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- The project impact will accelerate socio-economic development of the four north central provinces (NCPs) in accordance with the Provincial Socio-economic Development Plans through 2020, with a vision to 2030 (PSEDP) and the Master Plan on Socio-economic Development of Viet Nam's Central Northern and Coastal Region through to 2020 (Master Plan). The project outcome will be service delivery in the four NCPs of Viet Nam of Ha Tinh, Nghe An, Quang Binh, Quang Tri improved.

- The proposed project will (i) rehabilitate and upgrade provincial road and district roads in the NCPs; (ii) support productive and business infrastructure including water supply networks, sea and river protection and drainage works with association river transport infrastructure, and supporting flood and irrigation command areas; and (iii) establish decentralized public asset management processes and established for road, water supply and irrigation infrastructure.

- The project will have an Asian Development Bank (ADB) sector modality and implement in total approximately 32 subprojects for outputs 1 and 2. Feasibility Studies (FS) have been prepared for the four representative subprojects demonstrating subproject viability, and consequently overall project feasibility. Criteria for the eligibility, election, prioritization and preparation of additional subprojects have been agreed. A long list of additional subprojects has been identified, and the NCPs and ADB will carry out field screening to agree upon their inclusion in the project.

The key constraints contributing to FNCP poverty and low incomes that the Project will address include: (i) High transport costs due to weak inter-district linkages, with low quality road conditions leading to extended travel times. While the national arterials including the south-north axis and EWEC, are mostly in good condition, rural connectivity is underdeveloped; (ii) Inadequate infrastructure quality and coverage hampers business investment, competitiveness and increases exposure to natural disasters and climate change impacts, resulting in livelihood vulnerabilities, high costs of repair, reconstruction and adaptation. In particular the lack of clean water and poorly developed services for many rural coastal communities is causing illness and reduced incomes; (iii) Weak asset management. The FNCP have developed infrastructure assets in a piecemeal fashion, without systems for preserving the investments already made and to inform future investment decision makers, resulting in a costly cycle of construction, deterioration and reconstruction.

The project is aligned with important government policies and strategies as expressed in: (i) 2016 Socio-Economic Development Plan 2016 2020, which aims to expand the domestic market, promote export, and sustain trading surpluses; (ii) master plan on socio-economic development of Central Vietnam's northern and coastal region through to 2020, giving priority to regional connectivity, the benefits of improved access to economic opportunities and services by increasingly multi-sector investments; (iii) 2009 Government's Transport Strategy, which emphasizes corridor development, and provincial and rural connectivity; (iv) 2011 National Target Programme on New Rural Development (NRD) with specific targets for rural development including rural access, water resources, and rural value chains; (v) commitment to the sustainable development goals (SDGs).

The Project supports the three pillars of ADB's Viet Nam country partnership strategy 2016 2020: (i) promotion of job creation and competitiveness, through assistance to improve physical connectivity, and support commerce and employment creation, enhance the business environment, and increase productivity, (ii) enhanced and inclusive infrastructure and service delivery by, diversifying economic opportunities, broadening access to essential social services, creating livelihood opportunities for rural people in the FNCP. Particular emphasis will be placed on working with provincial governments to upgrade and maintain rural productive assets, such as roads and rural water supply, and (iii) improved environmental sustainability and climate change response, by including climate-proofing measures into infrastructure investments.

Value added by ADB assistance. The ADB strongly supports the GMS Strategic Framework 2012-2022 which prioritizes multi-sector investments to foster regional and local economic development that require stronger cross-sector linkages and integration particularly with special economic zones and border areas. The project will contribute to the ADB's goals for regional integration through GMS economic cooperation by promoting closer FNCP development in cross-border areas, and is consistent with the GMS Transport and Trade Facilitation Action Plan. Greater synergies will be achieved with current ADB technical assistance projects capacity building initiatives for road safety, agriculture competitiveness and public sector management, as well as support from development partners. ADB is supporting the government's focus on decentralized managed, area-wide, multi-sector approach within which the FNCP is a regional cluster with shared development objectives.