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["Vu Nguyen Thanh" <thanh@ulmus.riken.go.jp>]

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30 FIRMS BID FOR  VIETNAM BANKING COMPUTERISATION PROJECT

HANOI - Thirty computer companies from the US, Japan, France, South 
Korea and Germany will bid for a US$53 million project on banking 
computerisation in Vietnam. The World Bank will provide Vietnam with 
a soft loan of US$49 million for the project. The balance will be 
borrowed from local commercial banks.



 Vietnam: Payment System/modernization Project: Opp'ties 

 International Market Insight Reports 
 Tue, May 27 1997 

 Telegraphic Report from the AMERICAN EMBASSY in HANOI 

 Vietnam Payment System and Bank Modernization Project (financed by
 IDA Credit)

 PROJECT SUMMARY 

 Borrower: The Socialist Republic of Vietnam 

 Implementing Agency The State Bank of Vietnam (SBV) 

 Project Cost US$53.9 million 

 Foreign Exchange Components: US$49.6 million 

 PROJECT DESCRIPTION 

 The ultimate objective of the project is to assist in the development
 of a modern banking sector able to service the needs of a growing
 economy, thereby increasing confidence in the Vietnamese banking
 system. The immediate objectives of the project are to: (1) improve
 payment services in the economy in order to reduce float, speed up
 circulation of funds and increase efficiency of funds transmission;
 and (2) strengthen the institutional capabilities of participating
 banks in order to stimulate commercial bank initiatives to improve
 internal management and customer service. 

 To meet the above objectives, the project would consist of four
 components: 

 I. A national inter-bank payment clearing and settlement system. 

 This component consists of two components: (1) an inter-bank payment
 system (IBPS) and (2) a Settlement Account Processing System (SAPS). 

 1. IBPS will comprise two sub-systems: (1) a low value sub-system for
 credit transfers and pre-authorized debit transfers, able to handle
 batches of items as well as individual items, operating with a net
 settlement mechanism; and (2) a high value sub-system for credit
 transfer, providing a RTGS settlement facility for individual
 time-critical payments. 

 2. SAPS: Direct access to the IBPS will be restricted to settlement
 banks, each of which will have a single centralized settlement
 account at the SBV. For settlement purposes, IBPS will interact with
 SAPS. A bank without settlement account may participate indirectly
 via a correspondent relationship with a settlement bank. 

 II. Commercial banks' intra-bank payment systems. 

 The second component comprises of six sub-projects of six commercial
 banks (CBs). This component will address the intrabank and
 international payments needs of the six participating banks. There
 will be a Commercial Bank Payment System (CBPS) for each of the six
 commercial banks included within the scope of this project. Each
 system will be able to handle all domestic intra-bank payments, both
 intra- and inter-provincial. 

 III. Commercial banks' institutional strengthening. 

 The third component of the project consists of: (1) diagnostic
 reviews of the CBs' modernization needs, with particular emphasis on
 the design of appropriate customer accounting systems; and (2)
 diagnostic portfolio reviews and financial audits of the CBs to
 determine their true financial situation. 

 IV. Project management support. 

 The forth component of the project provides support for project
 management, consisting of consulting services for: (1) procurement of
 the systems; and (2) technical support to the Project Management. 

 The first two components (inter- and intra-bank systems) will be
 procured on a turn-key contract basis wherein the contractor will
 provide the computer hardware, software, and initial systems
 operation. The commercial banks (CBs) participating in this project
 have been selected by the SBV on the basis of their payment
 processing activity: among them, they account for 90 percent of
 banking activity in the country.

 IMPLEMENTATION 

 The project will be implemented by the SBV and the six CBs. In other
 words, this project is divided into seven sub-projects. Project
 implementation procedures will vary by the type of goods and services
 to be procured. Regarding the inter-bank system sub-project, it will
 be directly managed and implemented by the SBV. At the present, SBV
 has finalized the Technical Specification document for the inter-bank
 payment system and will start opening the bidding for this
 sub-project first. There will be four phases after procurement: 

 -- construction, including detailed systems specification on the
 basis of the technical specifications already prepared; site
 preparation and installation, system testing and development of
 training plans, required document and disaster recovery plan and
 drill; 

 -- initial pilot, in which the new systems will be installed in
 selected initial pilot sites, new settlement accounts will be
 established, and parallel running of old and new payment systems will
 be ensured; 

 -- pilot expansion, including site preparation for remaining sites,
 delivery of on-site training, further acceptance testing and
 decommissioning of the old payment system; and 

 -- operations and maintenance, in which the vendor will operate the
 new inter-bank system for a period of one year after it has been
 installed in all sites covered by the project. 

 The intra-bank systems will be implemented by each CB and the winning
 vendor, and will follow broadly the same structure and phases as the
 inter-bank system. At the present, under the supervision and
 guidelines of the SBV, CBs are now preparing the contracts for
 consultant services to carry out the third component of the project
 (Commercial Banks' Institutional Strengthening). 

 COSTS AND FINANCING 

 The base project cost is US45.3 million, and the total project cost
 including contingencies is US$53.9 million, with a foreign exchange
 component of about 92%, or US$49.6 million. The Government of the
 Netherlands has financed the portfolio audits of the four commercial
 banks (US$1 million). The proposed IDA credit of US$49 million will
 finance 99% of the estimated foreign exchange cost. The State Bank of
 Vietnam, on behalf of the Socialist Republic of Vietnam would be the
 primary implementing agency. Part of the proceeds of the IDA credit
 would be on-lent to the CBs. However, in addition to the WB credit to
 be allocated to each CB, each CB will contribute a counterpart fund
 to build up its own intra-bank system. 

 IMPLEMENTING AGENCY 

 The Banking Project Management Unit (PMU) was established in
 September 1995 within SBV, and it is responsible for (1) coordinating
 day-to-day implementation activities; (2) administering the IDA
 credit; and (3) serving as a focal point for Bank supervision
 activities. 

 PROJECT LIFE 

 The overall project will be implemented in a period of 5 years time.
 According to the actual progress of the project, the project will be
 implemented starting from 1997, in which the inter-bank project will
 be started with procurement of system contract and the CBs'
 intra-bank projects will be started with procurement of consultant
 services. It is envisaged that this project will be finished by the
 year 2001. 

 The inter-bank sub-project overview: 

 Procurement Phase: 1997-1998 Construction Phase: 1998-end Initial
 Pilot Phase 1999 Pilot Expansion Phase 1999-2000
 Operations/Maintenance Phase 2000-2001 

 The intra-bank sub-projects procurement phase will be started in 1998
 after the CBs finish the third component. 

 After this project is successfully implemented and operated, there
 will probably be another project approximately US$100 million to be
 followed in order to upgrade all other CBs in Vietnam. 

 PROCUREMENT 

 All eligible vendors can send Letter of Interest to the PMU to
 express their interest in bidding for system contract or consultant
 contract. When their company names are listed, they will be well
 informed about the date to start the tender process of each
 sub-project. And all vendors have equal rights to take part in the
 bidding of this project. 

 CONTACT INFORMATION 

 Dr. Dao Quang Thong Director Banking Project Management Unit Tel:
 844-824-0786, 844-824-0787 Fax: 844-824-1097 

 State Bank of Vietnam 47-49 Ly Thai To Street Hanoi, Vietnam 


Click here 

 NEWS: NEC to make digital phone exchanges in Vietnam 

 NIKKEI English News 
 Mon, May 26 1997 

 (Nihon Keizai Shimbun, May 26, 1997) 

 NEC Corp. will manufacture digital telephone exchange equipment in
 Vietnam through a joint venture with Vietnam Posts and
 Telecommunications (VNPT). Plant construction is likely to start this
 summer, with production scheduled to begin by the end of 1998. 

 VNPT-NEC Telecommunication Systems Co. will be founded in July with a
 capital of 7 million dollars. NEC will own a 51% stake. The factory
 will cost 15 million dollars and will produce digital and other
 exchanges for 300,000 circuits a year. 

 Currently only 1.6% of Vietnam's 70 million people have a telephone.
 VNPT hopes to provide an additional 3 million circuits by 2000. 

 NEC holds just below 20% of Vietnam's telephone exchange market and
 local production is expected to raise the share to 30%.