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How is Australia working with one of Asia's fastest-growing water sectors?

As the Australian Ambassador to Vietnam, Craig Chittick has witnessed the fast-paced development of one of South-East Asia’s most interesting and innovative water sectors.

The Australian Water Association sat down with Chittick to learn more about working with Vietnam.

Australian Water Association (AWA): The Australian Government has been actively supporting Vietnam for nearly two decades, with impressive outcomes. Can you outline some of your achievements and current investments?

Craig Chittick: I’m very proud of our work over many years to support Vietnam in extending access to safe water. When we commenced work in this sector, we were focused on helping national and provincial government agencies deliver water services to the rural population.

We provided support for nearly 10 years to the National Target Program for Rural Water Supply and Sanitation. We were pleased to play a part in helping Vietnam achieve its target of 85% of the rural population having access to safe water, and 65% having access to hygienic latrines.

In 2015, we began to move to a model much more focused on building the capacity of Vietnamese institutions and empowering the private sector to deliver water services. 

Through the Australian Water Partnership, a program through which we share Australian water expertise across the Indo-Pacific, we have been able to establish successful Water Utility Improvement Program between 10 Australian and Vietnamese water utilities, facilitated by the AWA, to assist in implementing target set for drinking water, asset management, pricing, planning and information system reforms.

We’re also delivering a range of regional programs that are assisting Vietnam in developing a water pricing strategy for agriculture and improved water, sanitation and hygiene services in key areas. As your readers will be familiar, we have also recently initiated a program with the AWA to pilot private sector approaches to rural water supply in Vietnam.

This work has included installing innovative, low-cost water treatment and supply technologies in remote areas, establishing a rural public-private water partnership, and facilitating attendance by water professionals from government bodies, water utilities and private companies at the annual Ozwater and Vietwater conferences. This work is in its early days but has shown promising results.

Australian Ambassador Craig Chittick inspecting the DFAT-supported water treatment plant in Ha Nam Province.

AWA: Could you tell us how Australian Government investments are supporting Vietnam to deliver on its developmental objectives?

Chittick: We’ve been supporting Vietnam in its remarkable economic transformation for many years through our development assistance. Our current Aid Investment Plan identifies ways we can support Vietnam’s national reform priorities, including improving market institutions, promoting human resources and developing infrastructure. This year we will provide around $84 million across six areas to support Vietnam’s development efforts.

Our development cooperation is maturing and growing along with our wider relationship. In March 2018 we became Strategic Partners and resolved to consider our development cooperation in the wider context of our economic partnership. This change recognised that, while development cooperation would continue to be important, the impact of those initiatives on supporting Vietnam’s development would only be a small part of the story. Our bilateral trade is now close to $13 billion annually and that is a substantial contributor to Vietnam’s growth. 

AWA: The role of private industry in Vietnam’s water sector has rapidly accelerated over the past two years. How can the Australian private sector play a role in this journey?

Chittick: I think it is clear to policymakers in both countries that as Vietnam enters middle income, the private sector will be a much larger and more important component of Vietnam’s development. 

The Vietnamese Government has set a target to make all of Vietnam’s water utilities equitable by 2019. In 2018, 35 water utilities made open calls for private investment. This year Vietnam also passed a new competition policy, which will drive further micro-economic reforms.

In many ways these changes resemble Australia’s own water reform journey, which commenced in earnest in the 1990s. Today, the private sector operates and maintains over 80 per cent of our water infrastructure and, by some estimates, this change has generated $80 billion in productivity improvements to the Australian economy. 

As a government we will continue to share what we’ve learned and contribute expertise where we can.  But increasingly Vietnam will be looking to private firms that can offer investment, technology and solutions to rural water supply challenges. 

Australian companies will be placed to take advantage of these opportunities in the Vietnamese market.  We share many common challenges in sustainable water management, including dealing with new climate extremes, droughts, floods and salinisation. 

Australian companies are already starting to secure or become aware of opportunities in waste-water treatment and distribution; industrial park waste management; water quality management; asset management; non-revenue water; water efficiency; water recycling; water law; supply-demand planning; business management and energy recovery.  Vietnam-Australia enterprise partnerships that are forming to harness manufacturing efficiencies across Vietnam are another area of growth I find particularly exciting.

More and more delegates from both countries are attending annual Ozwater and Vietwater exhibitions, which I think reflects a growing awareness of these opportunities.   

Australian Ambassador Craig Chittick (centre) at the Australian Pavilion at Vietwater’16.

AWA: How can the Australian water sector get involved through AWA?

Chittick: I think this will be an increasingly important question as the private sector takes on a more central role in the development of Vietnam’s water sector.

The Australian Government will continue to support Vietnam’s national development efforts, advocate for policy changes that open up the market for Australian companies and provide market services to Australian exporters and investors, including through the Australian Trade Commission. 

However, it will be AWA, as the peak industry body, that will be the engine room for opening up exchanges and links between the two private sectors.

Our current partnership with the AWA is helping to ensure that the expertise of Australian companies achieves a high profile in Vietnam. 

AWA is currently doing a lot of work to facilitate partnerships and support tendering for major water and wastewater infrastructure. It has been linking water utilities and building demand for Australian technology, research and development by showcasing Australian technology. 

For SMEs, AWA has been playing a role in enabling market entry and facilitating business and joint venture introductions to support the uptake of water technology and consultancy services. 

I strongly encourage Australian companies interested in exploring opportunities in Vietnam to engage with AWA on how they can get involved.

To learn more about opportunities in Vietnam, click here.

First published in Current magazine October 2018.