may even be a disincentive for provinces to improve their monitoring systems, since it is in their interest to show that their access figures are low and that they are in need of more central funds. in rural areas decision-making often remains top-down, with little or no meaningful participation by users. for example, in some provinces in central vietnam piped water supply with meters is provided at high costs, while users continue to use water that comes in hose pipes from nearby sources, because it is cheaper and is considered of better quality. the asian development bank concludes: local capacity for operation and maintenance (...) is lacking. capacity building and monitoring and evaluation (...) have proven inadequate so far. commune people's committees are supposed to guide the establishment of management boards for water supply and sanitation but members (...) lack the skills needed to carry out their tasks (...) households are either reluctant or unable to pay for water supply (...) after schemes have been built, people either do not use them at all or use them sparingly, supplementing them with water from unimproved sources, resulting in an unintended overcapacity of schemes themselves. responsibility for service provision water supply and sanitation in vietnam is the responsibility of numerous categories of service providers, with substantial differences in the categories of service providers between urban and rural areas. urban areas water supply in cities and some larger towns is provided by state-owned provincial water service companies (wscs). provincial wscs have evolved from a centralized national water supply organization during the 1990s. their autonomy is still limited. key decisions such as budgets, staff salary and benefits, and senior management appointments require approval by the provincial government. assets are owned by the province, not the wsc. there is no contractual relationship between the province and the wsc. some wscs are public service enterprises (pses), while others have converted to private-law enterprises on the basis of the enterprise law. some wscs only operate the water systems, while others also design or even build them. some even manufacture equipment. some wsc are active outside their geographical jurisdiction. sewerage and wastewater treatment in cities is the responsibility of provincial urban environmental companies. in some provinces they provide only sewerage and wastewater treatment, while in others they have many other responsibilities such as solid waste collection, and again in other provinces wscs are also in charge of sewerage. private sector participation in urban water supply is limited to build-operate-transfer (bot) contracts for drinking water treatment plants. in ho chi minh city (hcmc), a malaysian firm has been operating the binh an plant since 1994. the thu duc 2 treatment plant in hcmc and a raw water pumping station supplying water to ha noi, including a transmission main from hoa binh, are owned and operated by joint stock companies. rural areas in rural areas of vietnam piped water systems are operated by a wide variety of institutions including a national organization, people committees (local government), community groups, cooperatives and private companies. in small towns and rural areas there are six service models: operated by the provincial branch of the national center for rural water supply and sanitation cerwass (41% of schemes) direct management by town-level people's committee (24% of schemes); community management (23% of schemes, mostly of small size); agricultural cooperatives (4%); other state-owned enterprises, mainly consisting of district water supply companies and/or environmental service companies (1%); private water companies (3%). a 2007 survey by cerwass in 39 provinces inventoried 4,433 piped water schemes, finding that those operated by cerwass were best operated and maintained (62% classified as "good"), compared to those operated by people committees (38%) and communities (25%). most early private water systems were built and financed by local residents and water tariffs are high. since 2007 private water companies began operating larger water systems, such as in lim town, with a total population of approximately 12,500, and minh duc town, with a total population of 11,700, under competitively awarded 10-year lease contracts with the provincial water company. these contracts introduced a new service provision model to small towns in vietnam. the national center for rural water supply and sanitation (cerwass) and its provincial branch offices provides grant financing, requiring a user contribution, and organizes the construction of infrastructure. it also still operates water systems, although it is supposed to withdraw from this function. a world bank study of rural water supply service delivery models in 2010 showed that there have been limited efforts to create the institutional framework necessary for sustainable service provision, that up to 90% of wells drilled are not operational and that "a large part of systems break down completely or need major repair within 3-4 years", partly due to poor quality construction. a 2007 survey showed a slightly better picture. it found that out of 4,433 piped water schemes 41% were well operated and maintained, 35% had "medium" operation and maintenance, and 24% had poor or no operation and maintenance. efficiency according to a national urban water benchmarking system set up by the viet nam water supply and sewerage association (vwsa) with the support for the asian development bank, non-revenue water is reported by provincial water companies as having been reduced from 39% in 2000 to around 30% in 2009 on average. however, vwsa itself questions the reliability of these figures. in some cities, non-revenue water is as high as 75%. the government says it wants to reduce non-revenue water to 25% by 2015 and 15% by 2025. financial aspects investment and financing between 1992 and 2002 about us$1 billion ($100 million per year) was invested in urban water supply and sanitation, out of which us$ 838m was financed by external donors. in rural areas, between 1999 and 2002 a total of vnd 3.160 billion ($225 million, corresponding to $56 million per year) was invested, out of which vnd 1,460 billion (46%) was financed by users themselves, vnd 1300 billion (41%) by the government and “other sources”, and only vnd 400 million (13 percent) by donors. the total investment of usd 156m per year corresponds to less than 2 usd per capita and year. tariff levels and adjustment urban water tariffs are set by the executive branch of each province, the provincial people’s committees, after the provincial water supply company (wsc) submits their tariff proposal. often the people’s committees obtain the consent of the legislative branch, the people's council. tariffs are reviewed annually. a 1999 circular 03/1999 said that local government must gradually increase water tariffs to fully recover costs. implementation has been slow at first, but it sped up when in 2004 the ministry of finance and the ministry of construction issued a joint circular stipulating the common tariff framework for the whole country, including rural areas. in 2003 residential urban water tariffs were typically in the range vnd 1600 to 2700/m3, with an average of vnd 2,181/m3 (us$0.15/m3). according to another source, the average water tariff for all user categories - residential, commercial and others - was $0.26/m3 in 2009. where water consumption is metered, increasing-block tariffs are applied. the second block of the tariff often starts at a low level of consumption. for example, in hcmc it starts at 4 cubic meters per month. however, connection fees are high, especially in small towns, and – according to the world bank - were “a major obstacle to achieving greater coverage of water supply services” in 2005. sewer tariffs did not exist until the early 2000s and have only been introduced gradually. in hcmc the sewer tariff was only 10 percent of the water tariff, far below the actual cost of sewerage and wastewater treatment. cooperatives and community-based water supply systems in small towns set their own water tariffs, which are then approved by the provincial people’s committee. in rural areas, water is typically not being charged for. cost recovery and affordability in 2004, all wsc except two recovered their operating costs from tariff revenues. the average operating cost coverage ratio was 168% in 2009. there is no information on cost recovery in small towns and rural areas. water bills for those connected are below 2 percent of household expenditures. in slums, residents often cannot connect to the public water system since they are not formally registered. they are forced to buy water from households with connections at a price that is 2−8 times higher than the water tariff. external cooperation the main external donors in water supply and sanitation in vietnam are the asian development bank and japan, followed by the world bank and germany. in rural areas four smaller donor − australia, denmark, the uk and the netherlands − have joined forces to provide budget support for a national program. germany germany promotes sustainable sanitation through a wastewater management program that involves technical cooperation and financial cooperation. the program ran from 2005 to 2014. it has influenced the national regulatory framework for sanitation through waste water management decree 88/2007 enacted by the prime minister and a corresponding circular enacted in 2009 by the ministry of construction. furthermore, it supports provincial people's committees and wastewater companies in nine provinces through the elaboration of corporate development plans and the financing of sewers and wastewater treatment plants. these are lang son, son la, hoa binh, bac ninh and hai duong in the north, vinh in the centre, as well as tra vinh, soc trang and can tho in the mekong delta. in 2010 the province of soc trang has been the first to enact a sewer tariff that is designed to recover the costs of operation and maintenance. in 2012 bac ninh introduced a sewer tariff that is designed to recover half the operation and maintenance costs, with the aim of fully recovering them in 2014. the program also supports information campaigns to increase environmental and health awareness. japan jica supports "water environment improvement" in the provinces thừa thiên–huế and đồng nai. in bình dương, near ho chi minh city, jica provides a low-interest loan of almost 20 billion yen (us$170 million) for a sewer system and measures to conserve the city's source of drinking water. world bank the world bank provides support through 12 projects approved between 1997 and 2013 with a total lending of more than us$1 billion. one of them is the red river delta rural water supply and sanitation projects that promoted participatory approaches through the creation of joint-stock companies. the world bank-administered global partnership for output-based aid (gpoba) supports public-private partnerships for water supply in 75 villages in central vietnam through a us$4.5 million grant for the east meets west foundation. asian development bank in february 2011 the adb approved a $1bn 10year-facility for water supply in seven or more cities. in december 2015 the adb approved a loan to expand a water treatment plant on the da river to supply hanoi with drinking water, replacing contaminated groundwater that is currently used to supply the city's residents. the loan proceeds will also be used to connect households west of the city along the transmission line from the da river to hanoi. however, in 2016 the hanoi people's committee awarded a licence to build another water treatment plant on the duong river west of the city in an area without a distribution network. the licence was awarded without bidding, using a legal loophole that allows to bypass competitive bidding that is prescribed in a decree on public-private partnerships (ppp) passed as recently as 2015. the private company that received the license is vietnam-oman investment company (voi) – a joint venture of the state general reserve fund of oman, state capital investment corporation of vietnam, state-owned technology enterprise newtatco, vietinbank capital, and the hanoi water limited company (hawacom).