solution is available from another provider for USD 75 a month (unsubsidized by
any government entity) then the schools would pay a similar quantity.
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Connects project officially ended on December 31, 2007. In November 2007 MK Connect was
named a finalist of the third annual W2i Wireless Communities Best Practices Award. Other
measures of success were: dramatic increases in overall Internet use (now at 47%) household
computers (32%) and household connected to the Internet (17%). Over half of the current Internet
users in Macedonia, many of them young people, signed on during the past two years.
A key advantage of this successful deployment of Internet to schools in Macedonia is its scalability.
The aim was to empower both urban and rural areas so the resulting number of users throughout
the country increased the probability of sustaining the initial systems. With hundreds of systems in
place it is easier to trouble-shoot and add features. The contractor for the Project, On Net, reduced
the unit costs significantly.
Why these projects were successful
It is regrettable that the percentage of successful e-government projects worldwide is not higher.
Heek’s estimate of only 15% may be too severe. But the examples describe here before are in that
special group. What characteristics can be found in these three successful projects that distinguish
them from the rest? First, it is crucial to achieve interoperability –both technical and administrative.
The computers have to talk intelligently to each other and so do the affected agencies and
stakeholders. Even in the rural Nangi case, it was essential to have interoperability at the hub
station as well as the dozens of small villages connected to the wireless network. Second, each of
the three cases had a very specific focus with respect to clients, region and technology use. Third,
there was an organized, cooperating cadre of donors which were able to coordinate their activites
toward the major goal. Fourth, there was good publicity in various international media outlets
throughout the life of the projects, not only increasing their credibility, but also ensuring greater
donor support. Fifth, there was recognition that equipment donations involve additional costs that
must be planned for. In the Macedonia case about $2 million additional investment was needed to
leverage the generous donation of computers and software from PRC and Microsoft. Sixth, in each
of these examples it was possible to measure results with reasonable clarity and accuracy. In the
Nepal case, arguably the simplest of the three, the number of villages connected and the hours of
use was a simple but realistic metric. Finally, as mentioned in the introduction, it is crucial for each
stakeholder to appreciate the cui bono question. Who benefits? In the three cases we have cited
the beneficiaries are citizens who are assisted by the systems, not bureaucrats or faceless
agencies.




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Annex I – Examples of MSPs
National policies
The main goal of most national ICT policies is to provide their population with access to basic and
advanced telecommunications infrastructure, while developing an enabling environment for
applications in fields such as commerce, education and health. Although the majority of
government policies have a national focus, limitations in local human and financial resources, as
well as the interest of expanding the impact of ICT projects beyond national borders, has prompted
governments increasingly to work together with their neighbors in establishing regional and
international strategies that address different aspects of the digital divide. Even where the
characteristics of each country’s populations differ, there are still enough similarities in their needs,
interests and concerns to justify regional and international efforts in this area. The Asian
Broadband Project, an action initiated by the government of Japan, is a clear example of this type
of collaborative effort.
International organizations and financial institutions are interested in promoting collaboration
among countries within the same region and between regions to extend the impact of ICT projects
to larger populations and make the most out of scarce financial resources. To achieve this goal,
however, it is necessary also to put emphasis on developing the capacity of stakeholders in
developing countries to participate effectively in international decision-making processes related to
ICTs and development. The Department for International Development (DfID) of the United
Kingdom is promoting such an initiative in East and Southern Africa. The Collaboration on
International ICT Policy for Eastern and Southern Africa (CIPESA), based in Uganda, is part of the
Catalysing Access to Information and Communications Technologies in Africa (CATIA) Initiative
and it aims to build multi-stakeholder policy-making capacity in African countries, particularly in
areas related to ICT and poverty reduction.
National ICT policies and access strategies are increasingly collaborative efforts. Establishing ICT-
related policies is no longer the exclusive responsibility of Information and Communication
Ministries. Ministries of Education, Finance, Commerce, Health, Interior and Culture are becoming
involved in the planning of implementation of different aspects of these policies, including e-
commerce, e-literacy, and e-health projects.
In Hungary, for instance, the Ministry of Informatics and Communications is partnering with the
Ministries of Education and of National Cultural Heritage, as well as with public libraries, public
education institutions and other government bodies in the implementation of four national
programmes related to ICTs: the Public Net Programme, eSignature/ePreserve, the National
Digital Data Archive and the eHungary program. While the Public Net Programme focuses on the
provision of an IT-network to connect public institutions and communal access points (local public
administration organizations falling outside the scope of government IT, public institutions, schools,
other organizations bearing public functions and non-government organizations), the National
Digital Data Archive intends to preserve and diffuse in a digital form the cultural heritage of the
country. The eHungary project also highlights the importance of public-private collaboration, as a
strategy to rapidly expand the access of the population to public Internet access points. To this
end, the Ministry supports various organizations and institutions that already operate, or are
committed to establishing and operating, new communal Internet access points as eHungary


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points. Finally, the eSignature/ePreserve program aims to increase the level of security in the use
of electronic signatures for electronic commerce and public administration business.
Similarly, in Egypt, the Ministry of Communications and Information Technology, in collaboration
with financial institutions, telecommunications operators, Internet service providers, content
providers and civil society, among others, are implementing a comprehensive E-Readiness Plan.
This Plan includes initiatives aimed at increasing the penetration and use of advanced
telecommunication services in Egypt through the expansion of ADSL services, the establishment of
telecentres, the provision of affordable broadband, subscription-free internet connection schemes,
as well as access to affordable personal computers and software.
In order to foster multi-stakeholder partnerships, very often governments include in their national
policies strategies for the establishment of incubators and research programmes that encourage
stakeholders to join forces with them and build an environment propitious for the development of
the information society. In other cases, the stakeholders are invited by the governments to
participate in the development of the ICT strategy plans themselves.
For instance, in Samoa the 2002 National ICT Steering Committee, established to develop ICT
policies and a National ICT Strategic Plan, opened consultations with the broader community
composed of representatives of the private sector, NGOs, mayors at the village level and
presidents of all the woman's committees. The National ICT Strategic Plan that resulted from this
consultation project was adopted by the national Cabinet in August 2004. Cooperation and
consultation processes between governments, business, industry and civil society have also been
used in New Zealand and the Philippines in the development of their Digital Strategy and
Information Systems Strategic Plan respectively.
Finally, it is important to point out that although most national policies initiatives are based on a
trickle-down approach, that is, the benefits of the programme are expected to go from the top down
and eventually reach the general population, some bottom-up ICT initiatives have been so
successful that were later on adopted as national policies and supported by the government. This
is the case of the Window to the Future alliance in Lithuania, a telecentre and capacity training
project that exemplifies two areas in which collaborative strategies of different stakeholders have
been particularly successful.
Example: Making Asia a global information Hub.
On the basis of the “Asian Broadband Programme�, since 2002, an initiative of the Government of
Japan, a wide range of measures have been deployed to bridge the digital divide, to bring the
benefit of ICT to all the people in Asia and to seek their further social, economical, cultural
development. Setting 2010 as the target year, a common goal in Asia is to invigorate information
flows within the region to make Asia a whole global information hub. The Programme aims both at
enhancing technical and infrastructural capacities and diversifying digital content. The goal of the
joint efforts is to increase the volume of information flows between Asia and the rest of the world,
improving at the same time the quality of the information and knowledge shared.
The ambition of the partners involved is manifest—making Asia a leading region in the field of
ICTs, particularly in the development of next-generation mobile communications technology,
paying special attention to strengthened security and other beneficial features. A cultural and
grassroots subset of specific goals is also developed to digitize and archive major cultural assets in
Asian countries.
Fostering the relationship among Asian countries, this Programme’s goals go beyond technical
cooperation and the pure ICT benefits. In the project concept is reflected the awareness of the vital
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importance of building network infrastructure so as to enable all peoples in Asia to access
broadband platforms at an affordable price level in the future. The partnerships formed including
ten Asian economies (namely China, Indonesia, Japan, Republic of Korea, Lao PDR, Malaysia,
Philippines, Singapore, Thailand and Vietnam) are a catalysing agent in the process of enabling all
people in Asia to take advantage of the digital opportunities, while paying special attention to the
needs of developing countries.

Promoting access: telecentres and capacity building
Fostering access to infrastructure should be among the priorities of all governments. In particular,
developing countries look for appropriate measures that would let them enlarge the number of ICT
users. Very often the costs of access to the ICTs significantly exceed the financial possibilities of
the citizens, thereby relegating them to the background of the emerging Information Society.
Telecentres are one popular measure to extend access to ICTs for all, helping to bridge the digital
divide. ITU research has demonstrated that shared access to ICT infrastructure has rapidly gain
popularity among users, in particular in developing and transition economies facing poor ICT
penetration rates. For instance some 83% of Peruvian, 42% of Bulgarian and 36% of Polish
Internet users reported to regularly attend cybercafés in 2002.
Usually telecentres are created under the initiative of public institutions. However, more and more
often, one finds increased participation by the private sector and civil society stakeholders in
setting up of this kind of access infrastructure. The purpose of telecentres can be diverse. Very
often, apart from providing access, the centres provide e-education, foster e-business expansion,
or encourage e-government development.
Increasing access to ICTs is also an important target of international initiatives, such as the
Millennium Declaration and the World Summit for the Information Society. As part of the
international commitment to promote development and connectivity, the International
Telecommunication Union (ITU), together with around 20 other partners, launched on 16 June
2005 the “Connect the World� partnership. The initiative is specifically designed to encourage new
projects and multi-stakeholder partnerships to bridge the digital divide. Connect the World provides
a showcase to promote them and in particular to meet the WSIS commitments, which include
connecting all villages with ICTs and reaching one half of the world’s inhabitants by the year 2015.
There are currently estimated 800’000 villages worldwide with no form of ICT connection.
Connect the World is a true MSP in that the partners cover all the main categories of stakeholder:
      »     Governments: The initial partners include France, Egypt and the Korean Agency for Digital
            Opportunity (KADO);
      »     Business entities: Alcatel, Huawei, Intel, Microsoft, KDDI, Telefónica, Infosys and
            WorldSpace;
      »     Civil Society: Télécoms Sans Frontières, the MS Swaminathan Research Foundation and
            Child Helpline International;
      »     Intergovernmental organisations: ITU, UNESCO, UPU; and other international and regional
            organisations: European Commission, the International Telecommunication Satellite
            Organization, RASCOM and the United Nations Fund for International Partnership (UNFIP).
The partners are all active in one of three broad fields: Enabling environment, infrastructure and
readiness, as well as applications and services.


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It is important to remember that connectivity is just the first pre-condition for access. Once the ICT
tools are within the reach of previously unconnected communities, it is necessary to build local
capacity and heighten awareness of their potential capabilities so that they are customised to the
benefit of those communities. Training and capacity building are thus necessary practices to attain
true access to ICTs.
Training and capacity building activities tend to be more successful when cultural and language
issues are taken into consideration. Some capacity building projects, such as eLang Viet have
realized that the provision of content and training in the local language fosters the sense of
ownership of those who participate in them. Capacity building thus helps not only to raise the level
of know-how knowledge in these communities, but also motivates them to produce their own
content.
There are however social barriers that need to be addressed in order to improve the ability of many
communities to have true access to ICTs. One of these barriers is illiteracy. In many developing
countries, the level of literacy in rural communities and among certain groups especially targeted
for ICT training, such as women, youth, disabled and indigenous peoples, among others, can be
very low, thus limiting their ability to make use of certain ICTs, like the Internet. This is one reason
why, in many countries, e-literacy programmes are being implemented hand-in-hand with projects
to increase the level of literacy of the population. In this sense, ICTs can be used to promote
literacy, while at the same time improving the e-literacy of the population. Finally, it should be
emphasized that many MSP projects focused on capacity training are targeting specific social
groups in an effort to reduce existing inequalities in their access to ICTs; eLang Viet and REACH
Afghanistan are just two examples of this trend.
Example: Lithuania’s bottom-up approach
In some countries, national strategies are created using a bottom-up approach. For instance, in
Lithuania the multi-stakeholder partnership Window to the Future alliance, consisting of Lithuanian
mobile and fixed telecommunications companies, the largest banks, as well as the largest
Lithuanian IT companies, has achieved success in the development of public Internet centres. In
2002, Window to the Future established 72 public Internet centres (PICs). The alliance’s success
encouraged the Lithuanian government to join the alliance and in late 2002 the Ministry of Interior
of the Republic of Lithuania concluded an agreement of cooperation for the creation of an integral
strategy to coordinate the establishment of Internet centres in different locations in Lithuania. The
Consortium worked together with the authorities in approving the allocation of funds for the
establishment of PICs in 2003 and in the selection of 100 PIC from applications received. They
also have announced two open tenders for Internet connection services and the procurement of
hardware.
By May 2004, 175 public Internet access points had been established in cooperation with local
government institutions all over Lithuania. In the meantime, the alliance launched, in cooperation
with the Ministry of Education and Science, a teaching project and a computer-training programme,
to promote the use of the Internet. Within nine months, some 20’000 people had been trained.
Example: Establishing telecentres around the globe
Brazil demonstrates significant experience in fostering the creation of telecentres. Through its
Digital Inclusion Program, the Ministry of Social Development and Fighting Hunger (MDS)
promotes the creation of Telecentres Network requiring installation of telecentres in almost 6’000
Brazilian municipalities, precisely in institutions representing or supporting the micro-enterprise and


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small-enterprise segment, with the purpose of improving competitiveness of the Brazilian
enterprise and the employment and income condition of the population.
MDS’s other programmes encourage Brazilian NGOs and other non-profit civil society
stakeholders in setting up the telecentres in areas with low IT penetration. Interested institutions
and organizations fulfilling required conditions may receive a donation in the form of 10 computers
each. In 2004, there were 137 applicants that met the conditions.
Moreover, the Brazilian Ministry of Development, Industry and Trade (MDIC), in cooperation with
the Brazilian Army, is equipping 34 posts along Brazil’s Amazon border zone intends to trigger self-
sustainable development of telecentres in order to provide the people of these communities access
to the Web, as well as IT training. The Brazilian government encourages the private entities from
this region to donate hardware in exchange for becoming a partner institution of Brazil’s Hunger
Zero Program, thus becoming tax-exempt and contributing to fostering social mobilization within
the business and industrial sectors.
The Republic of Colombia sees the creation of telecentres as an effective way for enlarging the
Colombian Information Society. In the framework of Compartel (Social Telecommunication
Programme), the Ministry of Communications, inter alia, intends to install 1’097 telecentres in
metropolitan areas and 309 telecentres in rural areas with more than 1’700 inhabitants. In this way,
once the programme is complete, approximately 4.7 million citizens will benefit from access to
ICTs. The development of the new infrastructure requires an investment of USD 58 million, which
is being covered by public funds, as well as the Communication Fund.
Also, Romania recognises the great importance of telecentres for bridging digital divide. In 2004
the National Regulatory Authority for Communications developed the “Multipurpose Community
Telecentres� (MCTs) project in order to foster availability of affordable electronic communications
throughout the territory of Romania. Nowadays the telecentres are financed through contributions
of the operators and ITU. However for each of the MCTs, it is planned that financial self-sufficiency
should be reached within three years. Over time, the responsibility of the operation of the
telecentres should be gradually taken over by local communities.
Sudan’s experiences demonstrate that the initiative of setting up telecentres can also come from
the private sector. SUDATEL, Sudan’s incumbent telecom company, in cooperation with many
public and private institutions, international donors, and community organizations, has developed
telecentres to provide access to ICTs, particularly in remote and rural areas. Telephony is
overwhelmingly the main service, however, other services are offered, especially fax, Internet,
telemedicine, tele-education as well as photocopying.
Example: LangViet (e-Vietnamese Village)
Vietnam is one of the Asia-Pacific economies experiencing both the development divide in relation
to economically advanced countries and an internal digital divide. The complex ethnic mosaic of
the country as well as the wide gap in revenues sets forth a premise for traditional social
fragmentation. Disparities between rich and poor, between rural and urban population as well as
between grass roots communities are tangible in terms of educational level, health status, quality
of life, access to resources, and respectively to job opportunities and high income.
In order to intervene efficiently in this difficult context, UNCTAD and UNDP, under the Global
Programme on Globalisation, Liberalisation and Sustainable Human Development have taken up
the challenge of addressing the issue of overall social development through the creation of an
online network based on easy-to-understand Vietnamese-language know-how in health, education,
agricultural production, crafts and trade. Information and knowledge can be accessed by the
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poorest sections of Vietnamese society through computers based in specially developed
community telecentres. In addition, the local grassroots community is provided with relevant IT
training in order to awaken their curiosity and enhance their creativity and potential of autonomous
action. The beneficiaries of the project are urged to take advantage of the facilities offered while
bringing them the awareness of the value of the skills learnt to make their own decisions and
choose their future personal and professional development. This approach can assure a
sustainable and fruitful outcome of the project activities.
eLangViet operates initially in eight pilot villages with population of about 70’000 persons spread
across six provinces. This pilot stage will last for two years before the network is rolled out across
the provinces and then the country, based on the lessons learned. A further goal of the future
deployment of the project at the national level would be to strengthen Vietnam’s domestic markets,
contribute to the improvement of the general welfare and lead targeted coherent action for poverty
reduction.
Example: REACH Afghanistan (Radio Education for Afghan Children)
Developed to help address the educational needs of Afghan children aged from 6 to 16 who, due
to conflict, have received little or no education for many years, REACH Project is designed to
bridge the considerable educational gap. It is hoped that, by listening to the weekly radio
programmes on BBC World Service's Persian and Pashto Services at home, children will be
exposed to Afghanistan's traditions, culture, and history, as well as receive information about
present-day concerns such as mine awareness and health education. The 15-minute Our World,
Our Future series are designed to broaden children's horizons and encourage them to become
active learners, by giving them tasks to do during and after the programmes that will stimulate
learning. Without having the role to replace formal education, the programme series are conceived
to complement it and stimulate young listeners to go further in their studies as well as in their active
understanding of their immediate and global environment. Partners of BBC's Afghan Education
Project (AEP) in this initiative are the UK Department for International Development, UNICEF and
the Canadian International Development Agency (CIDA).

ICT Applications
In line with technological progress as well as broadening connectivity, ICTs offer more and more
application opportunities. In this way the scope of possible social and economic benefits to be
reaped from ICTs increases over time, often transforming ICTs into one of most important
determinants of sustainable development. Many ICT applications have no commercial character
and from the very beginning require fully or partial involvement of the public institutions as well as
public funds to thrive. The potential benefits and positive spill-over effects of these applications in
other sectors of the economy have encouraged governments to foster their development through
initiatives such as e-government, e-learning, e-health, e-employment, e-environment, e-science.
Sometimes even e-business or e-agriculture, belonging to the main potential fields for commercial
applications, are funded by the public sector on a seed funding basis, leading to eventual self-
sustainability.
Nevertheless, it is difficult to deny the importance of multi- stakeholder partnerships for the
development of ICT applications, particularly in the case of developing countries, where MSPs are
possibly one of the most important drivers of their implementation. The heightened importance of
MSPs in developing countries is due to several factors:



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      »     Firstly, public funds may be too scarce to bear all costs of implementation of innovative
            applications. In particular in developing countries, confronted with high expenses for
            development related matters, governments may be motivated to rely on private capital in
            order to fulfill the tasks entrusted to the state. From this perspective, each participation of
            multilateral organizations or private sector in development of ICT applications may be
            highly appreciated.
      »     Secondly, the development of ICT applications, particularly in developing countries,
            sometimes involves high investment risk that may exceed the financial potential of local
            innovators. Involvement of governments and multilateral organizations in the ICT
            application related projects may lead to the diminishing the investment risk and can have
            tangible impact on sustainable development of ICT application sector.
      »     Thirdly, the multi-stakeholder partnerships foster knowledge diffusion. One should expect
            that international MSPs, in particular, should be fruitful in terms of the import of best
            practices from the foreign countries and should contribute to accelerated human-capacity
            building. However the role of national MSPs should not be undervalued. In this way the
            international MSPs can contribute to development of the digital sector in developing
            economies.
      »     Fourth, fostering MSPs that focus on the development of ICT applications contributes to the
            enhanced innovation dynamics. Since the MSPs bring together parties of different origin,
            very often well informed about local needs, the ICT applications can achieve a higher rate
            of successful implementation.
      »     Fifth, development of ICT applications by MSPs that involve international partners, such as
            multilateral organisations, international business entities, or even international civil society
            stakeholders, fosters the internationalisation process. Very often the national partners will
            go beyond purely national approaches.
      »     Sixth, MSPs foster development of the local e-content. In particular, in the case of
            developing countries, the question of the preservation of national culture and heritage is an
            important issue as together with the accelerating internationalisation process the influence
            of the other cultures can be pervasive.
The use of multi-stakeholder partnerships strategies in projects aiming at bridging the digital divide
is already making a difference around the world. Although the partners and their contributions may
differ from one project to another, all of them have in common the interest of sharing knowledge,
resources and competencies to increase access to ICTs. It is clear that the ultimate goal of
promoting development and fulfilling the MDGs can only be achieved through collaboration.
Examples: ICT Applications in selected economies
In Azerbaijan, the Ministry of Communication and Information Technologies (MCIT) in partnership
with United Nations Development Program (UNDP), has developed the National e-Governance
Network Initiative. It supports efficiency, transparency and accountability in the public sector
through the rapid and coordinated expansion of e-governance systems, and policies that enable
them, to contribute to the delivery of services and protection of rights. The project consist of four
key outputs: a) the creation of a National Internet Infrastructure and e-Government Network; b)
establishment and adoption of a Civil Service Code of Practice on privacy and protection of data,
and security of state computer systems; c) appropriate training of trainers to ensure widespread
compliance with the Civil Service Code of Practice throughout all levels of governments; and d) the

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creation of a top level government information portal, and pilot Citizen-to-Government information
access kiosks in six regions of the country.
In Egypt, the ICT Trust Fund, in cooperation with UNDP as well as other partners including private
companies sponsoring the portal and NGOs using and it and supplying content, have developed
The Community Knowledge Generation E-Library Initiative (CKGeL) The objective of this project
was to create electronic libraries and establish a mechanism that will enable information gathering,
validation and maintenance that is relevant to local communities and can be provided in digital
format. This facilitates its dissemination to end users digitally and, when necessary, in printed
format, using traditional or “print-on-demand� techniques. Additionally, this project defines a
strategy for stimulating local knowledge generation, fostering research capabilities using ICT at the
school or community level. It will also provide tools for machine translation and text-to-speech in
Arabic language, in order to enable access to information stored in the E-Library to the illiterate,
blind and physically impaired.
In Pakistan, the Ministry of Information Technology IT & T Division, in partnership with many
stakeholders, has developed the portal Pakistan Health Information Online (Health Information
Resource Centre). The purpose of this project is to establish an online repository of reliable, timely
and easily accessed health information generated within the country and abroad to all health
professionals, researchers, policy-makers and planners through one website. This health
information includes the directory of health research, health studies and databases of hospitals and
doctors of Pakistan, full text of 29 Pakistani journals, surveys and reports etc. It also aims to
promote IT knowledge to the health professionals through training on specially designed computer
software for data compilation and its electronic conversion. All this information is envisioned to be
disseminated through a web portal. It is also planned that major libraries within the country will be
linked to this portal.
In Romania, the Ministry of Communications and Information Technology in partnership with the
Ministry of Health has created a health portal that provides a unique entry point in terms of
information related to health sector services, and is available both to patients and medical staff. It
secures the online presence of institutions in the medical field and facilitates communication
between medical staff both within the country and abroad. Through providing for basic information
on diseases, treatment, medicines etc, the project will increase the importance of preventive
medicine and will contribute to the reduction of administrative and social costs of diagnosis and
offering treatment.
In Thailand, the National Electronics and Computer Technology Centre in partnership with the
Japanese Centre of International Cooperation in Computerization (CICC), is working on Automatic
Web Translation Services. This project aims to develop English-to-Thai and Thai-to-English
computer-based translation service on the Internet. Since 1996 NECTEC has been developing a
language translation system with the CICC. This project serves as a lab model and provides
information on studies related to language translation machines.
Examples: ICT applications in selected inter-governmental organisations
FAO (Food and Agriculture Organization of the United Nations), in close cooperation with many
regional partners, has created the Farmer Information Network (FarmNet), which is a conceptual
model for using the new ICTs for agricultural and rural development. It aims at creating a network
of rural people, supported by intermediary organizations such as extension services, using ICTs
and conventional media to facilitate the generating, gathering and exchanging of knowledge and
information. FarmNet projects are ongoing in Bolivia and Namibia with projects in the pipeline for
East Africa and Latin America.
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The International Trade Centre (UNCTAD/WTO) in partnership with local chambers of e-
commerce, is promoting the e-Business Forum. Regional e-Business Forums concentrate on
exploiting emerging e-business opportunities and applying new technologies to promoting trade. E-
Business Forums establish dialogue between export managers and strategy makers with
responsibilities to promote international e-business. They combine learning, expertise sharing,
interactive dialogue, networking, and business matching in a unique manner.
ITU (International Telecommunication Union), in cooperation with many regional partners from
developing countries, has been promoting Electronic Commerce for Developing Countries for more
than five years. ITU provides technical assistance in the implementation of e-business. Projects
have been implemented in Africa, Asia, Latin America and Arab Region. Five regional seminars on
e-business have been organized to address regional technology policy issues and strategies for e-
business. ITU also provides direct assistance to developing countries in e-business technology
policies and strategies.
UNCTAD (United Nations Conference on Trade and Development) is conducting consultations with
key players of the tourism sector in order to create a Partnership on E-tourism. As tourism is an
information-intensive service, the UNCTAD e-tourism initiative is designed to give developing
countries the technical means to promote, market and sell their tourism services online.
UNESCO (United Nations Educational, Scientific and Cultural Organisation), in partnership with the
National Informatics Centre (NIC) and Indian Open Knowledge Network (OKN), has developed a
new software tool—Open eNRICH—which is a free and open source software programme for the
creation and exchange of locally relevant knowledge within and between communities in
developing countries.
The UN Economic Commission for Africa (UNECA) has developed the project VARSITYNET:
Enabling Innovations in the Information Society through Research and Development. VarsityNet
programme builds fosters cooperation in R&D programmes and exchange of know-how. Projects
supported by the Ford Foundation are taking place in the Inter-University Council for East Africa
(IUCEA) and the Addis Ababa University (AAU). These are E-government Services and African
Language Development. The former aims to contribute to improving efficiency and effectiveness in
managing data and information within the administration of a regional institution, the IUCEA. The
latter is based on the use of an African language in enabling greater access by to government
services at a grassroots level. Both are using open source as a key element.




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Annex J – Mitigation actions




                                                                                   Figure 47 - List of actions: general and specific to the kind of project




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                                    Project Planning and Implementation Risks – Local assistance to project partner

                                                                »   Project failure due to mismanagement of local resources
                                                                »   Lack of knowledge of project evolution; problems grow without resolution
                 Consequences
                                                                »   Possible absence of technical or management skills in the local partners
                                                                »   Disagreements between stakeholders; specially if conditions are not clear

                                                                » Continuous communication between participants and fast resolution of
              Mitigation actions                                  problems, mainly technical ones
                    to take                                     » Periodic reports (weekly) and meetings (monthly)
                                                                » Integrated teams with local and foreign specialists

                                                                »   Provincial staff should manage day on day and report to unified committee
                      Vietnam’s                                 »   For all the projects should be specialist staff present in Vietnam
                     applicability                              »   Transaction of technical and mgt knowledge should be encouraged
                                                                »   Program management collaborative between local & foreign institutions
                                                                                                     ICT Infrastructure
                    Project Type                                                           ICT Applications and Services
                       Scope                                                                            eGovernment
                                                                                         Human Resources and Capacity
                                                                           Figure 48 - Local Assistance to project partner – Consequences and mitigation actions




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                    Project Planning and Implementation Risks – Implementation Phase and Change Management

                                                               »    People don’t get used to the new technology or service
                                                               »    Economic failure and profitability loss
                 Consequences
                                                               »    Loss of interest in new technologies by citizens; no perception of value
                                                               »    Perception of failure by the administration

                                                               »    Previous to the implementation, citizen needs should be clearly stated
             Mitigation actions                                »    Prescription of commercial objectives and subsequent profitability
                   to take                                     »    Communication to citizens of benefits derived from the new technology
                                                               »    Subsidized revenues schemes to ease access

                                                               »    Local partner will be critical to evaluate the business case
                     Vietnam’s                                 »    Great focus should be placed in communication of benefits
                    applicability                              »    Pilots will be critical so as to detect reaction of early users
                                                               »    Transitions between technologies should include new-for-old changes
                                                                                                  ICT Infrastructure
                   Project Type                                                          ICT Applications and Services
                      Scope                                                                          eGovernment
                                                                                       Human Resources and Capacity
                                                                        Figure 49- Implementation Phase and Change Mgt – Consequences and mitigation actions




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                                                         Network & IT Infrastructure Risks – Training and hand-off

                                                          »    Lack of knowledge in local staff to exploit the infrastructure or service
                                                          »    No continuity of delivery of service to citizens or users
            Consequences
                                                          »    Lack of maintenance and operation of the network
                                                          »    Absence of capacity to improve the

                                                          » Multinational teams during implementation to ease knowledge transfer
         Mitigation actions                               » After the project, there should continue the communication between
               to take                                      stakeholders to solve issues which come up after finalization
                                                          » Formation and learning provided to local workers and staff

                                                          » In HR capacities building, there should be programs to diffuse knowledge
                Vietnam’s                                   on technologies, services and applications being deployed in the country
               applicability                              » Agreements with foreign partners assigning time and budget to formation
                                                          » Progressive hand-off and increasing responsibility of the local team
                                                                                                  ICT Infrastructure
               Project Type                                                             ICT Applications and Services
                  Scope                                                                               eGovernment
                                                                                       Human Resources and Capacity
                                                                                   Figure 50 - Training and hand-off - Consequences and mitigation actions




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                                                          Network & IT Infrastructure Risks – Financial sustainability

                                                             » Projects usually focused on delivery and not on profitability
                                                             » No possibility of continuity of the operation of networks due to financial
               Consequences
                                                               reasons
                                                             » Loss of interest of foreign stakeholders to further invest in the country

                                                             » Clear definition of the business case
            Mitigation actions                               » Marketing plan and revenues stream should be defined in any project
                  to take                                      proposal
                                                             » Possible use of subsidies to guarantee investment sustainability

                                                             » Joint study between Vietnam’s public sector, private sector and
                   Vietnam’s                                   international donors and enterprises to evaluate this factor
                  applicability                              » Clear contractual prescription of, if any, government help
                                                             » Replacement formulas to improve interest of citizens and users
                                                                                                     ICT Infrastructure
                  Project Type                                                             ICT Applications and Services
                     Scope                                                                               eGovernment
                                                                                          Human Resources and Capacity
                                                                                   Figure 51 - Financial sustainability - Consequences and mitigation actions




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                                                         ICT Applications and Services Risks – Management contract

                                                              » Lack of clarity regarding responsibilities of the stakeholders in the
                                                                partnership
                Consequences
                                                              » Difficult investment schemes hardening relationships between stakeholders
                                                              » Unclear definition of times and deadlines

                                                              » Definition and agreement of percentages of revenues and ownership
            Mitigation actions                                » Clear definition of the juridical nature of the partnership
                  to take                                     » Definition of technical, commercial and management responsibilities of the
                                                                members of the consortium

                                                              » In Vietnam’s case, given the complexity of its investment regulatory
                    Vietnam’s                                   environment, great clarity should be enforced in the contractual terms
                   applicability                              » Clear definition of the different members of the consortium, specially in the
                                                                case of mix of private and public, local and foreign, entities
                                                                                                     ICT Infrastructure
                  Project Type                                                             ICT Applications and Services
                     Scope                                                                              eGovernment
                                                                                         Human Resources and Capacity
                                                                                   Figure 52 – Management contract - Consequences and mitigation actions




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                                                                            eGovernment Risks – Demand identification

                                                               » Offering not demanded applications, leading to their under utilization
                                                               » Not identifying demand correctly usually leads to the proposal of
                 Consequences
                                                                 complicated applications, beyond the needs of users and citizens
                                                               » Identify demand correctly lets determine the proper technology to be used

                                                               » Technical feasibility analysis to understand the technologies available to
             Mitigation actions                                  citizens
                   to take                                     » Specifications description in collaboration with citizens
                                                               » Pilot programs to wholly understand and identify needs of lead users

                                                               » Vietnam’s provinces could benchmark those initiatives in other provinces
                     Vietnam’s                                   which have resulted in success
                    applicability                              » Services dedicated to corporations could be used as pilots before the
                                                                 extension to the common of citizens
                                                                                                      ICT Infrastructure
                   Project Type                                                             ICT Applications and Services
                      Scope                                                                              eGovernment
                                                                                          Human Resources and Capacity
                                                                                   Figure 53 – Demand identification - Consequences and mitigation actions




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                                                                                   eGovernment Risks - Awareness

                                                           » Citizens not having knowledge of the applications available to them
                                                           » Misuse of the applications and services provided by the Government
             Consequences
                                                           » No relationship between Government and citizens to improve, modify and
                                                             adapt applications

                                                           » Communication campaigns to approach citizens and gain their interest
          Mitigation actions                               » Provincial pilots before extension and deployment to the rest of the country
                to take                                    » Disposal of terminals in official places to get citizens accustomed to the use
                                                             of new technologies in their relationship with the Government

                                                           » Successes in some provinces could be strongly publicized and easily
                 Vietnam’s                                   diffused
                applicability                              » Use of web portals to integrate and accommodate a variety of applications,
                                                             and letting the citizen familiarize with the environment
                                                                                                ICT Infrastructure
                Project Type                                                          ICT Applications and Services
                   Scope                                                                           eGovernment
                                                                                     Human Resources and Capacity


                                                                                     Figure 54 - Awareness - Consequences and mitigation actions




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                                 Human Capacity and Resources Risks – Skills development and training component


                                                                » Lack of managerial capabilities
                  Consequences                                  » Lack of technical capabilities
                                                                » Lack of commercial capabilities

                                                                » Formation in Universities to engineers, consultants and professionals
               Mitigation actions                               » Formation by private institutions in exchange for making business in the
                     to take                                      country
                                                                » Formation by international public donors

                                                                » In Vietnam’s case, it is particularly relevant to promote formation in
                      Vietnam’s                                   managerial capabilities in the provinces
                     applicability                              » A central placement to share experiences across people from the provinces
                                                                  would be adequate in this case
                                                                                                   ICT Infrastructure
                     Project Type                                                        ICT Applications and Services
                        Scope                                                                         eGovernment
                                                                                        Human Resources and Capacity

                                                                     Figure 55 – Skills development and training component - Consequences and mitigation actions




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Annex K – T-Plan Roadmapping Methodology
Roadmapping
Roadmapping is a tool which permits the user to show in a certain time horizon present
technologies in a determined corporation and the different technological options to be developed or
acquired in the future. These options should be aligned with products and services satisfied by
them, improving this way decision making.
It’s usually designed TRM (Technology RoadMapping) the process of defining that evolution, while
the word Roadmap usually designs the graphical result of the process. Figure 56 shows the
process:




                                                     Figure 56 - Technology Roadmapping Description


A TRM is supposed to have several characteristics:
      »     It’s a useful planning for all the areas which add up to the development and fabrication of a
            determined product.
      »     It must treat explicitly time. The analysis is not completed if there is no temporal guideline.
      »     It should articulate in an integrated way the strategy, market evolution and technological
            evolution.
      »     It should show product gaps and needed technologies, identifying improvement areas.
      »     It helps to prioritize investments.
      »     It helps in the definition of realistic and competitive objectives, helping out in the
            diversification of the products offering.
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      »     It is in itself a guideline for teamwork, which helps it to detect risks and minimize their
            impact.
      »     Sharing roadmaps allows for the strategic use of technologies, throughout products line.
      »     It’s an element which allows communication between team members, managers, clients
            and investors.
      »     It facilitates communication between development teams and coordination amidst their
            members.
A TRM should always answer several questions:
      »     Why. Understand markets, identify partners and competitors and fix the strategic approach.
      »     What. Architecture definition, characteristics, challenges and temporal evolution.
      »     How. Identification of the most important technologies, Investment in multi-generation
            technologies.
      »     What to do. Resources and investments. Project planning following needs. Investment in
            key areas. Identification and assessment of risks.
      »     When. Which moment to acquire technology, develop investigation or stop. When to initiate
            activity. When to launch product to market.



T-Plan Methodology
T-Plan Methodology uses a top down approach which analyses from client needs to the plan to
satisfy them, as shown in Figure 57.




  Market
                                             Product                               Technology                  Itinerary
  • Performance Indicators
                                             • Product characteristics             • Technological solutions   • Relationship between future
  • Market and business drivers
                                             • Grouping                            • Grouping                  market needs and technological
  • Prioritization
                                             • Impact ranking                      • Impact ranking            Solutions
  • SWOT
                                             • Gaps                                • Gaps                      • Gaps
  • Gaps




                                                         Figure 57 - T-Plan Methodology Description


It’s a tool developed in the context of an investigation program in which more than twenty industrial
roadmaps were developed. A guide was developed to address the following aims:
      »     Help corporations in the application of TRM.
      »     Establishes key links between technological resources and management.
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      »     Identifies gaps in market, product and technology.
      »     Establishes a first vision on the Technological Roadmap.
      »     It supports technological strategy and helps out in the definition of planning in the
            corporation.
      »     It supports communication between the technical and commercial staff in the corporation.
The design of the itinerary answers to the definition of objectives in the long term aligned to the
strategic plan of a determined corporation. This way, the itinerary begins with business needs
which must be fulfilled, identifying subsequently products, technologies and finally harmonizing all
them along the time.
Three first stages center their attention in the three main layers of an itinerary while the fourth
describes their aligning in time.

T-Plan Methodology Personalization
The diversity of objectives and capacities in corporations makes it necessary to personalize the T-
Plan Methodology. The objectives can be production planning, new opportunities exploration,
resources management or improvement of business strategies. Capacities can differ in the internal
organization, organizational culture, resources, technologies and geographical placement.
The restrictions which will define the focus of the roadmap are:
      »     Problem owning. Definition of the problem, method to use and objectives.
      »     Scope definition. Limitation of the problem.
      »     Focus to use.
      »     Aims. Objectives in the middle and long term. They serve as feedback purposes.
      »     Resources. Time, effort and money.
      »     Participants.
      »     Information sources.
Changes are usually made in the architecture and process of the roadmap:
      »     Architecture.
                  o     Changes in time scale.
                  o     Changes in model layers.
      »     Roadmap process.
                  o     Macro level. Tasks to be performed.
                  o     Micro level. Agenda of the roadmap meetings.



T-Plan Methodology applied to Investment Planning in Vietnam’s ICT
In this case, the methodology has been personalized due to the character of the discussion. This
way:
      »     Changes in time scale. 15 years. 2010-2025.
      »     Changes in model layers. Instead of the structure market-product-technology aligned in
            time it has been decided a structure Trends-Demands-Investment Areas.
                  o     Trends could be understood as market needs to be previewed.

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                  o     Demands is identified to the exact requisites derived from trends
                  o     Investment Areas take the place of technologies as the tools which will satisfy
                        demands and anticipate trends
         Figures 58 through 65 show the process followed for the generation of the Roadmaps from
         the relationship between trends, demands and investment areas to their introduction in the
         different roadmap charts.




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                                   Trends                                                              Demands
                                                                                                                                                        Investment Areas
      Factor                            Description                                 Factor                     Description
                                                                                                   Automatic systems to manage remotely low
        Society                        Automation of activities                       Society
                                                                                                              added cost activies
                                                                                                                                                               E-Agriculture



        Society           Interest in entertainment through the Internet              Society     Gaming, video over the Internet, entertainment




                                                                                                                                                                                        Around 2010
                                                                                                        Evolution of regulation to gain full
       Economy                      Deregulation & liberalisation                    Economy
                                                                                                      competitiveness for national investors


                                                                                                   Regulation on investments focused on taking
       Economy                          International openness                       Economy        advantage of cooperation with international
                                                                                                                      corps


                                                                                                                                                       Administration simplification,
        Politics         Electronic management of ops by Government                   Politics       Extension of online tools for Government
                                                                                                                                                       Public Key Infrastructure, G2E


                                                                                                     First systems to relate Government and             Business Tax Management
        Politics                   eGov oriented to corporations                      Politics
                                                                                                                   corporations                                 Systems

                                                                                                     Agreements with foreign institutions for             Development of Project
          HRs               Knowledge supplied by foreign institutions                  HRs       development of ICT in Vietnam and extension             Management Skills and
                                                                                                         of knowledge and technology                           Certification
                                                                                                                                                         Promotion of terminals in
                                                                                                  Use of Universities and schools to contribute to
          HRs                 Development of the “digital generation�                   HRs
                                                                                                    the diffusion of ICT knowledge in students
                                                                                                                                                            schools and colleges
                                                                                                                                                       ICT for Education and Lifelong




                                                                               Figure 58 - Relationship between trends, demands and investment areas - 2010

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                                Trends                                                               Demands
                                                                                                                                                        Investment Areas
   Factor                            Description                                   Factor                   Description
                                                                                                    Mobile devices, increased coverage,
     Society                     Growing demand for mobility                        Society
                                                                                                             downsized prices
                                                                                                                                                        Wireless BroadBand Access




                                                                                                                                                                                       Around 2015 (1)
     Society           Extension of coverage to the poorest regions                 Society          Total extension of ICT to all regions



                       Extension of technology and portable devices
     Society                                                                        Society                  Integrated devices
                                  throughout the citizens


                                                                                                  From the openness of competition and to
    Economy                  Growing competence in ICT sector                      Economy         foreign players reaching a competitive
                                                                                                       environment of full competition


                                                                                                  Attractive environment in Vietnam to make
    Economy                   Increasing investments in Vietnam                    Economy
                                                                                                           foreign corporations invest


                       Progressive use of ICT to gain efficiency and                              Massive introduction of ICT in businesses,           Rollout of broadband networks
    Economy                                                                        Economy
                                    competitiveness                                                        colleges and hospitals                         in schools and colleges




                                                                             Figure 59 - Relationship between trends, demands and investment areas – 2015 (1)


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                                   Trends                                                              Demands
                                                                                                                                                         Investment Areas
      Factor                            Description                                 Factor                    Description
                                                                                                     Coming out of the first systems to relate         Land and property management
        Politics                      eGov oriented to citizens                       Politics
                                                                                                           Government and citizens                                system




                                                                                                                                                                                            Around 2015 (2)
                                                                                                                                                        Business Community Portals
                                                                                                     Gov launches social networking sites for
        Politics                eGov Social Networks Corporations                     Politics
                                                                                                            corporations to get along
                                                                                                                                                       eGovernment infrastructure and
                                                                                                                                                              interoperability
                                                                                                                                                        Deployment of Provincial DCs
                                                                                                       Extensive use of eGov systems and
        Politics                 Use of eGov applied to provinces                     Politics                                                         Training and skills projects on e-
                                                                                                 applications throughout provinces governments
                                                                                                                                                                 Government

                                                                                                   Interchange programs of people from and to
          HRs                        Increase of migration fluxes                      HRs
                                                                                                           Vietnam to gain knowledge



          HRs                        Growing population in cities                      HRs                 Growing population in cities



                                                                                                   Growing interest in the use of ICT in industry      Training and skills development
          HRs                     Transfer to industry and services                    HRs
                                                                                                  and services to gain efficiency and productivity     associated to ICT infrastructure




                                                                             Figure 60 - Relationship between trends, demands and investment areas – 2015 (2)


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                                  Trends                                                               Demands
                                                                                                                                                         Investment Areas
     Factor                             Description                                 Factor                    Description
                            Increasing concern for health, safety and                                Environmentally compliant devices and                        e-Health
        Society                                                                       Society
                                            security                                                               networks                                    e-Environment


                                                                                                                                                            ICT for Businesses
        Society                Increased mobile and home working                      Society                    Online Working
                                                                                                                                                       Deployment of All-IP Networks




                                                                                                                                                                                         Around 2020
                              Full extension of ICT use in Vietnam’s
                                                                                                  Introduction of ICT in activities throughout the      Rollout of alternative network
       Economy               corporations, including low value added                 Economy
                                                                                                           different sectors in Vietnam                        infrastructures
                                             activites

                                                                                                    Strengthen Vietnamese companies through
       Economy            International expansion of Vietnamese corps                Economy       legislation and taxes to make them compete
                                                                                                                      abroad


                                                                                                   Gov launches social networking sites for the              e-Social Services
        Politics                  eGov Social Networks Citizens                       Politics
                                                                                                   sharing of opinions, interest and knowledge         Online income tax applications


                                                                                                  Extension throughout universities and schools
        Politics               e-learning in schools and universities                 Politics
                                                                                                     of e-learning applications and services

                                                                                                                                                       Training and skills development
                                                                                                     Extensive use of ICT in businesses and
          HRs                           More skilled workforce                          HRs
                                                                                                     corporations to take advantage of staff
                                                                                                                                                          associated to ICT Apps &
                                                                                                                                                                  Services


          HRs                   Development of Knowledge Society                        HRs            Development of Knowledge Society




                                                                               Figure 61 - Relationship between trends, demands and investment areas – 2020


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                                      Trends                                                              Demands
                                                                                                                                                      Investment Areas
          Factor                            Description                                Factor                   Description

            Society                          Social life extended                        Society            Social Life and Web Evolution




                                                                                                                                                                         Around 2025
                                                                                                      Appliance of e-Environment to improve the
           Economy           Extensive use of ICT in e-Environment issues               Economy
                                                                                                        compliance with environmental issues
                                                                                                                                                         e-Environment


                                                                                                      Provinces governments share data to gain
            Politics              Integration of eGov between provinces                  Politics
                                                                                                       advantage of knowledge and information


                                                                                                      Progressive sharing of sanitary information
            Politics                                e-Health                             Politics                                                             e-Health
                                                                                                      throughout hospitals and medical facilities



              HRs               Increasing gap between wealthy and poor                   HRs          Increasing gap between wealthy and poor



              HRs                            Maturing population                          HRs                    Maturing population




                                                                               Figure 62 - Relationship between trends, demands and investment areas – 2025


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                                                       2010                                        2015                                         2020                                        2025

                Society                                                   Growing demand for mobility                 Increasing concern for health, safety and security



                                             Automation of activities                    Extension of coverage to the poorest regions              Increased mobile and home working


                                                                                                   Extension of technology and portable devices throughout
                                               Interest in entertainment through the Internet                                                                                Social life extended
                                                                                                                         the citizens
                Economy




                                           Deregulation & liberalisation                            Growing competence in ICT sector



                                                 International openness                        Increasing investments in Vietnam             International expansion of Vietnamese corps
     Trends




                                                                Progressive use of ICT to gain efficiency       Full extension of ICT use in Vietnam’s corporations,       Extensive use of ICT in e-Environment
                                                                         and competitiveness                             including low value added activites                              issues



                                  Electronic management of ops by
                                                                                    eGov oriented to citizens                  eGov Social Networks Citizens
                 Politics




                                             Government

                                                                                   eGov Social Networks
                                                                                                                      e-learning in schools and universities                           e-health
                                                                                      Corporations


                                                      eGov oriented to corporations                   Use of eGov applied to provinces                   Integration of eGov between provinces




                                          Knowledge supplied by foreign institutions                      Increase of migration fluxes                      More skilled workforce
                 HRs




                                                                                            Growing population in cities                           Increasing gap between wealthy and poor             Maturing population



                                    Development of the “digital generation�                    Transfer to industry and services                 Development of Knowledge Society




                                                                         Figure 63 - Trends layer of Atos Consulting Roadmap on Investment Planning in Vietnam


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                                                       2010                                         2015                                       2020                                         2025
                                                                Mobile devices, increased coverage, downsized
                                                                                                                    Environmentally compliant devices and networks
                                                                                     prices
                Society
                              Automatic systems to manage remotely low added
                                                                                              Total extension of ICT to all regions                            Online Working
                                               cost activies


                                              Gaming, video over the Internet, entertainment                           Integrated devices                              Social Life and Web Evolution
                Economy




                                       Evolution of regulation to gain full              From the openness of competition and to foreign players
                                     competitiveness for national investors               reaching a competitive environment of full competition

                                    Regulation on investments focused on taking             Attractive environment in Vietnam to make     Strengthen Vietnamese companies through
                                  advantage of cooperation with international corps                 foreign corporations invest       legislation and taxes to make them compete abroad
     Demands




                                                                                                                Introduction of ICT in activities throughout the       Appliance of e-Environment to improve the
                                                               Massive introduction of ICT in businesses
                                                                                                                          different sectors in Vietnam                   compliance with environmental issues



                                     Extension of online tools for           Coming out of the first systems to relate Gov launches social networking sites for the
                 Politics




                                            Government                             Government and citizens             sharing of opinions, interest and knowledge

                                                                              Gov launches social networking Extension throughout universities and schools           Progressive sharing of sanitary information
                                                                             sites for corporations to get along of e-learning applications and services             throughout hospitals and medical facilities

                                                 First systems to relate Government and        Extensive use of eGov systems and applications         Provinces governments share data to gain
                                                              corporations                           throughout provinces governments                  advantage of knowledge and information


                                Agreements with foreign institutions for development of ICT          Interchange programs of people from          Extensive use of ICT in businesses and
                                  in Vietnam and extension of knowledge and technology                 and to Vietnam to gain knowledge           corporations to take advantage of staff
                 HRs




                                                                                            Growing population in cities                          Increasing gap between wealthy and poor              Maturing population


                                Use of Universities and schools to contribute to       Growing interest in the use of ICT in industry and
                                                                                                                                                Development of Knowledge Society
                                  the diffusion of ICT knowledge in students             services to gain efficiency and productivity


                                                                       Figure 64 - Demands layer of Atos Consulting Roadmap on Investment Planning in Vietnam




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                                                                  2010                                       2015                                      2020                                       2025



                                        Infrastructure
                                                                                Wireless BroadBand Access                                             Deployment of All-IP Networks



                                                                              Deployment of Provincial Data Centers                              Rollout of alternative network infrastructures


                                                                                                               Rollout of broadband networks in schools and
                                                           Promotion of terminals in schools and colleges
                                                                                                                                 colleges
                           Applications
                            & Services


                                                                           e-Agriculture                                                        ICT for Businesses
        Investment Areas




                                                                            ICT for Education and Lifelong                                                         e-Health



                                                                                            IT for Government Agencies                                                        e-Environment




                                                                       Public Key Infrastructure                                eGovernment infrastructure and interoperability
                                     eGov




                                                                                                             Land and property management
                                                               Government to Employee Portals                                                    Online income tax applications
                                                                                                                        system


                                                         Administration Simplification        Business Tax Management Systems                  Business Community Portals                         e-Social Services



                                                                                   Training and skills development associated to           Training and skills development
                                                                                             projects on e-Government                     associated to ICT Apps & Services
                                     HR




                                                                                                                      Training and skills development associated to ICT infrastructure



                                                                   Development of Project Management Skills and Certification



                                                                               Figure 65 – Investment Areas layer of AC Roadmap on Investment Planning in Vietnam




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