China - Jiangsu Provincial Transport Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16160 IMPLEMENTATION COMPLETION REPORT CHINA JIANGSU PROVINCIAL TRANSPORT PROJECT (LOAN 3316-CHA/CREDIT 2226-CHA) November 25, 1996 Infrastructure Operations Division China and Mongolia Department East Asia and Pacific Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit - Yuan (Y) 1989 (appraisal) $1 Y 3.76 1990 $1 = Y 4.78 1991 $1 = Y 5,32 1992 $1 Y 5.53 1993 $1 Y 5.76 1994 I $ Y 8.60 - 1995 $1 'Y8,50 1996 $1=Y8.31 FISCAL YEAR January I - December 31 WEIGHTS AND MEASURE$ I meter (m) = 3.28 feet (ft) I kilometer (km)2 = 0.62 mile (mi) 1 square meter (m 10.76 square feet (ft?) I square kilometer (km2)2 0.4 square miles (mi ) I hectare (ha) = 0.01 km 2.47 acr5s (ac) = 15 mu I mu = 666.7 m = 0.0667 ha 1 kilogram (kg) = 2.2046 pounds (Ibs) I metric ton (mt) . = 2,204 pounds (lbs). ABBREVIATIONS AND ACRONYMS 8FYP - Eighth Five-Year Plan ERR - Economic Rate of Retum FRR - Financial Rate of Retum ICB - Intemational Competitive Bidding ICR - Implementation Completion Report JPCD Jiangsu Provincial Communications Department JPTPDI - Jiangsu Provincial Transport Planning, Survey.and Design Institute MOC - Ministry of Communications, NCB - National Competitive Bidding NJH - Nanchang-Jiujiang Highway NPV - Net Present Value PMS - Pavement Management System RDB - Road Data Bank RNR - Road Network Rehabilitation SAR - Staff Appraisal Report SOC - Ship Operating Cost VOC - Vehicle Operating Cost Vice President (Acting) Nicholas C. Hope, EAP Director : Nicholas C. Hope, EA2 Division Chief Richard Scurfield, EA2IN Staff Member Yasuhiro Kawabata, Highway Engineer, EA2IN  FOR OFFICIAL USE ONLY CONTENTS PREFACE ..........................................................v EVALUATION SUMMARY ......................................................... vii PART I: PROJECT IMPLEMENTATION ASSESSMENT .................................1 A. Project Objectives and Description .........................................................l1 B. Achievement of Project Objectives ........................................................2 C. Implementation Record and Major Factors Affecting the Project ...............9 D. Project Sustainability ......................................................... 10 E. Bank Performance ......................................................... 10 F. Borrower Performance ......................................................... 11 G. Assessment of Outcome ......................................................... 12 H. Future Operation ......................................................... 13 I. Key Lessons Learned ......................................................... 13 PART II: STATISTICAL TABLES ......................................................... 14 Table 1: Summary of Assessments ......................................................... 14 Table 2: Related bank loans/Credits ......................................................... 15 Table 3: Project Timetable ......................................................... 16 Table 4: Loan/Credit Disbursement: Cumulative Estimate and Actual ......... 16 Table 5: Key Indicators for Project Implementation ...................................... 17 Table 6: Key Indicators For Project Operations ............................................. 18 Table 7: Studies included in Project ......................................................... 19 Table 8a: Project Costs ......................................................... 20 Table 8b: Project Costs ......................................................... 21 Table 8C: Project Financing ......................................................... 22 Table 9: Economic Costs and Benefits ......................................................... 22 Table 10: Status of Legal Covenants ......................................................... 23 Table 11: Compliance with Operational Manual Statements ......................... 24 Table 12: Bank Resources: Staff Inputs ......................................................... 24 Table 13: Bank Resources: Missions ......................................................... 25 ANNEX 1: ECONOMIC EVALUATION ......................................................... 27 Part I: Nanjing-Shanghai Class II Highway .................................................... 27 Part II: The Bridges and Interchange ......................................................... 32 Part III: Road Network Rehabilitation ......................................................... 35 ANNEX 2: ICR MISSION'S AIDE MEMOIRE ................................................... 78 ANNEX 3: BORROWER'S CONTRIBUTION TO THE ICR ............................ 80 Ths document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - iv - MAPS 1. Project Components - IBRD 28375 2. Provincial Transport Network and Future Plan For Development of Transport Corridors - IBRD 28376  v - IMPLEMENTATION COMPLETION REPORT CHINA JIANGSU PROVINCIAL TRANSPORT PROJECT (LOAN 3316-CHA/CR:EDIT 2226-CHA) PREFACE This is the Implementation Completion Report (ICR) for the Jiangsu Provincial Transport Project in China, for which Loan 3316-CHA in the amount of $100 million equivalent and Credit 2226-CHA in the amount of SDR 38.5 million ($53.6 million equivalent) were approved on April 9, 1991 and made effective on September 6, 1991. The loan and credit were closed on June 30, 1996. They were fully disbursed, and the last disbursement took place on August 27, 1996. The ICR was prepared by Messrs. Yasuhiro Kawabata (Task Manager) and Han- Kang Yen (Research Analyst) in the Infrastructure Operations Division, China and Mongolia Department of the East Asia and Pacific Region, and reviewed by Messrs. Richard Scurfield, Chief, EA21N and Yo Kimura, Project Advisor, EA2DR. The borrower provided comments that are included as an appendix to the ICR. Preparation of this ICR was begun during the Bank's final supervision mission in April 1996, and an ICR mission visited the Province in November 1996. The ICR is based on materials in the project file and additional data provided by the project executing agency. The borrower contributed to preparation of the ICR by contributing views reflected in the mission's aide-memoire, preparing own evaluation of the project's execution and initial preparation, commenting on the draft ICR.   - vii - CIHINA JIANGSU PROVINCIAL TRANSPORT PROJECT (LOAN 3316-CHA/CREDIT 2226-CHA) EVALUATION SUMMARY Introduction and Project Objectives 1. The project's main short-term objectives were to help mitigate the most serious constraints posed by the province's inadequate transport infrastructure. This was achieved by: (a) rehabilitating about 450 km of provincial roads; (b) upgrading 176.5 km of the Nanjing-Shanghai highway; (c) rehabilitating a 17-km section of the Grand Canal at Danyang; and (d) constructing a new Nantong shiplock and Jiuweigang bridge. The long- term objectives were to help the province upgrade the planning, budgeting and implementation of transport works, and develop more efficient construction entities. This was accomplished by: (a) providing consultant services to train the Jiangsu Provincial Conmnunications Department (JPCD) staff to supervise and perform quality control of construction; and (b) assisting JPCD introduce the immediate and long-term action plan to develop transport construction units. It also provided technical assistance to (a) evaluate road pavements and prepare a strengthening and maintenance program; (b) improve the design and planning of roads and waterways; (c) carry out the provincial transport corridor study; and (d) train staff. 2. The objectives reflected the province's physical and developmental transport needs, the central Government's development strategy, and the Bank's assistance strategy for the sector. 3. The project was identified in April 1988, negotiated in May 1989, and scheduled for Board presentation in June 1989. However, due to the incidents that occurred in June 1989, the Board date was postponed until April 9, 1991. The project was postappraised in August/September 1989, and all information was subsequently updated with the assistance of staff at the Bank's Resident Mission in China. The project became effective on September 6, 1991. Although some construction continued during the suspended period, for which payments were disbursed retroactively, the two-year suspension greatly affected implementation. Implementation Experience and Results 4. The project generally met its objectives, although the training component covered fewer staff than expected. The Staff Appraisal Report (SAR) estimate for the project was Y 1,720.2 million, including physical and price contingencies. The final project cost was Y 2,313.7 million, an increase of about 35 percent. The higher cost was due to unexpected inflation in China, some design changes, and expanded scope of works. The  - viii - SAR estimate of the civil works component, (consisting of (a) Rehabilitation of Provincial Roads, (b) Rehabilitation of the Nanjing-Shanghai Highway, (c) Rehabilitation of the Grand Canal at Danyang, (d) Construction of the Nantong Shiplock, and (e) Construction of the Jiuweigang Bridge) was Y 1,406.3 million including physical and price contingencies. The final cost, based on certified payments to contractors, was Y 1,950.9 million, an increase of about 39 percent. The re-estimated aggregate economic rate of return (ERR) for all civil works components was 38.5 percent. The SAR contained no aggregate ERR, since most of subprojects under the Provincial Roads Rehabilitation program were not identified at the appraisal stage. Details of each project component are discussed below. 5. Rehabilitation of the provincial road network, carried out in three phases, was accomplished, although at a higher cost than estimated in the SAR. The SAR estimated the ERR for the Phase I component to be 42.0 percent, but the re-estimated return at completion was only 23.9 percent. The main reason for the lower rate was that the economic cost of investment had almost doubled, far outweighing the fact that the traffic volume was slightly higher than forecast. Phase I was completed in June 1994 as scheduled. Phase II works were completed in December 1994, representing a delay of three months. The original Phase III works were completed in December 1995, which met the revised schedule but was almost one year later than the original SAR schedule. Additional Phase III works began in June 1995 and were completed in June 1996. 6. Rehabilitation of the Nanjing-Shanghai Highway was satisfactory. The work was completed in December 1991 as scheduled. The SAR estimated cost was Y 370.2 million, while the final cost was Y 401.9 million, an increase of about 9 percent. Although savings were gained by two major changes in the scope, most were absorbed by the extra work in other sections and higher price hikes than originally assumed. The re- estimated ERR for this program was 50.4 percent, which is lower than the SAR estimate of 64.0 percent, since completion of the highway coincided with construction of the new Nanjing-Shanghai Expressway. It is estimated that 55 percent-72 percent of the total traffic along this corridor will be diverted to the new expressway after 1997. Except for the Nanjing-Zhenjiang section, overall traffic volume on the highway already reached capacity for a two-lane, Class II highway in 1995. 7. Rehabilitation of the 17-km Danyang section of the Grand Canal was completed in December 1992. The SAR estimated cost was Y 80.8 million, while the final cost, which included additional works and price increases, was Y 62.5 million. The re- estimated ERR is 24.8 percent, compared to the SAR estimate of 19.6 percent. 8. Construction of the Nantong Shiplock was completed in December 1993. The SAR estimated cost was Y 54.6 million, while the final cost was Y 51.9 million, or about 5 percent below the estimate. The re-estimated ERR is 20.8 percent, compared to the SAR estimate of 20.2 percent.  -ix - 9. Jiuweigang Bridge was completed in December 1992 as scheduled. The estimated cost was Y 33.4 million, while the final cost was Y 28.4 million, which was about 15 percent below the SAR estimate. The re-estimated ERR is 21.3 percent. 10. Equipment totalling $11.64 million was procured for the intended purposes and the procurement process was accomplished according to Bank guidelines. The staff training program was not implemented according to the original schedule due to a lack of qualified trainees. Thus, planning for training will need to be done more carefully to ensure it is more effective and efficient, and that more staff participate. 11. The collection and storage of road data progressed well within the pilot Road Data Bank (RDB) program, as did the Pavement Management System (PMS) for guiding road investment decisions. However, both programs fell short of expectations. The technical assistance, both to Assistance to the Construction Units and the Provincial Transport Corridor Study, was completed according to the terms of reference. 12. No major environmental or resettlement problems arose during implementation. 13. The project's major components' civil works should be sustainable, provided routine and periodic maintenance works are carried out in a systematic and timely manner. In general, the identification of the components and the preparation, appraisal and supervision of the project were satisfactory. The Bank's involvement during implementation was also adequate and commensurate with the project's size and complexity. JPCD demonstrated that it is a well-organized institution with high-caliber technical staff and this could be seen in the way the project was prepared and administered. Summary of Findings, Future Operations, and Key Lessons Learned 14. Despite the delays associated with some of the components, implementation was satisfactory, primarily because the development objectives were achieved and are considered sustainable. Economic development of southern Jiangsu, whose gross agricultural and industrial value grew 25.4 percent a year from 1988-1995, was supported by improvements to the highway network. These involved increasing the length of Class II roads from 2,533 km in 1989 to 4,396 km in 1995 and highway density from 280 km/'000 km2 in 1989 to 304 km/'000 km2 in 1995, as well as implementing the project. In addition, JPCD's capacity to plan and budget, construct, supervise, maintain and operate the provincial highway system was strengthened. As a result of the experience gained on the Bank-financed highway project, which included extensive institutional strengthening, JPCD completed high-quality work on the 280 km Nanjing- Shanghai expressway according to the original implementation schedule. 15. Phase I civil works under the Road Network Rehabilitation (RNR) program were carried out by force account, while the rest were conducted by contractors, whose performance on the Nanjing-Shanghai Highway was adequate. Overall, the highway was constructed to a satisfactory standard but with less-than-desirable pavement quality on some sections. JPCD built three toll stations along the highway to collect tolls; revenues  will partly be used to repay the Bank loan, but mostly to rehabilitate and maintain the major highways. 16. The following lessons are relevant to future Bank-financed highway projects in China: (a) On some highway sections, the quality was deficient. This problem was largely related to the contractors' lack of experience and resources. Thus, more thorough assessments of contractors need to be made in the prequalification process. (b) The staff training, which was not implemented according to schedule, partly because of a language problem, highlights the need for a complete review of such programns under Bank-financed projects. (c) The lower-than-expected volume on the Nanjing-Shanghai highway could have been anticipated if the SAR team had contacted all the relevant agencies, along with the consultants working on the feasibility study for information about the parallel expressway being proposed.  CHINA JIANGSU PROVINCIAL TRANSPORT PROJECT (LOAN 3316-CHA/CREDIT 2226-CHA) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. PROJECT OBJECTIVES AND DESCRIPTION 1. The transport policy objectives of Jiangsu Province for the Eighth Five-Year Plan (8FYP, 1991-95) emphasized the construction and rehabilitation of infrastructure and modernization of facilities to improve the adaptability, service and engineering quality, and economic efficiency of all modes. The Jiangsu Provincial Transport Project responded to the need for transport facilities in the southern part of the province adjacent to Shanghai, which were constraining demand and future economic growth. 2. The project had two main objectives: (a) in the short term, to help mitigate the most serious constraints to its and neighboring provinces' economies caused by the inadequate transport infrastructure; and (b) in the long term, to help the province upgrade the planning, budgeting and implementation of transport works, and develop more efficient construction entities. In addition, a large technical assistance component was designed to help improve the skill and quality of provincial transport staff to more efficiently plan and implement the proposed project and achieve the long-term institutional objectives. 3. To accomplish these objectives, the following components were included: (a) rehabilitating about 450 km of provincial roads in southern Jiangsu; (b) upgrading 176.5 km of the Nanjing-Shanghai highway to Class II standards; (c) rehabilitating a 17- km section of the Grand Canal at Danyang; (d) constructing a new shiplock at Nantong and an adjacent bridge at Jiuweigang; (e) providing consultant services to train JPCD staff in supervision and quality control of road construction; and (f) assisting JPCD in the immediate and long-term action plan to develop its transport construction units. Also, technical assistance was included for: (a) evaluating road pavements and preparing a pavement strengthening and maintenance program; (b) improving the design and planning of roads and waterways, including establishing a road data bank, and introducing computer-aided design; (c) carrying out the provincial transport corridor study; and (d) training staff. 4. The project was identified in April 1988, negotiated in May 1989, and scheduled for Board presentation in June 1989. However, due to the incidents that occurred in June 1989, the Board date was postponed until April 9, 1991. The project was postappraised in August/September 1989, and all information was subsequently updated with the  -2 - assistance of staff at the Bank's Resident Mission in China. The project became effective on September 6, 1991. Although some construction activities continued during the suspended period, and payments for these were retroactively disbursed, the two-year suspension greatly affected implementation. B. ACHIEVING PROJECT OBJECTIVES 5. The project generally met its objectives, although the training component covered fewer staff than expected. The SAR's estimate for the project was Y 1,720.2 million, including physical and price contingencies. The final project cost was Y 2,313.7 million, an increase of about 35 percent. The higher cost was due to unexpected inflation in China, some design changes, and expanded scope of works. The SAR estimate of the civil works component, (consisting of (a) Rehabilitation of Provincial Roads, (b) Rehabilitation of the Nanjing-Shanghai Highway, (c) Rehabilitation of the Grand Canal at Danyang, (d) Construction of the Nantong Shiplock, and (e) Construction of the Jiuweigang Bridge) was Y 1,406.3 million including physical and price contingencies. The final cost, based on certified payments to contractors, was Y 1,950.9 million, an increase of about 39 percent. The re-estimated aggregate economic rate of return (ERR) for all civil works components was 38.5 percent. The SAR contained no aggregate ERR, since most of subprojects under the Provincial Roads Rehabilitation program were not identified at the appraisal stage. Details of each project component are discussed below. Rehabilitating the Provincial Roads 6. The Provincial Road Network Rehabilitation (RNR) program included reconstructing bridges, overlaying pavements and improving their alignment, and upgrading roads. The study that prepared the program evaluated and identified about 1,800 km of provincial paved roads that needed urgent rehabilitation, of which about 450 km were to be financed under this project. 7. The program was implemented in three phases. Phase I involved rehabilitating one bridge and five road sections totaling about 165 km. Road sections rehabilitated in Phase II and III were identified during the first phase, according to economic criteria and procurement procedures agreed upon with the Bank. 8. Phase II and III involved four road sections totaling about 110 km, and seven road sections totaling about 230 km, and one interchange (Qimen), respectively. In early 1994, JPCD proposed adding three more road sections, totaling about 58 km. Based on the justification and the economic evaluation supporting the three roads' viability, the Bank agreed. Detailed engineering was completed by prefectural and provincial design institutions. The entire rehabilitation program was originally scheduled to start in July 1989 and be completed in December 1994, but was delayed by the two-year suspension in project activities.  -3 - 9. Implementation and Supervision. Phase I was completed in June 1994 as scheduled. Phase II began in mid-1992 and was completed in December 1994 with a delay of three months. Work on the original Phase III began in June 1994 and was completed in December 1995, which met the revised schedule but was almost one year later than the original SAR schedule. The additional Phase III work, which consisted of the three road sections, began in June 1995 and was completed in June 1996. 10. Although delayed slightly, the RNR program was satisfactorily completed, and construction quality was good. When the project was prepared in 1988-1989, road construction was carried out by force account, and there was little or no independent supervision. Civil works under Phase I were carried out by force account; however, Phase II and III works were constructed by contractors. 11. The construction executed by force account and contractors was supervised by JPCD staff, who participated in training workshops given by foreign engineers. Consultants provided training in supervising construction in two phases: In Phase I, which was completed in July 1989, 77 staff of the provincial and city highway departments were trained in China. In Phase II, two groups of 10 each were trained abroad in 1992 and 1993. The supervision provided by JPCD helped to maintain good quality, control costs and ensure the work was completed in a timely fashion. 12. Construction costs. The SAR's cost estimate for the RNR program was Y 967 million, including physical and price contingencies. The aggregate contract amount of the 31 contracts was Y 1,231 million, while the final cost was Y 1,406 million, an increase of about 45 percent. The increase was due to the (a) expanded scope and (b) added works associated with variation orders and adjustments for price hikes, in a proportion of about 45 percent and 55 percent, respectively. 13. Economic evaluation. As described in Annex 1, the re-estimated aggregate economic rate of return (ERR) for the RNR was 21.4 percent, with 23.9 percent for Phase I, 20.3 percent for Phase II and 19.3 percent for Phase III. While the SAR contained no aggregate ERR, it did include an economic evaluation of the Phase I work, whose estimated ERR was 42.0 percent. However, the re-estimated return at completion was 23.9 percent. The main reason for the lower figure is that the economic cost of investment had almost doubled, far outweighing the fact that the traffic volume was slightly higher than forecast. Rehabilitation of the Nanjing-Shanghai Highway 14. Although the Nanjing-Shanghai Highway was a part of the RNR program, its rehabilitation was a separate project component because of its importance as the main artery connecting the two cities. Based on the recommendations in the 1987 feasibility study, Jiangsu Province decided to upgrade the entire road to a Class II standard (two lanes, paved), except for sections close to major cities and towns, where a higher, Class I (four lanes) standard was proposed. For administrative purposes, the highway was divided according to the five city boundaries (Suzhou, Wuxi, Changzhou, Zhenjiang and  -4 - Nanjing). Construction of some sections was carried out by local governments with domestic funding and completed in July 1990. Sections financed under the Bank loan included: (a) Zhenjiang-Changzhou (70.7 km); (b) Wuxi-Suzhou (51.2 km) and (c) Suzhou-Anting (Shanghai) (54.6 km), totaling 176.5 km. Feasibility studies and engineering designs for these sections were prepared by the Jiangsu Provincial Transport Planning, Survey and Design Institute (JPTPDI) and reviewed by the Bank. 15. Implementation and Supervision. Civil works for the Nanjing-Shanghai Highway were procured under seven contract packages using international competitive bidding (ICB) for two contracts and national competitive bidding (NCB) for five contracts from prequalified contractors. The detailed designs and bidding documents were completed by April 1989. Highway construction began in November 1989 and was completed in December 1991 as scheduled. 16. The outcome was satisfactory. The 1995 traffic volume on the rehabilitated highway was 90 percent-150 percent higher than the SAR estimates, with a traffic volume of 13,000-21,000 vehicles per day. An unexpected increase of traffic volume, especially of heavy trucks, damaged asphalt pavement in some sections. Since 1994, periodic maintenance, including overlay, has been regularly carried out. At-grade intersections around major towns and cities were upgraded and converted to a grade separation (the grades were separated) to alleviate traffic congestion and bottlenecks. 17. Highway construction was supervised by JPCD staff, who participated in intensive training in supervision and quality control measures before the work began. As a result, the local staff overcame their lack of experience, and the project was awarded the Ministry of Communications (MOC) quality award. 18. Construction costs. The SAR estimate of civil works was Y 370.2 million, including physical and price contingencies, while the final cost, based on certified payments to contractors, was Y 401.9 million, an increase of about 9 percent. Major changes from the original scope of work were made in two areas: In the Lianhu- Kangjiachan section, the original 23 km asphalt pavement was changed to portland cement concrete pavement and the construction cost was reduced. On the Qimen-Anting (Shanghai) section, an originally proposed alignment (new right-of-way), which would have bypassed Kunshan city with a 16 km section, was changed to an alignment using existing roads passing through the city. Thus, the construction cost was reduced to about 40 percent of that originally estimated, with a total length of 54.6 km. Although savings were gained by these two major changes, most were absorbed by the extra work in other sections carried out through variation orders, and by the price escalation that was higher than assumed at appraisal. 19. Economic evaluation. The economic re-evaluation is presented in Annex 1. As re-estimated, the aggregate ERR for the Nanjing-Shanghai Highway Rehabilitation program is 50.4 percent, varying between 34.6 percent and 60.1 percent for individual sections. This is lower than the SAR's estimated ERR of 64.0 percent, varying between  -5 - 53.7 and 78.4 percent, since completion of the highway coincided with the construction of the new Nanjing-Shanghai Expressway. The expressway was opened to traffic in September 1996. It is estimated that 55 percent-72 percent of traffic along this corridor will be diverted to the new expressway after 1997. Except for the Nanjing-Zhenjiang section, the traffic volume on the Nanjing-Shanghai highway already reached capacity for a two-lane, Class II highway in 1995. 20. After four years of operation (1992-1995), the traffic counts show that the diversion factor along the corridor has ranged between 83 percent-95 percent. The 1995 corridor traffic (the sum of traffic on both the parallel existing arterial roads and the new highway) was 81 percent-140 percent higher than SAR estimates. Rehabilitation of the Grand Canal at Danyang 21. The 17-km Danyang section of the Grand Canal was a major component of the southern canal rehabilitation program proposed by Jiangsu Province. Before this project, the section was essentially closed to navigation at low flow stages and could only accommodate barges of under 30 tons at high stages. Thus, the three locks along the canal connecting with the Yangtze River could not be fully utilized. The rehabilitation involved deepening and widening the canal bed, and paving the bank slope with concrete to protect it from erosion. A feasibility study and engineering designs were carried out by JPTPDI, the rehabilitation began in February 1990 and was completed in April 1992. In addition, the 134-m Lingkou bridge was constructed under this component from February 1991-December 1992. 22. Construction costs. Civil works were implemented by contractors. The SAR cost estimate for the rehabilitation was Y 80.8 million, which included physical and price contingencies. The eight contracts totaled Y 47.5 million, while the final cost, which included additional works and price increases, was Y 62.5 million, or 31 percent over the original contract, but about 23 percent below SAR estimates. The reduced cost is the result of contractors strictly conforming to contract conditions and designs. 23. Economic evaluation. As detailed in Annex 1, the re-estimated ERR for the rehabilitation is 24.8 percent, compared to the SAR estimate of 19.6 percent. The increase is most likely due to the ships' increased hauling capacity: The average shipment rose from about 50 tons before the project to 70 tons per ship at completion. Construction of the Nantong Shiplock 24. The capacity of the old Nantong shiplock was 10 million tons per year, and traffic demand had already exceeded this at the time the project was prepared. Thus, a new facility was proposed, which consisted of a lock of 16 m x 220 m and a 4 km approach canal to connect with the existing canal network. The lock was planned to accommodate barges of 1,000 deadweight tons and provide a throughput of 17 million tons a year.  -6 - 25. The feasibility study and engineering designs were prepared by JPTPDI, and the detailed designs and bid documents were reviewed by a foreign expert. A contractor was procured through ICB procedures. The construction started in October 1991 and was completed in December 1993. Construction of the shiplock was supervised by a foreign engineer. 26. Construction costs. The SAR cost estimate was Y 54.6 million, including physical and price contingencies, while the final cost was Y 51.9 million, or about 5 percent below the estimate. This can be explained by the economical approach to design and strict budget control during construction, carried out with the assistance of a foreign expert. 27. Economic evaluation. The re-estimated ERR for the shiplock is 20.8 percent, compared to the SAR estimate of 20.2 percent. The re-estimate was based on final costs, revised indices for shadow pricing, unit transport cost savings through the use of larger vessels, reduced distances, reduced transport costs (lower than the highways), and congestion savings. The average shipment per vessel increased from 60 tons to 90 tons. Construction of the Jiuweigang Bridge 28. The old bridge crossed a flood canal at Jiuweigang over an existing sluice gate that had deteriorated so badly that the road, which passed over the gates, would eventually have to be closed. Thus, the feasibility study recommended a new bridge crossing a few hundred meters north of the old sluice gates. The new bridge was 305 m long and the length of the approach road was 2.4 km. Considering the estimated traffic volume (10,000 vpd in 2000), and the plans to upgrade the entire Yangzhou-Nantong road to Class I standards, a four-lane Class I standard bridge was adopted. Final engineering designs and bid documents were reviewed by the joint foreign/local supervision team. The civil works contract was awarded according to ICB procedures. Construction began in November 1990 and was completed in December 1992. 29. Construction costs and Economic evaluation. The original cost estimate for the Jiuweigang Bridge was Y 33.4 million, including physical and price contingencies, and the final cost was Y 28.4 million, which is about 15 percent below the SAR estimate. The bridge was completed on August 5, 1994; the work was rated excellent. The re- estimated ERR is 21.3 percent. Since an economic evaluation was not carried out at the SAR stage, a comparison cannot be made. Environmental Issues 30. Environmental issues were considered during the design and construction stages, including roadside drainage and slope protection. Since the proposed highway sections were generally located on flat terrain, no major erosion was expected. Nevertheless, JPCD routinely protected the slopes of the higher embankments and cut sections with stone pitching where any significant erosion might have occurred. Also, the rehabilitated road, with its wider shoulders, promoted the separation of motorized and non-motorized  -7 - traffic. Thus, the motorized traffic could travel more smoothly, reducing air pollution and accidents. Moreover, the project discouraged the dangerous practice of planting rows of trees on the shoulders. Instead, JPCD encouraged tree planting at the foot of embankments, which helps reduce vehicular air and noise pollution. 31. The two waterway components had no negative impact on the waterways' ecology. The widening of the Danyang section of the Grand Canal helped improve water quality by increasing the volume discharged from the Yangtze River into the enlarged canal. A comprehensive study of water quality problems in the Grand Canal was undertaken as programmed. Land Acquisition and Resettlement 32. Land acquisition, resettlement and compensation procedures agreed upon at negotiations were followed. The land requirements originally estimated changed due to the addition of three road sections under the RNR program and the reduced length on the Qimen-Anting section. The cost of land acquisition and compensation increased from Y 118.0 million to Y 247.4 million due to the long interval between the original estimates and actual compensation; 10,400 individuals were resettled. A Bank Resettlement Review Mission visited the province in November/December 1994, and, after assessing the resettlement process, confirmed that actions were carried out satisfactorily and in line with Bank policies and procedures. Procurement of Equipment 33. The following items were purchased: (a) basic road maintenance equipment ($10.15 million); (b) laboratory equipment for the central soils and materials laboratory ($1.17 million); and (c) computer-aided design system ($0.32 million). The final cost, $11.64 million, was less than appraised. 34. The loan agreement called for about 91 percent of the equipment to be procured through international competitive bidding (ICB) and the rest by international shopping on the basis of a comparison of price quotations. However, since it was later discovered that some of the items needed were produced by very few firms, the Bank waived the ICB requirements and agreed they could be procured through international and local shopping. 35. Laboratory equipment acquired for JPCD's central soils and materials laboratory helped modernize the technology to maintain the quality of materials and civil works. The computer-aided design system helped speed up and increase the accuracy of engineering designs at the design institute. The instruments and computer hardware and software chosen for the RDB were also satisfactory and met all expectations. Most of the maintenance equipment was delivered to Nanjing in early 1996, and all of it has been used for routine and periodic maintenance.  -8 - Staff Training Program 36. Within the project, measures were taken to strengthen various institutions. Under the staff training program, about 40 JPCD officials were to be trained abroad in transport planning, soils and materials, transport economics, financial management and accounting, highway maintenance and equipment management, construction management and supervision. However, as of June 1996, only 10 had been trained, due to three factors. First, because of the wide range of subjects to be covered, it was difficult to find a consulting firm or institute to perform the task. Second, those to be trained had very limited or no English (the language in which they would be trained). Third, two other major expressway projects were implemented at the same time as this project, and JPCD could not free up any young engineers to be trained. Programs for Road Planning, Pavement Strengthening and Maintenance 37. When the project was prepared, it was thought the initial data collection would be part of a study whose objectives included: (a) establishing a road data base (RDB) compatible with national guidelines; (b) beginning regular monitoring of paved roads; (c) identifying where pavements needed overlays and strengthening, and resource requirements for about 500 km of paved roads; and (d) introducing a pilot maintenance planning and management system, compatible with national guidelines, to develop a systematic approach. The study was expected to take 15 months and involve about 120 person-months of local and foreign personnel input. 38. However, the study was not carried out as planned because it was overtaken by central Government policies, which instituted a nationwide approach to road planning, pavement strengthening and maintenance. By the early 1990s, reasonably good progress had been made with both the RDB and the pavement management system (PMS). Therefore, MOC and the Bank agreed it would be more efficient and consistent to develop local capability for both of these programs. To introduce the PMS, 15 provinces/municipalities were selected, one of which was Jiangsu. 39. Road Data Bank. A pilot study was implemented in the following five cities in southern Jiangsu: Nanjing, Zhenjiang, Changzhou, Wuxi and Suzhou. Using computer hardware and software and instrumentation provided under the project, JPCD created a data base comprising 500 items, and the municipal highway bureaus collected data on 2,100 km of road. The Bank supported the data bank by financing equipment, including computer software and hardware, and an extensive RDB study tour that enabled a group of Chinese staff to be exposed to techniques and methods abroad. 40. Pavement Management System. The PMS, which was indirectly integrated with the RDB, can provide network- and project-level analysis for flexible and concrete pavements. JPCD's PMS, which is compatible with the Chinese system, has extensive economic analysis capacity, including establishing optimum programs for up to 10 years. The software was tailored to handle the province's rehabilitation programming, as well as maintenance. It was successfully implemented on a pilot basis for 2,100 km of national  -9 - and provincial roads in southern Jiangsu. As a result, JPCD is expanding it to six more cities with a flexible/concrete pavement network of 4,000 km and planning to train 50 technical personnel. Assistance to Construction Units 41. The quality and capability of city and county construction units needed to be improved in the short run, and, given the ambitious infrastructure construction proposed over the next 10 years, ultimately converted into independent, self-sustaining enterprises. The project provided the units with assistance for introductory seminar-workshops and a study to develop a longer-term plan of action for JPCD to achieve its objectives. 42. The training program, carried out in three phases, was successful. Phase 1 reviewed and evaluated an inventory of existing enterprises; it then recommended changes to JPCD's current reorganization plan to improve the enterprises' ability to undertake larger and more complex construction projects. Phase II was carried out in 1995: About 80 managers or project managers from 19 construction enterprises participated in classroom and on-the-job training and seminars, and 75 construction equipment operators and mechanics were trained. Of the managers who participated, about 20 were sent to Australia for further training in Phase III. As a result, the quality of construction and construction practices improved, but it is still believed that enterprises are not performing at full efficiency. Provincial Transport Corridor Study 43. A preliminary study was carried out to reconcile long-term development plans and short-term options in southern Jiangsu's trunk network. The study aimed to: (a) define a highway development plan and associated investment programs for the province; (b) evaluate and compare the alternatives proposed by user-benefit economic analysis and set the priorities; and (c) provide high capacity and efficient roadways as well as important links to adjoining provinces. 44. The results of the economic analysis indicated the highest ranked highway scheme was the route connecting Lianyungang and Nanjing and the best bridge scheme was the one at Jiangyin. Under all scenarios, whether single or combined tests, or with high costs and low benefits, these two schemes produced the highest return. The next best scheme was the highway connecting Xinyi to Jingjiang. The study recommended the investment program should initially include these three schemes. C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT 45. As mentioned in paragraph 4, the project was greatly affected by the two-year delay. Because of inflation and design changes, the original cost estimate of local currency increased by about 35 percent and by roughly 14 percent in US dollars (Part II- Tables 8a and 8b). The percentage difference reflects the devaluation of the local currency from 1989-1995. Implementation delays were substantial for some of the  - 10- components, but less so overall. As originally expected, the loan/credit closed on June 30, 1996. In general, the project was substantially completed by the end of 1995, as reflected by the level of disbursements at that time. However, the disbursement pattern highlights the slower-than-expected progress during FY93-FY95 (Part II-Table 4). 46. The completion date of the RNR Program was delayed by about one-and-a-half years because three additional road sections were included in Phase III, which started in June 1995. Rehabilitation of the Grand Canal at Danyang took about three years to complete, instead of the two originally scheduled. The delay occurred mainly in finalizing designs and bidding documents and procuring equipment; it could be that the schedule for procurement was overly optimistic, given the executing agency's limited experience with Bank requirements and procedures, and domestic internal clearance constraints. Also, implementation of the technical assistance and training component, except for the construction supervision and training, was substantially delayed, mainly because of the slowness in preparing the studies and selecting consultants. D. PROJECT SUSTAINABILITY 47. The civil works components should be sustainable if routine and periodic maintenance is carried out, and remedial actions are taken promptly, in case of emergencies generally caused by unfavorable weather and geological conditions in the project sites. So far, since 1994, periodic maintenance involving overlay has been adequate. 48. The equipment procured for the maintenance and operation of the highway was carefully selected to meet quality and up-to-date technology requirements. Local personnel were trained to operate the units, and spare parts and maintenance facilities are available to ensure the units will provide many years of service. 49. JPCD appears interested in developing the PMS program, and regards its operation as an important tool for road maintenance and improvements. The program is expected to be maintained, data regularly collected, and information disseminated more widely in the future, to enhance road maintenance. 50. The information and experience gained from the staff training component under the construction units study are expected to be disseminated throughout JPCD, to improve the administration, operation and management methods, construction practices and highway-specific technology in Jiangsu's construction units and enterprises. Results of the transport corridor study will serve as a basis to create a highway development plan in Jiangsu and the corresponding investment programs. E. BANK PERFORMANCE 51. In general, the identification of the components and the preparation, appraisal and supervision of the project were satisfactory, although in hindsight, the following weaknesses have been noted:  (a) The lower re-estimated ERR (50.4 percent versus 60.4 percent in the SAR) for the Nanjing-Shanghai Class II Highway was due to a conceptual oversight in forecasting traffic distribution, since the SAR estimate did not take account of the diversion of traffic to the new Nanjing-Shanghai expressway that runs along the same corridor (the feasibility study for the expressway was produced in 1988 and construction was completed in September 1996). However, although the revised figure is lower than was expected, it still represents a viable investment. (b) The staff training program could have been prepared in greater detail, but more importantly, during supervision, the Bank should have realized that more training should have occurred within China, as opposed to abroad. This would have reduced the high cost of training and study tours abroad for a relatively small number of participants and more staff could have attended, since it would not have required them to be away for longer periods. (c) The expectation that both RDB and PMS could be established in 15 months, without JPCD's management and staff having had previous experience in these areas, and considering the complexity of the study's objectives, was overly optimistic. 52. The Bank's involvement during implementation was adequate and appropriate for the project's size and complexity. On average, there were two Bank missions a year over the five-year implementation period. The missions' visits to construction sites helped highlight noticeable deficiencies and alert the executing agencies and supervisors to the need to exercise more effective quality control. These suggestions were generally well received by the executing agencies and helped sharpen their focus on some of the deficiencies noted by the missions. 53. The Bank showed flexibility in dealing with the design changes, so as to avoid interrupting and delaying the execution of works. These were pragmatic responses to problems that were unforeseen during project preparation. Although some of the changes added to the project's cost, they will improve the operation of the highway network. 54. Overall, the project was implemented within the terms of the loan agreement and in substantial compliance with the Bank's procedural requirements. F. BORROWER PERFORMANCE 55. JPCD was a first-time executing agency for the Bank-assisted transport project. It benefited substantially from preparing and administering it, and from organizing and managing the construction of high-class highways. JPCD responded well to the added responsibilities and demonstrated it is a well-organized institution with high-caliber technical staff. Its administrative system reflects good record keeping and comprehensive reporting. JPCD also demonstrated its keen interest in controlling the quality of the  - 12- highway construction, helping the construction supervision team enforce technical specifications and other quality control measures. The Department clearly understood the Bank policies and procedures, which helped reduce excessive delays, and greatly contributed to the timely completion of the project. Its cooperation and well-prepared documents were also very helpful in preparing this ICR. 56. Within three years of the opening of the Nanjing-Shanghai Highway, remedial work, including overlay and reconstruction of pavement, was necessary (para. 16). The main reason for the damage was the underestimate during highway design of the number of heavy trucks and their weight. G. ASSESSMENT OF OUTCOME 57. Despite specific delays with some components, overall implementation was satisfactory, primarily because its development objectives were achieved and are considered sustainable. Economic development of southern Jiangsu, whose gross agricultural and industrial value grew at 25.4 percent a year from 1988-1995, was supported by improvements to the highway network. These involved increasing the length of Class II roads from 2,533 km in 1989 to 4,396 km in 1995 and highway density from 280 kml'000 km2 in 1989 to 304 km/'000 km2 in 1995, as well as implementing the project. In addition, JPCD's capacity to plan and budget, construct, supervise, maintain and operate the provincial highway system was strengthened. As a result of the experience gained on the Bank-financed highway project, which included extensive institutional strengthening, JPCD completed high-quality work on the 280 km Nanjing- Shanghai expressway according to the original implementation schedule. 58. Phase I civil works under the RNR program were carried out by force account, while the rest were conducted by either ICB or NCB. The contractors' performance on the Nanjing-Shanghai Highway was adequate. Overall, the highway was constructed to a satisfactory standard but with less-than-desirable pavement quality on some sections. Although the implementation of the RNR program was substantially delayed, it met expectations with regard to administration control and technical requirements, and is economically viable. The Grand Canal program and Nanjing-Shanghai Highway project were awarded an MOC Quality Award. 59. Sectoral development, in the context of the RDB and PMS programs, was successful; it was achieved primarily because of the dedication and perseverance of the personnel in the provincial highway administration and technical institutions. Conclusions and recommendations from the Provincial Transport Corridor Study were useful and reflected in the transport planning for the Ninth Five-Year Plan. 60. The goal of the training program was to expose JPCD staff to new concepts, approaches and technology. However, the program involved fewer trainees than expected, partly because of language problems.  - 13 - H. FUTURE OPERATION 61. JPCD is responsible for operating and maintaining all civil works components included in the project. It built three toll stations along the Nanjing-Shanghai Highway to collect tolls; these revenues will partly be used to repay the Bank loan, but mostly to rehabilitate and maintain the major highways. Equipment procured under the project will be used for the maintenance effort. With respect to the PMS, JPCD intends to make even better use of the system by allocating maintenance funds based on PMS data. Also, JPCD will try to build up its RDB, for which MOC's active support will be needed. 62. The Grand Canal Rehabilitation Program was a success. Based on this achievement and performance, the second Inland Waterway Project is now being prepared by the Bank. I. KEY LESSONS LEARNED 63. The key lessons learned from this project, which is still ongoing but substantially completed, include the following: (a) Although the quality of highway civil works construction was generally satisfactory, a number of sections exhibited some defects. The quality of highway construction is a common issue in highway projects in China. The quality problem was largely related to the contractors' lack of experience in carrying out civil works according to technical specifications and contracting requirements; also to a limited concern with quality. To correct this, the executing agency could be more rigorous in prequalifying contractors, thereby ensuring they have adequate performance records and resources to carry out the work efficiently and satisfactorily. (b) Partly because of a language problem and because of a heavy involvement with other projects, only 10 staff were sent abroad under the staff training program. Thus, the Bank should encourage the executing agencies to invite foreign experts to provide training within China, rather than sending them outside the country. It would seem desirable for the Bank, Ministry of Finance and MOC to address the issue as soon as possible, perhaps by appointing a technical training institution in China to coordinate highway subsector training programs nationwide. (c) The lower-than-expected volume on the Nanjing-Shanghai highway could have been anticipated if the SAR team had contacted all the relevant agencies, along with the consultants working on the feasibility study, for information about the parallel expressway being proposed.  - 14- PART II: STATISTICAL TABLES TABLE 1: SUMMARY OF ASSESSMENTS A. Achievement of Objectives Substantial Partial Negligible Not Applicable Macroeconomic policies x Sector policies x Financial objectives x Institutional development x Physical objectives x Poverty reduction x Gender issues x Other social objectives x Environmental objectives x Public sector management x Private sector development x B. Project Sustainability Likely Unlikely Uncertain x C. Bank Performance Highly Satisfactory Satisfactory Deficient Identification x Preparation assistance x Appraisal x Supervision x D. Borrower Performance Highly Satisfactory Satisfactory Deficient Preparation x Implementation x Covenant compliance x Operation (if applicable) x E. Assessment of Outcome Highly Satisfactory Unsatisfactory Highly Satisfactory Unsatisfactory x  - 15 - TABLE 2: RELATED BANK LOANS/CREDITS Year of Loan/Credit Title Purpose Approval Status Preceding Operations 1. Highway Provincial road network expansion/ FY85 Completed Ln 2539-/Cr 1954-CHA improvement 2. Shaanxi Provincial Highway See footnote aI FY88 Completed Ln 2952-CHA 3. Jiangxi Provincial Highway See footnote a FY89 Completed Cr 1984-CHA Following Operations 1. Beijing-Tianjin-Tanggu Expressway See footnote aI FY87 Completed Ln 2811/Cr 1792-CHA 2. Sichuan Provincial Highway See footnote aI FY88 Ongoing Ln2951/Cr 1917-CHA 3. Shandong Provincial Highway See footnote LI FY89 Ongoing Ln 3073/Cr 2025-CHA 4. Zhejiang Provincial Highway See footnote LI FY92 Ongoing Ln 3471 -CHA 5. Henan Provincial Highway See footnote LI FY93 Ongoing Ln 353 1-CHA 6. Guangdong Provincial Highway See footnote LI FY93 Ongoing Ln 3530-CHA 7. Fujian Provincial Highway See footnote LI FY94 Ongoing Ln 368 1-CHA 8. Hebei/Henan National Highway See footnote LI FY94 Ongoing Ln 3748-CHA 9. Xinjiang Highway I See footnote LI FY95 Ongoing Ln 3787-CHA 10. Shanghai-Zhejiang Highway See footnote LI FY96 Ongoing Ln 3929-CHA 11. Second Shaanxi Provincial Highway See footnote LI FY96 Ongoing Ln 3986-CHA 12. Henan Provincial Highway II See footnote lI FY96 Ongoing Ln 4027-CHA /1 These highway projects typically have had the following components: (a) construction of a major highway; (b) improvement of provincial roads; (c) procurement of road maintenance equipment; and (d) institutional development components, such as RDB and PMS programs, staff training and selected subsector-oriented studies.  -16- TABLE 3: PROJECT TIMETABLE Steps in project cycle Date planned Date actual Idendfication N.A. Apr-88 Preappraisal N.A. Oct-88 Appraisal Dec-88 Jan-89 Negotiations May-89 May-89 Board presentation Jun-89 Apr 9, 1991 Signing Jun-91 Jul 10, 1991 Effectiveness Sep-91 Sep 6, 1991 Project completion Dec 31, 1995 Jun30, 1996 Loan closing Jun 30, 1996 Jun 30, 1996 TABLE 4: LOAN/CREDIT DISBURSEMENT: CUMULATIVE ESTIMATE AND ACTUAL ($ million) FY92 FY93 FY94 FY95 FY96 FY97 Appraisal estimate 41.3 84.6 115.6 138.6 153.6 Actual 51.7 71.5 109.1 128.7 151.6 153.1 Adjusted appraisal estimate la 51.5 71.3 108.7 128.3 151.1 - Actual as % of adjusted estimate 124.7% 84.3% 94.0% 92.6% 98.4% 100.0% Date of final disbursement August27, 1996 La Appraisal estimate adjusted for SDR/$ exchange rate variation.  -17- TABLE 5: KEY INDICATORS FOR PROJECT IMPLEMENTATION Estimated Actual Key implementation indicators in SAR Start Complete Start Complete Construction 1. Road Network Rehabilitation Jul-89 Dec-94 Jul-89 Jun-96 2. Nanjing-Shanghai Road rehabilitation Nov-89 Dec-92 Nov-89 Dec-91 3. Grand Canal Rehabilitation at Danyang Feb-90 Dec-91 Feb-90 Dec-92 4. Nantong Shiplock Oct-91 Sep-93 Oct-91 Dec-93 5. Jiuweigang Bridge Nov-90 Dec-92 Nov-90 Dec-92 Equipment 6. Road maintenance equipment May-92 Jun-93 Aug-95 Dec-95 (Award to delivery) 7. Central Laboratory and CAD May-92 Jun-93 Oct-94 Aug-95 (Award to delivery) Consulting Services 8. Construction supervision and training Oct-89 Jul-93 Oct-89 Nov-93 9. Pavement evaluation and preparation of a Jul-91 Nov-92 Mar-93 Sep-95 pavement strengthening program 10. Road Data Bank Jul-91 Nov-92 Mar-93 Sep-95 11. JPCD staff training La Aug-91 Oct-92 Dec-93 Jun-96 12. Assistance to transport construction units Aug-91 Dec-91 Aug-94 Jun-96 13 Provincial corridor study Aug-91 Oct-92 Feb-95 May-96 l Only 10 staff out of a planned 40 were sent abroad for training.  - 18 - TABLE 6: KEY INDICATORS FOR PROJECT OPERATIONS Length (kn) Traffic (1994 AADT) Key operating indicators in SAR Estimated Actual Estimated Actual 1. Road Network Rehabilitation Phase I Changzhou-Tianwang 71.0 68.6 5,400 (in 1993) 4,500 Changshu-Suzhou 33.5 33.5 7,100 (in 1993) 8,390 Pingwang-Wangjiangjing 14.5 14.0 4,500 (in 1993) 8,300 Xiaohe-Huangtu 30.0 31.2 4,700 (in 1993) 3,680 Hutai-Caoqiao 13.0 13.4 6,900 (in 1993) 9,830 Pingwang Bridge (bridge) 260m 344m 5,300 (in 1993) 9,820 (approach) 3km 3.9km Phase II Gelong-Yaozhen-Guli 382 38.2 11,025 (in 1994) 12,050 11,576 (in 1995) Changshu-Wuxi 41.2 36.6 7,762 (in 1994) 12,800 8,150 (in 1995) Huangtu-Xiagang 17.5 17.2 5,612 (in 1994) 11,130 6,005 (in 1995) Tianwangsi-Lishui 18.7 20.6 6,765 (in 1994) 3,040 7,103 (in 1995) Phase III Danyang-Jintan-Liyang 64.3 63.8 4,200 (in 1995) 6,300 Changshu-Luyuan 27.8 25.7 12,960 5,930 Zhenjiang-Xiaohe 42.0 42.0 5,930 2,740 Yunting-Yaluji 37.5 38.6 3,480 2,810 Qimen Interchange - - 13,470 28,840 Gechun-Danyang 22.2 22.2 Qishuyan-Yuecheng 22.4 22.4 Kunshan-Taichang 13.6 13.6 2. Nanijng-Shanghai Highway _ e ltati Zhenjiang-Changzhou 72.4 70.7 7,080 (in 1993) 17,970 Wuxi-Suzhou 52.6 51.2 9,040 17,850 Suzhou-Anting 52.0 54.6 9,370 20,680 3. Grand Canal Rehabilitation (Danyang) 17.0 17.0 11 million tons 6.1 million (in 1993) tons 4. Nantong Shiplock 220 x 16 x 3.3 220 x 16 x 17.6 million tons 7.5 million 3.3 tons 5. Jiuweigang Bridge (bridge) 260m 41 Im 10,000 (in 2000) 13,250 (approach) 3 km 2.4 km  - 19 - TABLE 7: STUDIES INCLUDED IN PROJECT Study Purpose as defined at Status Impact of Study Appraisal/Redefined 1. Highway Data Bank Determine the bearing capacity The study was com- Provincial- and city- Preparation, Pavement and residual life of the existing pleted in 1995. A pri- level data banks on Evaluation and Strength- roads in relation to present and ority 5-year program national and provin- ening Program and estimated future traffic. A five- and related budget cial roads have been, Maintenance Manage- year program would be requirements, along or are being, set up, ment Study prepared to identify the with the first year's which will help manpower resources, materials, projects and project- devise a more equipment and funds needed to level PMS, were practical program for strengthen and maintain paved prepared. road maintenance. roads. A computerized Road Data Bank would be set up which would include road and pavement inventories and traffic volumes. 2. Study on the Develop- Improve the quality and capa- All three phases were Most trainees were ment of Construction city of city and county construc- completed, and a fnal enterprise managers, Units tion units in the short run and report on the study was who will introduce begin converting these units prepared. what they learned in into independent, self-sustaining the study into their enterprises that can operate in policy-making and an environment of competitive programming. bidding in the longer run. 3. Provincial Transport Evaluate, from both an econom- The final report on the The study's Corridor Study ic and engineering perspective, study was completed conclusion and alternative locations for a possi- and submitted to the recommendation will ble extension or addition of pro- Bank. be considered when vincial transport corridors; iden- JPCD finalizes and tify and assess a broad range of implements its technical options and their transport plan and costs; and estimate the approxi- program for the Ninth mate order of magnitude of ben- Five-Year Plan. efits for each alternative, determine its optional timing, and estimate the economic losses from either deferring or advancing the investment from the optional year.  - 20 - TABLE 8A: PROJECT COSTS (Yuan million) Appraisal estimate Actual/latest estimate Item Local Foreign Total Local Foreign Total Civil Works Road Network Rehabilitation 454.2 302.8 757.0 754.6 651.6 1,406.2 Nanjing-Shanghai Road 130.3 159.4 289.7 220.5 181.4 401.9 Danyang Canal Rehabilitation 38.0 25.2 63.2 31.4 31.1 62.5 Nantong Shiplock 18.4 24.3 42.7 31.2 20.7 51.9 Jiuweigang Bridge 11.8 14.3 26.1 15.0 13.4 28.4 Subtotal 652.7 526.0 1,178.7 1,052.7 898.2 1,950.9 Supervision of Construction 11.5 9.2 20.7 0.0 5.2 5.2 Development of Construction Units 0.4 1.5 1.9 0.0 3.3 3.3 Equipment 6.5 49.5 56.0 0.0 96.3 96.3 Technical Assistance and Training 2.3 9.6 11.9 0.0 10.6 10.6 Base Cost 673.4 595.8 1,269.2 1,052.7 1,013.6 2,066.3 Physical Contingencies 58.5 51.9 110.4 0.0 0.0 0.0 Price Contingencies 118.0 104.6 222.6 0.0 0.0 0.0 Subtotal 849.9 752.3 1,602.2 1,052.7 1,013.6 2,066.3 Land Acquisition 118.0 - 118.0 247.4 - 247.4 Total Project Costs 967.9 752.3 1,720.2 1,300.1 1,013.6 2,313.7  -21 - TABLE 8B: PROJECT COSTS ($ million) Appraisal estimate ActuaVlatest estimate Item Local Foreign Total Local Foreign Total Civil Works Road Network Rehabilitation 87.0 58.0 145.0 109.6 94.6 204.2 Nanjing-Shanghai Road 25.0 30.5 55.5 40.1 33.0 73.1 Danyang Canal Rehabilitation 7.3 4.8 12.1 5.7 5.6 11.3 Nantong Shiplock 3.5 4.7 8.2 5.4 3.6 9.0 Jiuweigang Bridge 2.3 2.7 5.0 2.7 2.4 5.1 Subtotal 125.1 100.7 225.8 163.5 139.2 302.7 Supervision of Construction 2.2 1.8 4.0 0.0 0.6 0.6 Development of Construction Units 0.1 0.3 0.4 0.0 0.4 0.4 Equipment 1.3 9.5 10.8 0.0 11.6 11.6 Technical Assistance and Training 0.5 1.8 2.3 0.0 1.3 1.3 Base Cost 129.2 114.1 243.3 163.5 153.1 316.6 Physical Contingencies 11.2 9.9 21.1 0.0 0.0 0.0 Price Contingencies 13.6 12.2 25.8 0.0 0.0 0.0 Subtotal 154.0 136.2 290.2 163.5 153.1 316.6 Land Acquisition 22.6 - 22.6 39.0 - 39.0 Total Project Costs 176.6 136.2 312.8 202.5 153.1 355.6 Exchange rate (planned) $1.00 = Y 5.52 Exchange rate (actual) $1.00 = Y 6.62  - 22 - TABLE 8c: PROJECT FINANCING ($ million) Appraisal estimate Actual/late estimate Source Local Foreign Total Local Foreign Total IBRD/IDA 17.4 136.2 153.6 0.0 153.1 153.1 Provincial Government 159.2 0.0 159.2 202.5 0.0 202.5 Total 176.6 136.2 312.8 202.5 153.1 355.6 TABLE 9: ECONOMIC COSTS AND BENEFITS Costs /a Benefits /b NPV Lc ERR (%) SAR Nanjing-Shanghai Highway 788.80 538.6 1,559.2 64.0 Road Network Rehabilitation: Phase I 515.60 87.98 N.A. 42.0 Phase II 555.44 127.71 N.A. N.A. Phase III 858.41 95.40 N.A. N.A. Subtotal 1,929.45 379.64 Grand Canal at Danyang 108.84 13.81 83.57 19.6 Nantong Shiplock 91.52 7.47 29.9 20.2 Jiuweigang Bridge 52.73 6.30 N.A. N.A. Total 2,971.34 1,391.04 N.A. N.A. ICR Nanjing-Shanghai Highway 607.96 183.69 4,423.6 50.4 Road Network Rehabilitation: Phase I 374.00 N.A. 402.2 23.9 Phase II N.A. N.A. 217.8 20.3 Phase III N.A. N.A. 241.5 19.3 Subtotal 1,627.99 N.A. 861.5 21.4 Grand Canal at Danyang 101.92 12.77 278.7 24.8 Nantong Shiplock 78.73 53.43 80.0 20.8 Jiuweigang Bridge 56.14 N.A. 46.8 21.3 Total 2,472.32 N.A. 5,108.0 38.5 /a December 1996 prices (Yuan million). Lb First year benefits (December 1996 prices, with different opening years) /c Discount rate = 12% /d Two-lane NJH, opening in 1993. /e Four-lane NJH, opening in 1996. Lf Four-lane NJH, assumed opening in 2003.  - 23 - TABLE 10: STATUS OF LEGAL COVENANTS Cove- Original Revised Agree- nant Present fulfillment fulfillment ment Section type Status date date Description of covenant Comments Credit 2.02(a) 3 C Expenditures made in respect of None. the reasonable cost of goods and services. 2.02(b) I C Open and maintain a special None. account. 3.01(a) 5 C Commitment to project objectives None. and meeting obligations by beneficiaries under the Project Agreement. 3.01(b) 3 C Satisfactory onlending None. arrangement to Jiangsu Province. 3.03 5 C Meeting requirements of General None. Conditions, Sections 9.03-9.08 4.01(a) and (b) I C Maintaining adequate financial None. records and audit reporting. Loan 3.02 5 C Meeting requirements for General None. Conditions, Section 9.04-9.09. Project 2.01(a) 5 C Commitment to project objectives None. and provisions of funds. 2.01(b), 10 C Selection of the roads to be None. Schedule 1(a) established in accordance with criteria and procedures. 2.01(b), 10 C Provision of a list of roads None. Schedule l(b) selected. 2.01(b), 10 CD Implementation of studies in Delays in Schedule 2 accordance with terms of implementation reference and timing. of studies. 2.01(b), 10 CP Implementation of staff training in Some staff Schedule 3 accordance with a program training was not agreed. undertaken. 2.01(b), 7 C Carry out the resettlement. None. Schedule 4 2.02 5 C Compliance with procurement None. requirements in Schedule 3 of Development Credit Agreement. 2.03 5 C Meeting requirements of General None. Conditions, Sections 9.03-9.09 (Credit Agreement) and Sections 9.04-9.09 (Loan Agreement). 2.04(a) 9 C Exchange of views with the Bank None. 2.04(b) 9 C Information on interference with None. project implementation 3.01 1 C Maintain adequate financial None. records and audit accounts. Covenant Class: Status: 1 = Accounts/audits 8 = Indigenous people C = covenant complied with 2 = Financial performance/revenue 9 = Monitoring, review, and reporting CD = complied with after delay generation from beneficiaries 10 = Project implementation not CP = complied with partially 3 = Flow and utilization of project covered by categories 1-9 funds 11 = Sectoral or cross-sectoral 4 = Counterpart funding budgetary or other resources 5 = Management aspects of the allocation project or executing agency 12 = Sectoral or cross-sectoral policy/ 6 = Environmental covenants regulatory/institutional action 7 = Involuntary resettlement 13 = Other  - 24 - TABLE 11: COMPLIANCE WITH OPERATIONAL MANUAL STATEMENTS There was no significant lack of compliance with an applicable Bank Operational Manual Statement (OD or OP/BP) TABLE 12: BANK RESOURCES: STAFF INPUTS FY 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997&a Total Preappraisal 38.5 44.2 - - - - - - - - 82.7 Appraisal - 35.1 - - - - - - - - 35.1 Negotiations - 2.1 6.6 14.6 - - - - - - 23.3 Supervision - - - 1.5 21.0 7.5 12.7 5.5 11.9 - 60.1 Completion - - - - - - - - - 5.3 5.3 Total 38.5 81.4 6.6 16.1 21.0 7.5 12.7 5.5 11.9 5.3 206.5 /a As of October 1, 1996.  -25 - TABLE 13: BANK RESOURCES: MISSIONS Performance rating Specialized Imple- Devel- Stage of project cycle Month/ Number of Days staff skills mentation opment Type of year persons in field represented La status & objectives problems Preidentification 12/87 2 5 00 Identification/Preparation 04/88 2 5 EC,EN Preappraisal 10/88 4 5 EC,EN,EN,FA Appraisal 01/89 4 14 EC,EN,EN,OO Negotiation 05/89 4 - EC,EN,DO,LC, Postappraisal 08/89 1 2 EN Postappraisal 09/89 3 3 EC,O0,TE Board approval 04/91 - - - Signing 06/91 Effective 09/91 - - - Supervision 1 10/91 3 10 EN,EN,00 I I Supervision 2 04/92 3 5 EN,EN,OO 2 1 Supervision 3 11/92 2 5 EN,00 2 1 Ic Supervision 4 11/93 2 5 EN,OO 2 1 /c Supervision 5 05/94 2 5 EN,00 2 1 La Supervision 6 11/94 1 6 RS - - Supervision 7 07/95 2 6 EN,TS 2 1 Supervision 8 05/96 2 6 EN,RA 2 1 Completion 11/96 2 5 EN,RA - - /a DO: Disbursement Officer; EC: Economist; EN: Engineer; FA: Financial Analyst; LC: Legal Counsel; 00: Operation Officer; RA: Research Analyst; RS: Resettlement Specialist; TE: Transport Economist; TS: Transport Specialist. /b 1: Highly satisfactory; 2: Satisfactory. /c Typical problems included: implementation delays in technical assistance and studies.   -27 - ANNEX 1 ANNEX 1: ECONOMIC EVALUATION Preface 1. The Staff Appraisal Report (SAR) for the Jiangsu Provincial Transport Project (Report No. 7706-CHA) presented the economic evaluation for the following project components: (a) the upgrading of Nanjing-Shanghai Class II highway; (b) rehabilitating of provincial Road Network Rehabilitation (RNR) program, by three phases, in the southern Jiangsu area; (c) rehabilitating a 17-km section of the Grand Canal at Danyang; and (d) constructing a new shiplock at Nantong and an adjacent bridge at Jiuweigang. 2. The economic analysis presented in this ICR is based on updated data on traffic, vehicle operating cost (VOC), ship operating cost (SOC), economic cost and transport user benefits, taking into account revised assumptions regarding future traffic growth projection. The methodology used in the economic analysis for this ICR is similar to that used in the SAR and is summarized in the following: (a) capital investment and maintenance costs have been revised to reflect December 1996 prices and are included in the cost stream; (b) the benefit stream, also reflecting December 1996 prices, has been included and consists of savings in VOC, SOC, reduced traffic congestion on the existing route, and reduction in losses as a result of increased route safety; (c) a project life of 20 years has been assumed and the capital investment period for all routes commences in 1988-91 and 1996, depending on the scenarios; and (d) full benefits started to accrue on the Nanjing-Shanghai Class II Highway and Grand Canal in 1992, Jiuweigang bridge in 1993, Nantong Shiplock in 1994, and road network from 1993-96, depending on the roads.  - 28 - ANNEX 1 3. During implementation of the project, there were some modifications related to the provincial road development plan, e.g., (a) the construction of Nanjing-Shanghai expressway; and (b) implementation of Phase II and Phase III under RNR program. These factors were taken into consideration in the economic analysis for this ICR. PART I: NANJING-SHANGHAI CLASS II HIGHWAY 4. As in the SAR, the highway was divided into five sections for economic evaluation. Section 1: from Nanjing to Zhenjiang (57.3 km); Section 2: from Zhenjiang to Changzhou (70.7 km); Section 3: from Changzhou to Wuxi (45.6 km); Section 4: from Wuxi to Suzhou (51.2 km); and Section 5: from Suzhou to Anting (Shanghai) (54.6 km). The Bank financed only three sections of the highway (Sections 2, 4 and 5). The other two sections of the highway (Sections 1 and 3) were financed by domestic finding and completed in July 1990, one-and-a-half years earlier than the other three Bank-financed sections. As in the SAR, cost and benefit analysis were carried out separately for each of the three sections, as well as the three sections together. 5. Coincident with the implementation of the Bank-financed highway project, the Jiangsu Provincial Communications Department (JPCD) constructed the new Nanjing- Shanghai Expressway. It was completed and opened to the public in September 1996. It is estimated that after 1997, 55-72 percent of the total highway corridor traffic will be diverted to the new expressway. It is noted that except for the Nanjing-Zhenjiang section, the traffic volume on the Nanjing-Shanghai highway already reached capacity for a two- lane, Class II highway in 1995. Corridor Traffic 6. The 1995 highway corridor traffic and its distribution between the old and the new highway are presented in the following table, indicating SAR forecast and actual traffic census data:  -29 - ANNEX 1 NUMBER OF MOTORIZED VEHICLES PER DAY (AADT) FOR 1995: The Old Road The New Highway Total Corridor Diversion Factor (DF) (1) (2) (3)=(1)+(2) (4)=(2)/(3) SAR Section 1 2,195 5,121 7,316 70.0% Section 2 1,292 7,329 8,621 85.0% Section 3 1,241 11,178 12,419 89.6% Section 4 1,651 9,356 11,007 85.0% Section 5 1,149 9,679 13,828 70.0% ICR Section 1 1,310 13,104 14,414 90.9% Section 2 2,695 17,968 20,663 87.0% Section 3 1,071 21,411 22,482 95.2% Section 4 2,677 17,845 20,522 87.0% Section 5 4,115 20,580 24,695 83.3% Ratios (ICR/SAR) Section 1 -40.3% 155.9% 97.0% -- Section 2 108.6% 145.2% 139.7% Section 3 -13.7% 91.5% 81.0% Section 4 62.1% 90.7% 86.4% Section 5 258.1% 112.6% 128.1% Source: JPCD and the Bank Staff 7. As shown above, the 1995 corridor traffic (i.e., the sum of traffic on the parallel sections of the existing arterial road and the new highway), was much higher than the SAR estimates, by a range of about 81-140 percent for each of the five sections. For traffic distribution of the corridor (i.e., between the existing arterial road and the new highway), the five sections were not substantially different from that expected at project appraisal. This has been reflected in the Diversion Factor (DF) for each section of the corridor, which indicates that so far, a slightly higher-than-expected percentage of the traffic prefers to travel on the new highway. 8. As indicated in the above table, after about four years of the highway's operation (1992-95), the DF ratio for each section of the corridor has been in the range of 83-95 percent. With the higher corridor traffic demand, the traffic on the new highway was much higher than the SAR's projection on all sections of the new highway. Traffic Projection 9. It is recognized that, normally, the buildup of traffic on a new highway, particularly when it operates as a toll facility, is gradual in the early years and the diversion accelerates. Notwithstanding the higher traffic growth on all sections of the  - 30 - ANNEX 1 new highway, the ICR's traffic forecast for the highway is more conservative than the SAR estimates because: (a) completion of the parallel Nanjing-Shanghai expressway in 1997 was not considered in the SAR, and (b) higher DF ratios to the expressway are expected. These factors would stagnate the traffic growth on the new Class II highway. 10. Despite an excellent traffic performance record, the long-term traffic growth rate (1994-2015) for the new highway has been estimated, conservatively, in the range of -2.6 percent and 0.3 percent. This estimate is significantly lower than that in the SAR-which assumed a uniform growth rate of about 8.6 percent for all five sections-due to the expected opening of the Nanjing-Shanghai expressway in 1997. Most of the highway corridor traffic (55-72 percent) may shift to the new expressway (para. 5). The resulting traffic projections by section are summarized as follows: TRAFFIC FORECAST COMPARISON FOR THE NEW HIGHWAY (AADT) BY SECTIONS: Section I Section 2 Section 3 Section 4 Section 5 Nanjing- Zhenjiang- Changzhou- Wuxi- Suzhou- Zhenjiang Changzhou Wuxi Suzhou Anting SAR 1994 4,665 6,669 10,197 8,555 8,822 1995 5,121 7,329 11,178 9,356 9,679 2000 8,214 11,807 17,789 14,743 15,507 2010 17,863 25,977 38,600 31,384 34,113 2015 25,958 37,950 56,082 45,218 49,919 Average growth p.a. 1994-2015 8.5% 8.6% 8.5% 8.3% 8.6% ICR 1994 10,270 16,405 18,636 16,234 17,544 1995 13,104 17,968 21,411 17,845 20,580 2000 8,301 7,404 9,670 7,127 8,735 2010 10,497 8,915 12,727 9,476 10,899 2015 11,010 9,522 13,864 10,567 11,629 Average growth p.a. 1994-2015 0.3% -2.6% -1.4% -2.0% -1.9% Note: All figures are rounded. 11. The projected traffic for the five sections of the Nanjing-Shanghai Class II highway for 1994-2015, by type of vehicles, is detailed in Table l.a of this Annex. From 1994-95, actual traffic data have been used. For subsequent years, the following growth rates have been assumed: (a) The normal traffic growth forecast of the new highway is estimated to decrease by a range of 8.7-16.8 percent between 1995-2000, due to the expected opening of the parallel Nanjing-Shanghai expressway in 1997, reflecting annual average growth rates of 2.2 to 2.9 percent during 2000-10 and a reduction to 1.0-2.2 percent by 2015; (b) The generated traffic in the ICR was assumed to be 5 percent of the normal traffic.  -31- ANNEX 1 By comparison, in the SAR, the normal traffic growth rate for the new highway was assumed to be about 9.5-10.0 percent between 1995-2000; 7.8-8.2 percent between 2000-10; and 7.6-7.9 percent between 2010-15. The generated traffic growth rate in the SAR was assumed to be 10-20 percent of the normal traffic. Economic Costs 12. Financial costs have been converted to economic costs (Table 3.a) by shadow pricing for each of the three sections of the highway as shown in Table 2.b. As a result of the higher-than-SAR estimate of the financial cost of the highway and the shadow pricing of the financial costs of the highway, the total economic cost of the project in the ICR is 29.7 percent higher than that in the SAR estimates in constant December 1996 prices. HIGHWAY ECONOMIC COST COMPARISON (Yuan million) SAR ICR ICR/SAR (Jan 1991) (Dec 1996) (Dec 1996) (in %/.) Zhenjiang-Changzhou 134.00 198.22 240.50 +21.3% Wuxi-Suzhou 130.00 192.30 319.10 +65.9% Suzhou-Anting (Shanghai) 147.00 217.44 229.20 +5.4% Total 411.00 607.96 788.80 +29.7% Economic Benefits 13. The economic analysis includes the benefits derived from (a) VOC savings on the new highway for normal and generated traffic (Table 4), (b) relieved congestion on the existing road, and (c) enhanced road safety (Tables 5.a-5.d). 14. Based on the actual traffic performance, it is estimated that about 85-95 percent of traffic from the existing arterial road will divert to the new highway. The significant reduction of traffic on the existing arterial road would diminish congestion and VOCs. In particular, reduced congestion on the existing arterial road is expected to result in a 15 percent savings of the VOC between 1993 and 1995. Thereafter, because of the gradual buildup of traffic on the existing arterial road, the savings should be reduced by 1 percent for each of the remaining five-year periods, to 11 percent by 2015. 15. In 1988, with an AADT of under 6,000, there was an average of 1.5 accidents per km per year on the existing road. After the opening of the new Class II highway for traffic, despite the much higher traffic volume (over 16,000 AADT) in 1995, the number of accidents only increased to 2.3 per km per year. In order to estimate road accident cost savings, it was assumed that the reduction in the number of accidents attributable to the  -32 - ANNEX I construction of the highway would be 2.2 accidents per km per year, at a cost of 10,000 yuan per accident. Economic Evaluation and Sensitivity Analysis 16. Total costs and benefits streams, Economic Rate of Return (ERR) and Net Present Value (NPV), for the highway are presented in Table 5.a, and for the three individual sections of the highway in Table 5.b-5.d. The overall ERR on the highway investment is estimated to be 50.4 percent, compared against the SAR estimate of 64.0 percent. Sensitivity Analyses and comparisons with the SAR results are presented in the following table. Section 2 Section 4 Section 5 Zhenjiang- Wuxi- Suzhou- Changzhou Suzhou Anting (Shanghai) Total ICR: Best estimate of rate of return 44.1% 34.6% 60.1% 50.4% NPV (12%, million Yuan) 1,254.3 791.6 1,976.8 4,423.6 20% increase in costs and best estimate of benefits 39.9% 30.7% 55.0% 42.1% NPV (12%, million Yuan) 1,217.1 743.7 1,946.4 4,140.9 20% decrease in benefits and best estimate of costs 39.0% 29.9% 53.9% 41.2% NPV (12%, million Yuan) 966.3 585.4 1,551.1 3,288.7 20% increase in costs and 20% decrease in benefits 35.2% 26.4% 49.2% 37.1% NPV (12%, million Yuan) 929.2 537.6 1,520.7 3,170.0 SAR: la Best estimate of rate of return 57.55% 53.68% 78.40% 64.04 NPV (12%, million Yuan) 411.38 372.04 754.82 1,559.24 20% increase in costs and best estimate of benefits 50.11% 46.61% 68.24% 55.72 NPV (12%, million Yuan) 420.60 351.94 723.07 1,465.60 20%/o decrease in benefits and best estimate of costs 48.55% 45.12% 66.12% 53.98 NPV (12%, million Yuan) 331.63 276.88 573.17 1,181.68 20% increase in costs and 20% decrease in benefits (%) 42.14% 39.01% 57.47% 46.86 NPV (12%, million Yuan) 310.85 256.78 550.42 1,118.05 /a: NPV = January 1, 1991 prices.  ~ 33 - ANNEX 1 PART II: THE BRIDGES AND INTERCHANGE Background 17. The project involved two bridges and one interchange construction including the following: (a) Pingwang Bridge: The new Pingwang bridge was constructed under the Phase I RNR program, together with a 3-km access road. (b) Jiuweigang Bridge: A new bridge was constructed on the west side of Nantong city, which serves westbound traffic of the city. (c) Qimen Interchange: The Qimen interchange was located to serve the most important cities, including Wuxi, Shanghai, Changshu and Suzhou. The interchange was opened to public in December 1995, and the traffic immediately reached about 34,000 AADT. This project was one of the subcomponents of Phase III under the RNR program. Traffic Projection 18. In the SAR, there is no numerical analysis on Jiuweigang bridge and Qimen interchange. For Pingwang bridge, the actual traffic for 1995 was 9,564 AADT in comparison to 6,170 AADT forecasted in the SAR. Pingwang bridge also included the construction of a 3-km access road. Despite the fast traffic growth in the southern Jiangsu corridor, a conservative approach was taken for the ICR's traffic projection (about 1-3 percent annual growth) because: (a) the overall traffic demand for the roads, bridges and interchange are expected to be in line with the highway component, which would be somewhat affected by the completion of the new expressway in 1997 (paras 9 and 10), (b) the renovation of the existing waterway bottleneck area, financed by the Bank, would encourage the low-valued break bulk cargoes to use the much cheaper inland water system (para 34); and (c) the future growth would be limited by its original design capacity. The detailed traffic performance and projection comparisons, by each component, are shown in Table l.b and summarized as follows:  ANNEX 1 TRAFFIC FORECAST COMPARISON FOR Two BRIDGES AND AN INTERCHANGE(AADT) Pingwang Jiuweigang Qirnen Bridge Bridge Interchange SAR: 1995 6,170 n.a. n.a. 2000 9,020 n.a. n.a. 2010 n.a. n.a. n.a. 2015 n.a. n.a. n.a. Average growth p.a. 1995-2000 7.9% n.a. n.a. ICR: 1995 10,520 13,254 34,767 2000 12,196 15,365 40,304 2010 14,152 17,829 46,769 2015 14,874 18,738 49,155 Average growth p.a. 1995-2015 1.75% 1.75% 1.75% Note: All figures are rounded. Economic Costs 19. All costs necessary for completion of the facilities planned under the project have been taken into account in the economic evaluation of the project. All inputs and outputs have been evaluated in constant December 1996 economic costs (Table 2.a). Financial costs have been converted to economic costs by shadow pricing, using a factor of 0.97 for Pingwang bridge and Qimen interchange, and 0.98 for Jiuweigang bridge (Table 3.b). 20. In the ICR, the overall effect of shadow priced economic costs on Pingwang bridge, Qimen interchange and Jiuweigang bridge at December 1996 prices was to increase their financial costs by 38.7 percent, 11.1 percent and 47.0 percent, respectively (Tables 2.a and 2.b). The ICR's total economic cost for Pingwang bridge is 14.0 percent higher than the SAR estimate. It is 6.1 percent lower for Jiuweigang bridge. PROJECT ECONOMIC COST COMPARISON (Yuan million) SAR ICR ICR/SAR (Jan 1991) (Dec 1996) (Dec 1996) (in %) Pingwang Bridge 22.00 33.00 37.62 +14.0% Jiuweigang Bridge 37.98 56.14 52.73 - 6.1% Qimnen interchange n.a. n.a. 55.23 n.a.  ~ 35 - ANNEX 1 Economic Benefits 21. The economic analysis primarily focused on the benefits derived from (a) VOC savings on normal traffic due to shorter distance and/or road improvement, including generated traffic; (b) relieved congestion; and (c) road safety savings. 22. The ERRs were calculated on the basis of the actual traffic performance. Better driving conditions reduce congestion and the VOC of the vehicle. Consequently, congestion on the existing roads is expected to result in a 15 percent savings of the VOC between 1993 and 1995. Thereafter, because of the gradual buildup of traffic on the two existing bridges, the savings should be reduced by 1 percent for each of the remaining five-year periods, to 11 percent by 2015. 23. For the Pingwang bridge and the Qimen interchange, there are no accident savings because records do not show any accidents on the project site either with or without the project. For the Jiuweigang bridge, in 1988 there were two accidents on the old bridges. After the opening of the new bridge to traffic, the number of accidents was reduced to one in 1995. Estimating the bridge accident cost savings, it was assumed that the reduction in the number of accidents, resulting from the construction of the new bridge, would be one accident per year at a cost of 10,000 Yuan for each accident. Economic Evaluation and Sensitivity Analysis 24. Table 6 (1-6), Table 6 (III-5) and Table 7 show the Economic Rate of Return (ERR), Net Present Value (NPV), and sensitivity calculations for each bridge and interchange. The ERR of Pingwang bridge is estimated at 39.9 percent (21 percent as estimated in the SAR). The ERRs of Jiuweigang bridge and Qimen interchange are 21.3 percent and 19.6 percent, respectively. (In the SAR, there are no estimated ERRs for those components.) Compared with the SAR, the sensitivity of ERR and NPV of the project to variations in costs and benefits are summarized as follows: Pingwang Bridge Jiuweigang Qimen Bridge Interchange SAR ICR SAR ICR SAR ICR Best estimate of rate of return 21% 39.9% n.a. 21.3% n.a. 19.6% NPV (12%, million Yuan) n.a. 116.0 n.a. 46.8 n.a. 34.9 20% increase in costs and best estimate of benefits n.a. 34.9% n.a. 18.9% n.a. 18.0% NPV (12%, million Yuan) n.a. 109.6 n.a. 38.9 n.a. 29.8 20% decrease in benefits and best estimate of costs n.a. 33.9% n.a. 18.3% n.a. 17.9% NPV (12%, million Yuan) n.a. 86.4 n.a. 29.6 n.a. 26.4 20% increase in costs and 20% decrease in benefits n.a. 29.6% n.a. 16.1% n.a. 16.4% NPV (12%, million Yuan) n.a. 79.9 n.a. 21.7 n.a. 21.3  - 36 - ANNEX 1 PART III: ROAD NETWORK REHABILITATION Background and Traffic 25. The Road Network Rehabilitation (RNR) program was implemented by three phases with a total of 18 subcomponents. All these subcomponents under the RNR program are the major local trunk routes and current traffic on those routes all reached at least over 3,000 AADT. The first phase, identified in the SAR, covered the construction of five roads and one bridge (Pingwang bridge) during 1989-94. The second phase covered the construction of four roads during 1992-94. And the third phase covers the construction of seven roads and one interchange (Qimen) during 1993-96. 26. Since all the 18 subcomponents of the RNR program are located in the same flat- rolling area, the local economic development and traffic patterns are quite similar. Based on actual traffic data, the following assumptions have been made in the economic analyses regarding future traffic growth for the most of the roads: a 3.0 percent per year traffic increase during 1995-2004, reducing to 2.0 percent thereafter. Economic Costs and Benefits 27. Costs and benefits of the RNR program have been converted to December 1996 economic costs. Financial costs have been converted to economic costs by applying shadow pricing, using a factor of 0.97 (Table 3.a). The overall effect of shadow-pricing the financial cost of the 18 subcomponents at December 1996 prices has been that the economic cost became about 20.6 percent higher than the financial costs (Tables 2.a and 2.b). 28. The benefits have been derived from (a) VOC savings (i) for normal traffic due to shorter distance and/or road condition improvement, and (ii) for generated traffic; (b) time savings on freight and passenger transport; and (c) savings in accident cost. 29. With the project, all 18 subcomponents were upgraded to Class II or Class III condition. The better pavement of the surface reduces VOC, which yielded the majority of the project benefits. Generated traffic was assumed to be 5 percent of the normal traffic. 30. The better pavement of the roads, bridges and interchange increases vehicle speed and improves the turnaround time for freight and passenger transport. The benefits to freight transport (assumed at Y 2.0/hour/vehicle) and passenger transport (assumed at Y 1.0/hour/passenger) were calculated on this basis. 31. It was estimated that the accident reduction on the improved surface would be one accident per 5 km per year at a cost saving of Y 9,000-10,000 per accident, depending on the road.  ~ 37 - ANNEX 1 Economic Evaluation and Sensitivity Analysis 32. The economic evaluation of the RNR program is presented in Tables 6 (I-1 - III- 8), indicating the stream of costs and benefits for years between 1990-2012, VOC data, and the characteristics of the roads. The ERRs, by three phases, range from 12.0 percent to 47.4 percent. The overall ERR for the RNR program is 20.8 percent. The detailed summary of the results are presented in Table 10 and are summarized as follows: ECONOMIC RATE OF RETURN ON THE RNR PROGRAM ERR NPV SAR ICR SAR ICR Phase I 42.0% 23.3% n.a. 402.2 Phase II n.a. 19.7% n.a. 217.8 Phase III n.a. 18.8% n.a. 241.5 Total n.a. 20.8% n.a. 861.5 PART IV: GRAND CANAL REHABILITATION AND SHIPLOCK Background 33. The project included one canal (at Danyang) rehabilitation and one Shiplock (at Nantong) construction, listed as follows: (a) Grand Canal at Danyang: The section of the Grand Canal at Danyang with a total length of about 17 km was upgraded to match the design capacity of the Jianbi Shiplock. (b) Nantong Shiplock: The current traffic demand greatly exceeded its original design capacity and, hence, the new Nantong shiplock was constructed to increase the capacity, up to 17 million tons annually. Traffic Projection 34. Without the project, the traffic for Danyang canal handled 2.7 million tons of cargo in 1990. With the project, the traffic of the canal increased to 4.6 million ton in 1993, the first year of opening. In 1995, the canal handled 6.1 million tons, with about 70 percent downstream traffic movement. It was estimated that 90 percent of traffic was low valued dry bulk cargo, such as coal, ores and construction materials (sand, stone and brick, etc.). Based on the current economic activities in this area, the following assumptions have been made in the economic analyses regarding the annual traffic growth: 12.5 percent increase during 1995-2000, 9 percent between 2000-05 and reduced by 1 percent every five years, to 7 percent in 2015 (Table l.c).  -38 - ANNEX 1 35. The traffic data collected at Nantong Shiplock showed a simple transport pattern in cargo movements. About 95 percent of traffic consists of coal, ores and construction materials, with about 97 percent of cargo moved from downstream to upstream. In the first year of opening (1994), the new Nantong Shiplock handled 3.9 million tons of cargo, and 7.5 million tons in 1995. The increase of capacity greatly released the pressure of the old shiplock. For example, in 1993, before the completion of the project, the old shiplock handled 9.4 million tons, whereas by 1995, cargo transport had been reduced to 8.4 million tons. To undertake economic analyses, the following assumptions have been made regarding the annual traffic growth: 7.0 percent annual average increase during 1995-2000, reduced by 2 percent every five years to 1 percent in 2015 (Table l.c). Economic Costs 36. All the project costs have been converted to December 1996 economic costs. Financial costs have been converted to economic costs by shadow pricing, using a factor of 0.98 for the Danyang canal and 0.95 for Nantong Shiplock (Table 3.b). The overall effects of shadow-pricing was to increase the economic costs of the Danyang canal and the Nantong shiplock at December 1996 prices to about 44.1 percent and 50.5 percent higher than the financial costs (Tables 2.a and 2.b). 37. In the ICR, the total economic cost for Danyang canal is 6.8 percent higher than the SAR estimate and 16.9 percent higher in the case of Nantong Shiplock. PROJECT ECONOMIC COST COMPARISON (Yuan million) SAR ICR ICR/SAR (Jan 1991) (Dec 1996) (Dec 1996) (in %) Danyang Canal 68.90 101.92 108.84 +6.8% Nantong Shiplock 52.94 78.73 91.52 +16.3% Economic Benefits 38. The economic evaluation considered two options: (a) a "do-nothing" approach against the most cost-effective solution, and (b) identification of the best alternative solution. A lack of improvements to the Danyang canal and Nantong shiplock would result in continued underutilization of the canal and worsen the existing traffic congestion of shiplocks. For the local people, the waterway has provided the cheapest means and the most cost-effective solution of transport for shipping low-valued dry bulk cargo. There is no railway line in Nantong and only one parallel railway line near Danyang canal. The design capacity of the railway is 42.2 million tons per year, and the actual traffic in 1995 was 42.9 million tons. Without the project, as the pressure of congestion on those  ~ 39 - ANNEX 1 transport hubs is worsened, the excess traffic would spill over to the much more expensive highway mode. 39. A simple queuing modeling has been employed to simulate this chain of events in order to quantify the order of magnitude of benefits involved. The benefits consist of: (a) unit transport cost savings by increasing shipment size; (b) reduced travel distances for waterborne traffic with the project; (c) elimination of the need to transport via the higher cost mode (highway); and (d) congestion savings resulting from total operating cost savings due to the fast transport time. 40. The average shipment per ship for Danyang canal has increased from 50 tons to about 70 tons. For the Nantong shiplock, the capacity with and without the project were about 90 tons and 60 tons, respectively. The unit economic waterway transport costs for various sizes of shipments and VOC used in the economic evaluation are summarized below: ECONOMIC BARGE OPERATING COST (Yuan/ton-km) 50 ton 60 ton 70 ton 90 ton Variable cost 0.404 0.340 0.276 0.201 Fixed cost 0.146 0.119 0.092 0.061 Total 0.550 0.459 0.368 0.262 Source: China, Inland Waterway Project, Report No. 13934-CHA May 26, 1995, p.120. VOC FOR MEDIUM TRUCK (Yuan/1,000 Vehicle-km) La Fuel 240 Tires 93 Maintenance 251 Crew 239 Depreciation 107 Total 930 La Paved fair flat-rolling for 3.5-ton loading capacity, 110 hp, average speed 35 km per hour and 10-year lifetime Source: China, Inland Waterway Project, Report No. 13934-CHA May 26, 1995, p.120.  -40 - ANNEX 1 41. The cost and benefit streams over time, and the resulting economic indicators for each project component, are summarized in Tables 8 and 9. 42. Avoiding Traffic Diversion From Inland Waterway to Road. In the absence of the project, when the inland waterway (IWW) traffic reaches the saturation point of full capacity utilization, any excess traffic is assumed to spill over to roads, a more costly mode of transport. With the project, congestion on the canal and shiplock traffic can be avoided, resulting in savings from avoiding use of the more expensive road traffic mode. Conservatively, it was assumed that the trigger point of switchover to roads would be when the shiplock and canal traffic exceeded 250 percent of its design capacity. It was also estimated, with the project, that only 50 percent of traffic can take advantage of larger shipments with the remainder of traffic, taking five years to obtain the full benefit of large shipments. Without the project, the traffic condition and flow will deteriorate. The congestion savings were assumed to be 5 percent of existing transport cost and were increased by 2 percent annually. Economic Evaluation and Sensitivity Analysis 43. Tables 8 and 9 show ERRs and sensitivity calculations for the canal and Shiplock. The ERR of Danyang is estimated to be 24.8 percent (19.6 percent estimated in the SAR). The ERR of Nantong Shiplock is estimated to be 20.8 percent (20.2 percent estimated in the SAR). The sensitivity of ERR and NPV in various scenarios in costs and benefits are summarized as follows: Danyang Canal Nantong Shiplock SAR ICR SAR ICR Best estimate of rate of return 19.6% 24.8% 20.2% 20.8% NPV (12%, million Yuan) 83.5 278.7 29.9 80.0 20% increase in costs and best estimate of benefits n.a. 22.3% n.a. 18.3% NPV (12%, million Yuan) n.a. 254.5 n.a. 63.7 20% decrease in benefits and best estimate of costs n.a. 21.8% n.a. 17.7% NPV (12%, million Yuan) n.a. 198.8 n.a. 47.7 20% increase in costs and 20% decrease in benefits n.a. 19.7% n.a. 15.4% NPV (12%, million Yuan) n.a. 174.6 n.a. 31.4 L/ NPV for ICR is million Yuan at December 1996 prices at 12 percent discount rate. Al NPV for SAR is million Yuan at January 1991 prices at 12 percent discount rate.  -41- ANNEX 1 PART V: THE OVERALL ECONOMIC RATE OF RETURN AND THE PROJECT RISKS Overall Economic Rate of Return 44. The overall economic rate of return on the total project (including the three subcomponents of the Nanjing-Shanghai Highway rehabilitation, 18 subcomponents of the three phases of RNR program, Danyang canal, Nantong shiplock and Jiuweigang bridge) is 38.3 percent and NPV (at 12 percent) is 5.06 billion Yuan (Table 10). (The overall economic rate return and NPV on the total project were not available in the SAR). Nanjing-Shanghai Danyang Nantong Jiuweigang Highway RNR /a Canal Shiplock Bridge Total Best estimate of rate of return (%) ICR 50.4% 21.4% 24.8% 20.8% 21.3% 38.5% SAR 64.0% n.a. 19.6% 20.2% n.a. n.a. NPV (12%, million Yuan, December 1995 prices) ICR 4,423.6 861.5 278.7 80.0 46.8 5,108.0 SAR /b 1,559.2 n.a. 83.5 29.9 n.a. n.a. /a Road Network Rehabilitation. /b NPV in SAR is million Yuan at January 1991 prices by 12 percent discount. Financial Evaluation 45. Most of the roads under the RNR as well as the Danyang Grand Canal, Nantong Shiplock and the Jiuweigang Bridge are toll free. Thus, the financial evaluation of the project was focused on the Nanjing-Shanghai Highway (the main component of the project). The highway is operated as an open toll highway with three toll stations (Daijiamen, Linjiatong and Kunshan) along the highway. The toll rate does not vary with distance traveled, only with the size of vehicle (small, medium, large and trailer). The toll levels have been increased three times since the highway was open to traffic in 1992. For the last three years (1993-95), the actual toll revenue increased by about 9.6 percent per year. Traffic on the existing Nanjing-Shanghai Highway would be gradually diverted to the parallel Nanjing-Shanghai expressway, which was opened to traffic in September 1996. So, the expected future toll revenue of the Highway will reduce. In spite of this reduction, the estimated financial rate of return (FRR) against the full costs of the highway is 11.7 percent. This result indicates that the project is likely to recover its operation cost and to generate sufficient revenue to repay the Bank loan. The toll levels are not expected to maximize the FRR, but to strike a balance between economic efficiency and FRR optimization.  -42- ANNEX 1 FINANCIAL ANALYSIS RESULTS Input Data (as of December 1996): Total cost Y 502.64 million Debt Y 202.82 million Equity Y 299.82 million Period of loan 20 years Loan interest rate (onlending rate) 5.4% Commitment fee 0.75% of balance Grace period 5 years Results % NPV (12%. Y million) Rate of return on equity 18.0% Y 131.64 million Financial rates of return: Best estimate 11.7% Y -9.86 million Toll revenue (-10%) 9.9% Y -60.76 million Operating costs (+10%) 11.5% Y -15.45 million Toll revenue (-10%) and operating costs (+10%) 9.7% Y -66.36 million Project Risks 46. Most of the components under the project show very robust economic returns. There is no particular issue that may potentially damage the project. However, despite a satisfactory overall rate of return on the total project, the ERRs for few components can be further improved, e.g., through better control of construction costs and an improved long-term road development plan of the province.  3601 Table L.a: Nanjing~Shanghal Highway Traffic Summary (AAD1) No. of Width Im) La Ian"t Gedieto (mix. in%) Lc Road clue RowS condolo A.'& speed (knedour) I II Ill IV V I-V I if ill IV V I II Ill IV V I 21 II IV V I II Ill IV IV Old rood. a 6 5 6.0 70 6.5-9.0 6.5-9.0 2 H F F F P Ill [if Ill Ill III Por Poo~ Poo" POo" Poor~ 35 35 33 35 is b t0 2.5 2.5-12.0 J.S-12.0 B.S-12.0 3.0% 3.0% 3.0%A 3.0% 3.0% (Paved) (Paved) (Paved) (Poved) (Paved) New rowd: a to0 10 12-IS 17-19 11-14 2 H F F F F I-Il 1I II Is II Good Good Good Good Good 56 52 SI 50 57 O 2-23 12 1-Ia 1-20 22-I to .0 3.0% 3.0% 3.0% 3.0% (Paved) (Paved) (Paved) (Paved) (Pored) ---.-- ---- Stuall C.----.. - ----Modiom DMo--------- --- u.6n .... -.L--oo ----2- Sa11 Trok---- --.---- Mdiao Tettk . --Ot.Tmkc-. . Tocr-i-- - ------ ----oa- Road Withoa Withoet without Without Withoot Witho Without Without leo-th (boo) peojoet/_ With Project PrcieCLe With Project project_e Welt Projet Project/ WMl Projec projooll With Projec projeell_. With Project Proje"e/. With Project projeee/ Welt Project Old N.. Ol le Old Ol oeOld Old New l l o l Old N,w Old Old New Old Old New Old Old New Old road road rood road rood road reed reed rood rood rood real road road toed rood road road rood read rood rood rood rood teal road Secton 1. Naoiog-Zhteojieg (Dootelic fioatcd) 954 876(0 57 30 1,736 1.578 138 2122 102 193 399 363 36 756 607 69 3.664 3.M3 333 1.483 1.348 135 1.137 1.034 t0) 11.297 10.270 1.027 "S9 1.l081 0.10 171 Z2929 UN0D0 209 832 756 76 1.632 1.484 140 3.268 3.516 332 2Z237 2.034 203 1.665 1.514 151 14.414 13.104 1.310 9907 1.021 835 106 1.2401 1.021 227 928 208 ISO 2.030 1.67 371 2.042 1.671 371 1.760 1,440 320 1,264 1.034 230 10.361 8.476 1.083 2000 790 502 290 96S 724 241 1.474 1. 105 369 3.101 2.336 795 1.548 1.161 387 .1134 1.375 459 1,278 958 320 11.070 8,301 2.769 2002 765 564 201 935 689 246 1. 779 1.311 460 3.903 Z.076 1.027 1,490 1,008 392 1.957 1.442 515 1.350 095 355 12.179 8.975 3.204 201 780 375 293 933 702 251 2.264 "S6 396 5.049 3.320 1.329 1.569 1.112 397 2.293 1.616 577 1.498 1.104 394 14.246 10.497 3.749 20.3 784 575 206 050 706 232 2.442 1,709 643 5.476 4.035 1.441 1.513 1.116 39 2.273 1,675 598 1.048 1.141 407 14.996 11.030 3.946 Acce. Rood 2.04 Sectior II: Zlteoji&r%-ChaoSAoo 1994 020 70.70 2.240 1.948 292 2.730 2.381 357 1.480 1.287 193 2.743 2.385 358 5.949 5.173 776 2.590 2.252 350 1.126 979 147 18.866 26.40S 2.461 :"95 3.188 2.772 416 3.097 3.389 308 2.650 1.442 216 2.582 2.245 337 5.206 4.527 679 2.483 2.159 524 1.649 1.4354 215 20.663 27.968 2.695 1997 2.441 1.0311 610 2.9085 2.239 746 072 729 243 1,269 032 317 2.380 1.791 597 1.243 952 '311 2.307 900 327 122.05 9,494 3.151 2600 2.475 1.650 025 2.020 2.029 1.009 708 532 264 920 607 203 1,621 2,085 543 9083 602 302 2,363 9609 454 22.205 7.404 3.701 r. 2602 2. 622 2.707 023 3,200 2.089 2.229 783 522 274 057 550 299 2.368 90 526 054 356 291 2,458 949, 509 22.2912 7.552 3.040 2010 3.507 2.284 1.223 4.291 2.794 2.497 054 356 298 22 336 287 2,381 099 482 030 540 290 2.006 1,306 700 23.692 8.023 4.777 2023 3.844 2.083 2.342 4.704 3.063 2.642 077 572 306 022 329 293 2.344 073 469 823 536 207 2.220 2.445 774 14.623 9.522 5.202 Armt Read 0.00 Section Ill: ChegzitooWooe (DomoteLi finanred) 1994 46.99 4560 2.032 2.01 253 2.62 3.296 265 1.022 973 49 2.823 2.732 07 6.290 5.998 300 3.233 3.079 154 906 03 4 959 2.3 5 "S9 3.024 2.70 20 .60 35.507 175 2.254 2.059 55 2.864 2.328 236 7.009 7.532 377 2.708 2.379 229 1.252 2.096 55 22.482 22.412 2.871 1997 2.39 2,305 294 2,070 1692 Ise 630 567 63 2,365 2.128 237 4,000 4.420 490 2.070 983 207 723 652 72 23.206 11.79S 2.312 2060 2.2421 978 263 1,393 1.194 299 493 424 72 2.099 2.27 303 4.289 3.676 613 644 552 52 642 549 92 22.293 0.670 1.623 2002 1.102 935 267 2.35 I1241 204 489 415 74 3.083 2.626 467 4.428 3.757 671 572 485 87 665 564 202 12,684 9.913 1.771 2929 1.165 906 277 14,22 2.206 225 547 464 03 5.016 4.236 760 5,517 4.681 036 496 422 73 028 711 227 25.000 22.727 2.233 20131 2.186 1.066 3so 1.446 1.227 230 567 4811 96 5.0354 4.967 997 3,932 5.026 856 474 402 72 902 765 137 30.341 13,064 Z.477 Arret Rood 0.99 Section IV; Wooi.Seejto 2994 600.0 51.29 6.248 5.346 062 7.515 6.535 900 403 350 53 2,032 007 233 3.034 2.630 356 324 292 42 224 1206 29 18.670 16.254 2.436 299 6.220 3,400 020 7.590 6.660 990 493 429 64 2.042 005 236 3.432 2.984 448 667 500 07 2.0019 947 142 20.522 27.845 2.677 1997 3.2353 2.440 023 2.976 2.9132 994 291 222 70 345 400 236 1.065 1.424 472 822 283 1229 2.07 1.409 470 22.330 9.248 3.882 2060 2. 443 2.630 023 Z907 2.992 996 229 246 73 409 373 236 1.448 %65 483 460 287 153 2.722 1.813 907 10.690, 7.127 3.563 2002 2.337 1.32322 3si 2836 2.060 990 223 239 74 392 235 237 2.390 909 407 474 309 265 3.423 2.229 1.204 12.092 7.22 5.06 2020 2.342 12,32 027 2.062 1.063 99 222 244 77 392 235 237 2.4291 930 498 063 370 296 6.740 4.389 2.351 14.552 9,476 5.076 2023 2.342 2.25 017 2.063 2.8164 999 224 246 78 392 235 237 2,430 937 502 602 391 229 81,365 5.449 2.020 16.229 20,367 5.662 Arcm Road 0 00 Sectio. V: Sozhcto-MAnttg (Sbaethai) :994 299.00 34.60 4,092 3.410 082 3.608 4,267 833 0812 735 247 Z.244 2,070 374 6.569 5,424 2.003 596 330 66 .930 2,6000 322 22.033 27,544 3.309 1003 4.328 4.033 003 3.900 4.927 083 2.040 067 273 2.559 2,226 443 7,602 6.401 12.20 347 289 50 2.240 2.86 373 24.595 20.400 4,22 "97 3,207 2.232 936 3.797 2.620 1.161 669 463 2906 1,729 1. I" $529 4.944 2.423 2,322 265 114 52 2,427 962 436 25.820 20.9321 4.81671 2009 2.870 2.722 1.140 3.300 2.105 1.403 028 372 247 2.597 958 639 4.560 2.742 2.827 Ill 671 44 1.285 772 524 24.537 0.735 5.02 2602 3.003 1.732 12.21 3.6l 2.142 2.330 647 377 270 2.675 977 608 4.782 2.709 2.092 202 59 42 1.333 778 555 25.212 01.8174 0,338 2929 ~~~~~~~3,700 2.230 1.942 4.524 2.639 2.885 797 465 332 2.076 2.212 063 3.893 3,438 2.433 86 so 3-6 2,608 036 670 28.00 28.899 7.785 129100 2.95 2.3 6 35 2,646 4.32.1 2.82 2.013 850 496 354 2.221 2.296 92 6,293 3.672 2.622 82 48 34 2.066 995 72 29.294 21.629 7.60 .Uces, Road Tota Id N6U6ie8Shtotota Illehway : Ar 573.00 279.40 B; 375.00 292.44 1a to Real pavemtett; b. Wilth toa bed. l-b Only the 060 section of the new roald(Nanjiog-Zltojimig) it 2/4 Ieee Le: F:; PF; H: Hilly. M: Mooodtloaooo Ld & WholtOtth. accress t r B : With the acoess reads. /Le: Wibhout lIw expteeswety IsfBc.  SBB Table l.b: Highway Bridges And Interchange Traffic Summary (AADI) 540 (m)_I NM O1h ( its Rodd Le Cou Ag d( a n m u m Hi l1 u WidPAtheprojed a / $ C. 4. 122 2 2 2 I V F I Pw PMu Fo 3S 35 t b Le 30 35 1.0 5Ott 3Mt SOOt 0a-04) (Paed) (PWd) With he project a La II II-it 210 2 2 2 N F F U 1.11 it Ooad Good Goad 56 52 0 b is 12.e 12-23 15 0 3.0il 3 3.ilt (Paved) (Paved) (Pwod) -Small Cr- -Medium Bus- -Lae Bus- -Small Tick- -Mediun Tmuck- -La Tciuk- -Traor-Tiler- - TTota ToWl Withot Without Witou With Witut Witho Without Withut lath Oan) project With Project proect Witi Ploject project With Project prect With Ptoject project Widi Project project With Projec pojec With Prjec projec With Proje O Ne O Ne O Old New Old Old New Old Old New Old Old New old Old New Old Old Naw Old Old New Old L Phtgw^aBndge 1990 0.34 0.34 629 - - 943 - - 440 - - 651 - - S9S - - 514 - - 153 - - 4.228 - - 1994 1.654 1,654 - 2.480 2.480 - 636 636 - 1.227 1,227 - 2.068 2068 - 1,245 1,245 , 254 254 - 9.564 9.564 - 1995 1.,19 1.819 - 2.728 2.728 - 700 700 - 1.349 1,349 - 2.275 2.275 - 1,370 1.370 - 279 279 - 10,520 10.520 - 2000 2.109 2.109 - 3,163 3,163 - 812 312 - 1,564 1.564 - 2637 2.637 - 1.538 1.538 _ 323 323 - 12196 12.196 - 2005 2.321 2.328 - 3.492 3.492 - 896 896 - 1.727 1.727 - 2.911 2.911 - 1,753 1.753 - 358 358 - 13.465 13.465 - 2010 2447 2.447 - 3,670 3.670 - 942 942 - 1.815 1.815 - 3.060 3.060 - 1,342 1.342 - 376 376 - 14.152 14.152 - 2015 2572 2.572 - 3.857 3,857 - 990 990 - 1,903 1,908 - 3.216 3,216 - 1.936 1,936 - 395 395 - 14.874 14.874 - AeCeaOa 3.54 3.54 11. hiweigBng8ridge 199 0.44 044 731 - - 1096 - - 1,167 - - 1,231 - - 2,085 -- - 202 - - 127 - - 6.645 - - 1994 1.513 1.513 - 2.270 2270 - 1,113 1,113 - 1.541 1.541 - 1,946 1,946 - 233 233 - 83 83 - 8.699 8,699 - 1995 1.858 1,853 - n787 2737 - 1.651 1,651 - 2.636 2636 - 3.368 3,368 - 852 852 - 102 102 - 13,254 13,254 - 2000 X.154 2154 - 3.231 3,231 - 1,914 1,914 - 3,056 3,056 - 3,904 3,904 - 938 983 - 11 118 - 15.365 15,365 - 2005 2378 2.378 - 3,567 3,567 - 2,113 2X113 - 3,374 3,374 - 4,310 4,310 - 1.091 1.091 - 131 131 - 16.964 16,964 - 2010 2.499 2.499 - 3.749 3,749 - 2.221 2.221 - 3.546 3,546 - 4.530 4,530 - 1,147 1.147 - 137 137 - 17.829 17,829 - 2015 X626 2.626 - 3,940 3.940 - 2.334 2X334 - 3,727 3,727 - 4,761 4,761 - 1,205 1.205 - 145 145 - 13,738 18.738 - Aceslad 1.90 1.90 mI. Qinim Intadbw 1995 0.90 0.90 14,075 14,075 - 7,531 7,581 - 2030 2.030 - 3,162 3,162 - 5,963 5,963 - 1,224 1,224 - 732 732 - 34,767 34.767 - 2000 16,317 16,317 - 3.788 8.788 - 2.353 2X353 - 3666 3,666 - 6,913 6,913 - 1,419 1,419 - 84S 848 - 40304 40,304 - 2005 18,015 13.015 - 9,703 9,703 - 2.598 2.59 4,048 4,048 - 7,633 7,633 - 1.567 1,567 - 935 935 - 44.499 44.499 - 2010 13,934 18,934 - 10,198 10,198 - 2.731 2X731 - 4,254 4,254 - 3.022 8,022 - 1,647 1,647 - 983 983 - 46.769 46,769 - .2015 19,900 19,900 - 10.718 10.718 - 2,870 2.870 - 4.471 4,471 - 3,431 8.431 - 1,731 1,731 - 1.034 1,034 - 49,155 49,155 - AmD 0oA 0.00 0.0 La: a: Road pnvmet; Lb: 1. PirwgBridp /Le: F: Flat; b: Withroadbed. 11. iwe _Bridge H: Hill. HI. QiO_m i btr h: Mecastadnous  - 45- snww ANNEX 1 Table l.c: Shiplock and Canal Traffic Performance (1980-1995) and Forecast (2000-2015) ('000 ton) AcUl Forcct 19S0 1985 1990 1993 1994 1995 2000 2005 2010 2015 A Nmntwg Old Shiplocc coal Up m 111.7 247.5 215.1 370.9 311.5 277.6 279.5 279.5 279.5 279.5 Downm 21.5 - - - - - Totl 133.2 247.5 215.1 370.9 311.5 277.6 279.5 279.5 279.5 279.5 Co ion Up_stm 670.4 1,155.0 1,161A 899.4 1,424.1 1,430.2 1,440.2 1,440.2 1,440.2 1.440.2 Downtrm 129.1 112.5 47.8 15.1 15.2 5.1 5.1 5.1 5.1 5.1 Total 799.5 1,267.5 1,209.2 914.5 1,439.3 1,435.3 1,445.3 1,445.3 1,445.3 1,445.3 Normetallic orcs Up m 4,413.2 6,187.5 6,583.4 7,195.0 6,942.5 6,486.6 6,531.8 6,531.8 6,531.8 6,531.8 Down m 774.2 150.0 120.1 3S.5 11.3 3.7 3.7 3.7 3.7 3.7 Total 5,188.0 6,337.5 6,703.5 7,233.5 6,953.2 6,490.3 6,535.5 6,535.5 6,535.5 6,535.5 Ode= Up stream 391.0 660.0 622.3 206.6 222.5 218.7 220.2 220.2 220.2 220.2 Down sem 150.7 427.5 221.5 83.9 42.2 19.4 19.5 19.5 19.5 19.5 Total 541.7 1,147.5 909.2 290.5 265.3 232.1 239.7 239.7 239.7 239.7 Total Up ,526.3 8,250.0 8,64.2 9,271.9 ,900.6 8,413.1 2,471.7 8,471.7 2,471.7 2,471.7 Down gream 1,076.1 750.0 389.4 137.5 69.3 22.2 28.3 22.3 22.3 22.3 Total 6,662.4 9,000.0 9,037.6 9,409.4 8,969.9 2,441.3 2,500.0 2,500.0 8,500.0 2,500.0 B. NuitgNcw Shiplock Coal Up atem rna. n.a. nML. n.. 135.0 414.1 520.8 741.3 859.4 903.2 Down stem nTM.. ILL. n.I. nIL. - - - Total - - . 135.0 414.1 580.2 741.3 259.4 903.2 Cmuctionmials Upm n.m.. nII. n.. nII. 617.1 1,017.2 1,426.7 1,220.9 2,110.9 2,21.6 Downsm ma.. Ia. n.a. I.. 7.5 - - ' Total - - - - 624.6 1,017.2 1,426.7 1,S20.9 2,110.9 2,212.6 Nonmeallic orts Up e nm.. nM.. n... ILL. 3,002.1 5,262.1 8,221.9 10,493.5 12,164.2 12,725.3 Downa n.. IM. n .. n.m. 5.5 - - - - Total - - - - 3,013.6 5,262.1 8,221.9 10,493.5 12,164.2 12,725.3 Up aem nmL. n.I. n.m. ILL. 96.3 241.1 332.2 431.6 500.3 525.2 Down sILLn.m.. ILn.m. n.. n.m. 21.0 - -- - Total - - - 117.3 241.1 332.2 431.6 500.3 525.8 Total Up m - - -- 3,856.5 7,534.5 10,567.6 13,487.3 15,635.4 16,432.9 Down streum - - - - 34.0 - - - Total - - - 3,290.5 7,534.5 10,567.6 13,427.3 15,635.4 16,432.9 Cont'ed  - 46- 91WW ANNEX 1 Table 1.c: Shiplock and Canal Traffic Performance (1980-1995) and Forecast (2000-2015) ('000 ton) Acl Forecast 1980 1985 1990 1993 1994 1995 2000 2005 2010 2015 C. TotlNtong Shiplocks Coal Upsm 111.7 247.5 215.1 370.9 446.5 691.7 860.3 1,020.8 1,138.9 1,18217 Downsuam 21.5 - - - - - - - - Total 133.2 247.5 215.1 370.9 446.5 691.7 860.3 1,020.8 1,138.9 1,182.7 Constuctionmatena] tJ stem 670.4 1,155.0 1,161.4 899.4 2,041.2 2,447.4 2,866.9 3,261.1 3,551.1 3,658.8 Downsm 129.1 112.5 47.8 15.1 22.7 5.1 5.1 5.1 5.1 5.1 Total 799.5 1,267.5 1.209.2 914.5 2,063.9 2.452.5 2,872.0 3,266.2 3,556.2 3.663.9 Nonmelic ores upstem 4,413.2 6,187.5 6,583.4 7,195.0 9,950.6 12,348.7 14,753.7 17,025.3 18,696.6 19,317.1 Donm 774.8 150.0 120.1 38.5 16.8 3.7 3.7 3.7 3.7 3.7 Total 5,188.0 6,337.5 6.703.5 7,233.5 9.967.4 12,352.4 14,757.4 17,029.0 18,700.3 19,320.S Upstm 391.0 660.0 6s8.3 806.6 318.8 459.8 558.4 651.8 720.5 746.0 Down 150.7 487.5 221.5 83.9 63.S 19.4 19.5 19.5 19.5 19.5 Toa 541.7 1,147.5 909.8 890.5 382.6 479.2 577.9 671.3 740.0 765.5 Total Up de 5,586.3 8,250.0 8,641.2 9,271.9 12,757.1 15,947.6 19,039.3 21,959.0 24,107.1 24,904.6 Down 1,076.1 750.0 389.4 137.5 103.3 28.2 28.3 28.3 28.3 28.3 Total 6,662.4 9,000.0 9.037.6 9,409.4 12,860.4 15,975.8 19,067.6 21,987.3 24,135.4 24,932.9 D. DsnWg C,alRimbilitstion Ups - - 1,216.9 2,063.2 1,492.6 1,22.6 3,277.6 5,043.0 7,409.8 10,392.6 Downse - 1,493.6 2,577.4 3,516.7 4,294.3 7,722.4 11,881.9 17,458A 24,486.3 Total - - 2,710.5 4,640.6 5,009.3 6,116.9 11,000.0 16,924.9 24,868.2 34,S8.9  - 47- 211 ANNEX 1 Table 2.a: Economic Cost Summary (December 1996 prices, Yuan million) 1933 19S9 1990 1991 1992 1993 1994 1995 1996 Total L Economic A. Nanjing-Shaaghai Clam l Highway I1 29.49 75.31 U1.S4 42.16 0.00 0.31 1.61 0.12 1.12 240.50 Wwu-Suzhou 39.25 37.27 97.53 91.05 0.00 0.31 1.63 0.32 1.12 319.10 Suzho-Aning (Shanghi) 25.19 45.19 63.69 36.14 0.00 0.33 1.67 0.32 1.12 229.20 Sublotal 93.93 207.77 255.06 220.05 0.00 1.14 5.03 2.46 3.36 733.30 B. Road Network Rebhabaiao Phase 1: 1. ChangzouTsnwang 0.00 22.50 49.39 61.73 43.79 27.29 0.00 0.00 0.00 209.70 2. Chanb_u-Su7k 0.00 0.00 0.00 0.00 25.32 37.00 0.00 0.00 0.00 62.32 3. PingwaWanWinWing 0.00 0.00 21.47 15.61 12.76 0.00 0.00 0.00 0.00 49.34 4. Xiaohb-Huanu 0.00 0.00 0.00 0.00 29.91 39.33 24.02 0.00 0.00 93.31 S. Huta-aoqiao 0.00 0.00 0.00 12.23 50.03 0.00 0.00 0.00 0.00 62.31 6. Pinswangsidge 0.00 0.00 0.00 15.71 21.91 0.00 0.00 0.00 0.00 37.62 Subtotal 0.00 22.50 70.36 105.23 133.77 104.17 24.02 0.00 0.00 515.60 Phase 2: 1. Gdong-Gu1i 0.00 0.00 0.00 0.00 73.03 93.33 56.91 0.00 0.00 223.32 2. Yanxian-Wuxi 0.00 0.00 0.00 0.00 66.79 61.67 55.95 0.00 0.00 14.41 3. Huangtu-Xiagang 0.00 0.00 0.00 0.00 12.37 23.31 15.12 0.00 0.00 50.S0 4. T_Langsi-glai 0.00 0.00 0.00 0.00 0.00 76.31 15.60 0.00 0.00 91.91 Subtotal 0.00 0.00 0.00 0.00 152.19 259.67 143.51 0.00 0.00 555.44 Phase 3:1. Da*v-biya=g 0.00 0.00 0.00 0.00 0.00 53.95 36.70 93.00 0.00 233.65 2. Zheuing-Xiaohe 0.00 0.00 0.00 0.00 0.00 36.91 54.51 30.63 0.00 122.10 3. Yunting.Yaluji 0.00 0.00 0.00 0.00 0.00 17.02 31.37 23.79 0.00 127.18 4. Iumuun.Chophu 0.00 0.00 0.00 0.00 0.00 16.05 72.05 31.13 0.00 119.23 5. Qimnenlntewha 0.00 0.00 0.00 0.00 0.00 0.00 35.78 19.45 0.00 55.23 6. Gecun-Dawyang 0.00 0.00 0.00 0.00 0.00 0.00 3.63 44.12 13.71 72.23 7. Qishuyan-Yuecheng 0.00 0.00 0.00 0.00 0.00 0.00 13.61 42.47 21.15 77.23 S. Kunshan-Taicang 0.00 0.00 0.00 0.00 0.00 0.00 4.42 30.40 16.74 51.56 Subtotal 0.00 0.00 0.00 0.00 0.00 123.93 357.07 320.74 56.67 S58.41 Totl Road Nctwok 0.00 22.50 70.36 105.23 340.96 437.77 524.67 320.74 56.67 1929.45 - -~~~~ - - -- --- C. DayangCanalRehabit 0.00 0.00 27.30 56.47 25.07 0.00 0.00 0.00 0.00 103.34 D. Nantong Shi Lock 0.00 7.37 11.73 19.10 16.45 36.37 0.00 0.00 0.00 91.52 E. JuweiangBtpidge 0.00 6.52 10.56 21.14 14.51 0.00 0.00 0.00 0.00 52.73 Grand Total 93.93 244.16 375.51 422.04 396.99 525.73 529.70 323.20 60.03 2971.34 Notes: /-1: lnluding others (tech. ais. and ta). /2. All Fiure rounded.  - 48- ANNEX 1 Table 2.b: Financial Cost Summary (Current prices, Yuan million) 1913 1939 1990 1991 1992 1993 1994 1995 1996 Tobl IL Fin=a (Cuxat): A Nwjqhuagh CUaM H Hihway Thsmiuw.CliaapJiou 14.47 45.38 61.92 31.11 0.00 0.00 0.00 0.00 0.00 152.3S WVux; &uilou19.26 49.43 67.98 66.10 0.00 0.00 0.00 0.00 0.00 202.32 Suz%-Anft (Sh-aha) 12.27 23.66 46.02 59.99 0.00 0.00 0.00 0.00 0.00 146.94 Sub%otal 46.00 123.52 175.92 157.20 0.00 0.00 0.00 0.00 0.00 502.64 B. Road NekRobababalion Phwe 1: 1. Chaw r _oo-irnwaag 0.00 12.00 32.53 44.72 37.25 22.32 0.00 0.00 0.00 14S.37 2. ChwhuSo 0.00 0.00 0.00 0.00 13.03 30.26 0.00 0.00 0.00 41.29 3. P i-Wa _w6ng 0.00 0.00 13.79 11.31 9.74 0.00 0.00 0.00 0.00 34.34 4. Xlo-Huig 0.00 0.00 0.00 0.00 21.09 32.62 21.37 0.00 0.00 75.03 5. HW6Caqi&o 0.00 0.00 0.00 7.67 33.23 0.00 0.00 0.00 0.00 45.90 6. Prwug Bridgp 0.00 0.00 0.00 10.51 16.61 0.00 0.00 0.00 0.00 27.12 SubWOtA 0.00 12.00 46.37 74.21 140.95 35.20 21.37 0.00 0.00 330.10 Ph= 2: 1. Oeg-u 0.00 0.00 0.00 0.00 51.14 80.46 50.64 0.00 0.00 1S2.24 2. YanuWWud 0.00 0.00 0.00 0.00 47.62 50.43 49.73 0.00 0.00 147.93 3. Humghi-Xng 0.00 0.00 0.00 0.00 8.43 19.06 13.45 0.00 0.00 40.94 4. awumWi-Iahi 0.00 0.00 0.00 0.00 0.00 61.19 13.33 0.00 0.00 75.07 Soal 0.00 0.00 0.00 0.00 107.19 211.14 127.75 0.00 0.00 446.08 Ph. 3: 1. Dayang-Iiy4g 0.00 0.00 0.00 0.00 0.00 39.00 76.95 90.32 0.00 206.27 2. Zwjwg-Xaobe 0.00 0.00 0.00 0.00 0.00 23.44 43.50 29.30 0.00 106.74 3. Yuidng-Ya*j 0.00 0.00 0.00 0.00 0.00 12.30 71.63 27.96 0.00 111.94 4. L 1yuan-hmhu 0.00 0.00 0.00 0.00 0.00 11.60 63.26 30.23 0.00 105.09 5. Qiea lnterchnge 0.00 0.00 0.00 0.00 0.00 0.00 30.33 13.39 0.00 49.72 6 Gec4u-Dayang 0.00 0.00 0.00 0.00 0.00 0.00 7.10 43.30 19.46 69.86 7. QibaYuecheng 0.00 0.00 0.00 0.00 0.00 0.00 11.20 41.14 21.91 74.25 S. Kunahan-Tcag 0.00 0.00 0.00 0.00 0.00 0.00 3.64 29.41 17.34 50.39 Subtoal 0.00 0.00 0.00 0.00 0.00 91.34 313.16 311.05 53.71 774.26 Tol RoladNetwmk 0.00 12.00 46.37 74.21 243.14 3S7.6S 462.23 311.05 53.71 1600.44 C. Danyang Cul R deblati 0.00 0.00 16.48 40.24 13.33 0.00 0.00 0.00 0.00 75.55 D. Nanto Slip LAk 0.00 4.00 6.77 12.79 12.79 24.45 0.00 0.00 0.00 60.30 E. lhI_WeBridp 0.00 3.44 6.34 15.14 10.95 0.00 0.00 0.00 0.00 35.37 P. Odmni 0.00 0.00 0.00 0.00 0.00 1.02 4.66 2.38 3.36 11.42 Urmd Tola 46.00 142.96 251.38 299.58 290.71 413.15 466.94 313.43 62.07 2236.72 Note: /_1: Al FIge an nde&  2M Table 3.a: Shadow Price Calculation (December 1996 prices, Million Yun) ZIienjiang.ChangwJiou Wwx-Suzhou zh-Anting (S angai) Road Netwok RIhabiltati Conver -sian - Finncial- Eono- Financial- Econo- Financial- Econo- Financial- Econo- fitor Local Foreign Tota mic Loca Forign Tota mic Loc Foreign Totl mic Loca Forip Tota nMc land 1.00 22.05 0.00 22.05 22.05 36.18 0.00 36.18 36.18 21.14 0.00 21.14 21.14 143.98 0.00 143.98 143.98 Labw. lnkilled 1.00 0.12 0.72 1.44 1.44 0.98 0.95 1.93 1.93 0.76 0.75 1.51 1.51 5.85 5.82 11.67 11.61 Semi akleddTechnician 0.67 5.09 5.09 10.18 S.50 6.83 6.83 13.66 11.41 3.81 3.82 7.63 6.37 41.36 41.20 82.56 68.91 Supyvior 2.00 1.27 1.59 2.86 4.13 1.91 2.31 4.22 6.13 1.71 2.00 3.71 5.42 11.78 15.42 27.20 38.98 Matarials Steel 1.00 5.08 5.08 10.16 10.16 8.42 8.42 16.84 16.84 5.56 5.57 11.13 11.13 81.67 81.78 163.45 163.45 Timber 1.00 1.80 1.79 3.59 3.59 0.28 2.76 3.04 3.04 2.54 2.54 5.08 5.08 10.56 10.51 21.07 21.07 Cement 1.00 9.44 9.45 18.89 18.89 6.13 6.11 12.24 12.24 13.90 13.92 27.82 27.82 143.02 143.16 286.18 286.18 Sand 0.80 5.31 5.31 10.62 9.56 4.91 4.92 9.83 8.85 4.68 4.68 9.36 8.42 48.17 48.14 96.31 86.68 Stone 0.80 5.31 5.31 10.62 9.56 4.91 4.92 9.83 8.85 4.68 4.68 9.36 8.42 48.17 48.14 96.31 86.68 Bitunn 1.00 5.96 5.98 11.94 11.94 9.54 9.54 19.08 19.08 0.57 0.57 1.14 1.14 27.84 27.68 55.52 55.52 Oth 0.80 4.86 4.85 9.71 8.74 5.38 5.90 11.78 10.60 3.14 3.15 6.29 5.66 58.20 58.02 116.22 104.58 Fud: Diel 1.00 3.62 3.64 7.26 7.26 4.65 4.64 9.29 9.29 3.40 3.41 6.S1 6.81 37.00 36.93 73.93 73.93 (aolino 1.00 0.06 0.06 0.12 0.12 0.06 0.06 0.12 0.12 0.04 0.04 0.08 0.08 0.44 0.49 0.93 0.93 Hay oil 1.00 0.01 0.02 0.03 0.03 0.02 0.02 0.04 0.04 0.01 0.02 0.03 0.03 0.17 0.18 0.35 0.35 Otdo 1.00 0.01 0.02 0.03 0.03 0.02 0.02 0.04 0.04 0.01 0.02 0.03 0.03 0.17 0.18 0.35 0.35 Water 0.80 0.08 0.08 0.16 0.14 0.06 0.08 0.14 0.13 0.06 0.07 0.13 0.12 1.13 1.12 2.25 2.02 ElectricitY 1.50 0.71 0.71 1.42 1.78 0.9S 0.95 1.90 2.38 0.65 0.63 1.28 1.61 6.89 6.80 13.69 17.14 Cautic 1.00 0.55 0.55 1.10 1.10 0.25 0.22 0.47 0.47 0.17 0.18 0.35 0.35 13.35 13.38 26.73 26.73 Mech.ibl equipnsot 1.00 4.77 13.37 18.14 18.14 9.73 20.17 29.90 29.90 6.32 6.32 12.64 12.64 66.40 66.22 132.62 132.62 0th.. 0.80 12.56 0.00 12.56 10.05 22.29 0.00 22.29 17.83 13.41 8.01 21.42 18.74 126.44 95.56 222.00 196.71 Total 89.26 63.62 152.88 147.21 124.00 78.82 202.82 195.35 86.56 60.38 146.94 142.52 872.59 700.73 1573.32 1518.48 Overall c.nwalim ko 0.96 0.96 0.97 0.97 -I_:AlIth6lldAf,pxreeouaded. /_2: U..hw dsnmte - 1.0.  2M Table 3.b: Shadow Price Calculation (December 1996 prices, Million Yuan) Danang Canal Rehabildtton Naton Ship Lock haweigeng Bridge Pinwag Bridge Conver -$ion Financial- Bcono- - Financial- Econo -F Fincial Econo. Financial- Econo- Total cetor Local Freign Total midc Local Foeigrn Total mic Local Facign Total mi Local Foreign Total mric Prject Land 1.00 9.35 0.00 9.35 9.35 6.43 0.00 6.43 6.43 5.85 0.00 5.85 5.85 2.55 0.00 2.55 2.55 tUnislled 1.00 5.62 5.61 11.23 11.23 3.13 3.12 6.25 6.25 0.76 0.75 1.51 1.51 0.61 0.61 1.22 1.22 SwaiskledtTechniciAn 0.67 4.31 4.32 8.63 7.21 2.78 2.78 5.56 4.64 1.52 1.52 3.04 2.54 0.37 0.37 0.74 0.62 9uevi 2.00 1.00 1.18 2.18 3.18 0.44 0.73 1.17 1.61 0.64 0.71 1.35 1.99 0.24 0.30 0.54 0.78 Steel 1.00 0.16 0.16 0.32 0.32 1.37 1.37 2.74 274 1.23 1.23 2.46 2.46 0.95 0.95 1.90 1.90 Tinber 1.00 0.50 0.51 1.01 1.01 0.69 0.69 1.38 1.38 0.21 0.21 0.42 0.42 0.14 0.14 0.28 0.28 1 Cemnt 1.00 2.74 2.72 5.46 5.46 2.67 2.68 5.35 5.35 1.48 1.48 2.96 2.96 2.79 2.79 5.58 5.58 u S9 San 0.80 0.96 0.95 1.91 1.72 2.20 2.20 4.40 3.96 0.77 0.78 1.55 1.40 0.70 0.69 1.39 1.25 stais 0.80 0.96 0.95 1.91 1.12 2.20 2.20 4.40 3.96 0.77 0.78 1.55 1.40 0.70 0.69 1.39 1.25 Biuiaman 1.00 0.00 0.00 0.00 0.00 0.05 0.05 0.10 0.10 0.57 0.57 1.14 1.14 0.15 0.15 0.30 0.30 Othu 0.80 3.52 3.53 7.05 6.35 0.13 0.13 0.26 0.23 1.86 1.87 3.73 3.36 0.54 0.54 1.08 0.97 Ful: Diel 1.00 0.02 0.02 0.04 0.04 0.41 0.41 0.82 0.82 0.16 0.16 0.32 0.32 0.17 0.17 0.34 0.34 aoline 1.00 0.00 0.00 0.00 0.00 0.03 0.03 0.06 0.06 0.31 0.31 0.62 0.62 0.02 0.02 0.04 0.04 Hey oil 1.00 0.00 0.00 0.00 0.00 0.02 0.02 0.04 0.04 0.01 0.01 0.02 0.02 0.00 0.00 0.00 0.00 Od 1.00 0.00 0.00 0.00 0.00 0.02 0.02 0.04 0.04 0.01 0.01 0.02 0.02 0.00 0.00 0.00 0.00 Wator 0.80 0.06 0.06 0.12 0.11 0.11 0.10 0.21 0.19 0.10 0.10 0.20 0.18 0.01 0.00 0.01 0.01 Elecy 1.50 1.51 1.51 3.02 3.78 0.81 0.81 1.62 2.03 0.20 0.20 0.40 0.50 0.09 0.09 0.18 0.23 ConInuction 1.00 2.01 2.01 4.02 4.02 0.46 0.46 0.92 0.92 0.38 0.38 0.76 0.76 0.35 0.35 0.70 0.70 Modcanical equipant 1.00 4.49 4.49 8.98 8.98 2.99 2.99 5.98 5.98 2.04 2.04 4.08 4.08 1.69 1.69 3.38 3.38 Ot0r 0.80 3.57 6.75 10.32 9.61 10.73 2.34 13.07 10.92 2.03 1.86 3.89 3.48 2.73 2.77 5.50 4.95 Total 40.78 34.77 75.55 74.09 37.67 23.13 60.80 57.65 20.90 14.97 35.87 35.01 14.80 12.32 27.12 26.35 Overall conversionhftor 0.98 0.95 0.98 0.97 0.97 /-1: All the fipgu ae rounded. / 2: Shadow exhange rate - I .0.  voc -51 - ANNEX 1 Table 4: Economic Vehicle Operating Costs (Yuan per km, December 1996 prices) ----------C;_ Fair Poor FW3" R ESI MomL FtM Rd ERE Mc4ouL llat Rd HMt Mo_. A. Hihwmay (Paved) Smill car 0.626 0.654 0.675 0.725 0.753 0.774 0.938 0.966 0.987 Small bus 1.094 1.298 1.465 1.356 1.575 1.754 1.735 1.934 2.113 Medium bus 1.724 2.002 2.243 2.194 2.513 2.772 2.892 3.171 3.430 Largp bus 1.924 2.346 2.721 2.554 3.076 3.505 3.095 3.598 4.027 S ltizik 0.785 0.981 1.128 0.875 1.069 1.215 1.069 1.239 1.409 Medituntruc 0.850 1.048 1.246 0.930 1.143 1.337 1.124 1.337 1.550 I.arget&d 1.079 1.322 1.565 1.219 1.481 1.712 1.450 1.712 1.959 Tranctr/baikr 2.192 2.891 3.496 2.499 3.253 3.888 2.975 3.689 4.344 B. Highway (paved) Snaln ca 0.846 0.880 0.901 1.144 1.180 1.194 1.563 1.591 1.605 Smailbus 1.520 1.780 1.947 1.994 2.253 2.413 2.513 2.732 2.892 Medium bus 2.540 2.892 3.133 3351 3.710 3.949 4.268 4.567 4.806 IArge bus 2.518 3.018 3.362 3.505 4.064 4.474 4.251 4.773 5.183 Small buck 1.030 1.251 1.423 1.191 1.410 1.580 1.458 1.677 1.847 Mediumtnuk 1.087 1.344 2.036 1.240 1.492 2.267 1.512 1.764 2.675 Ipargetuck 1.368 1.733 2.227 1.535 1.913 2.453 1.797 2.175 2.777 Tractortrailer 2.362 3.023 3.590 2.678 3.392 3.987 3.074 3.788 4.403 C. Bridge Smal car 0.668 0.698 0.720 0.829 0.861 0.885 1.072 1.104 1.128 Small bus 1.250 1.484 1.675 1.827 2.122 2.363 2.338 2.606 2.848 Medium bus 1.969 2.286 2.561 2.956 3.385 3.734 3.896 4.271 4.620 Large bus 2.250 2.743 3.181 3.563 4.291 4.889 4.318 5.020 5.618 Smatrutdck 0.810 1.012 1.164 0.927 1.132 1.286 1.132 1.312 1.492 Madiumnbuck 0.872 1.075 1.278 0.978 1.202 1.406 1.182 1.406 1.630 1auretrud 1.100 1.348 1.596 1.272 1.545 1.76 1.513 1.786 2.044 Tradwrhailer 2.291 3.022 3.654 2.644 3.441 4.113 3.147 3.902 4.595 Ncte: Withut tbo project bodh th road cordifiw and flow wil detiorate quickly with ighbraffic growth and hift towards heavier vehicle Considered 2% p.. coat noruae. Sourmea: Jangd Proincial Trupmt DaIkstmemat and the Bank  - 52 - 3HH ANNEX 1 Table 5.a: Economic Evaluation And Sensitivity Analysis (Total Highway) (Yuan million, December 1996 prices) Base Cuc Sensity Anas Cas e Case 2 Caw 3 Caw 4 costs m - - RuVOC R ed Gener- Total Cost Net I b Net Gener- Cong.On Rcduced Net ated Total Benfts (+20%) Combu Road S. ed Exidst Acdd C"h Trafi Cost Bendis Year -cton Maht Total m sl Trdc Road - Totl Flow (-50%) (+20%) (-20%) (-20%) TotaL: Na hjingh b Hihwvay 19S7 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1933 93.93 93.93 (93.93) (93.93) (112.72) (93.93) (112.72) 19S9 207.77 207.77 (207.77) (207.77) (249.32) (207.77) (249.32) 1990 255.06 255.06 (255.06) (255.06) (306.0S) (255.06) (306.03) 1991 220.05 220.05 (220.1) (220.05) (264.06) (220.05) (264.06) 1992 0.00 3.69 3.69 507.23 25.35 7.15 2.51 542.29 533.6 237.28 249.21 199.22 193.49 1993 1.14 3.69 4.33 534.23 29.20 3.30 2.51 624.24 619.41 604.92 613.44 494.56 493.60 1994 5.03 3.69 3.72 674.67 33.74 9.64 2.51 720.55 711.33 694.96 710.03 567.72 565.97 1995 2.46 3.69 6.15 731.23 39.07 11.20 2.51 334.01 327.36 303.34 326.63 661.06 659.32 1996 3.36 3.69 7.05 907.16 45.33 13.03 2.51 963.08 961.03 933.35 959.63 767.41 766.00 1997 3.69 3.69 925.33 46.29 27.40 3.39 1,003.46 999.77 976.64 999.03 799.09 793.35 1993 3.69 3.69 941.79 47.10 27.55 3.39 1,020.33 1,016.64 993.10 1,015.90 312.57 311.S3 1999 3.69 3.69 953.12 47.93 27.71 3.39 1,037.65 1,033.96 1,010.00 1,033.22 326.43 325.69 2000 3.69 3.69 373.67 43.92 26.70 3.39 953.13 949.49 927.54 943.75 753.35 753.12 2001 3.69 3.69 934.41 46.31 24.63 3.89 1,009.74 1,006.05 932.65 1,005.31 304.10 303.37 2002 3.69 3.69 990.15 49.51 21.90 3.39 1,065.45 1,061.76 1,037.02 1,061.02 84S.63 347.94 2003 La 5.54 5.54 1,065.24 53.27 21.48 3.39 1,143.33 1,133.35 1,111.71 1,137.24 909.57 903.46 2004 /_a 5.54 5.54 1,146.10 57.32 21.06 3.39 1,223.37 1,222.34 1,194.13 1,221.73 977.17 976.06 2005 3.69 3.69 1,233.19 61.67 20.66 3.39 1,319.41 1,315.72 1,234.39 1,314.93 1,051.33 1,051.09 2006 3.69 3.69 1,327.01 66.36 20.26 3.39 1,417.52 1,413.33 1,330.66 1,413.09 1,130.32 1,129.53 2007 3.69 3.69 1,423.07 71.42 19.33 3.39 1,523.26 1,519.57 1,433.37 1,513.33 1,214.92 1,214.13 2003 3.69 3.69 1,543.14 77.43 19.43 3.39 1,648.94 1,645.25 1,606.55 1,644.51 1,315.46 1,314.72 2009 3.69 3.69 1,666.32 33.34 19.11 3.39 1,772.66 1,763.97 1,727.31 1,763.23 1,414.44 1,413.70 2010 3.69 3.69 1,730.63 39.05 13.79 3.39 1,392.41 1,333.72 1,344.20 1,337.93 1,510.24 1,509.50 2011 3.69 3.69 1,376.67 93.35 16.51 3.89 1,990.92 1,937.23 1,940.31 1,936.49 1,539.04 1,533.30 2012 3.69 3.69 1,973.12 93.92 14.51 3.39 2,095.44 2,091.75 2,042.29 2,091.01 1,672.65 1,671.92 2013 3.69 3.69 2,035.35 104.29 12.76 3.39 2,206.29 2,202.60 2,150.46 2,201.86 1,761.35 1,760.61 2014 3.69 3.69 2,191.70 109.96 11.22 3.39 2,323.77 2,320.03 2,265.11 2,319.34 1,355.32 1,854.53 2015 3.69 3.69 2,313.54 115.94 9.37 3.39 2,441.24 2,444.55 2,386.59 2,443.31 1,954.90 1,954.16 Total 73.30 EIRR = 50.4% 45.9% 42.1% 41.2% 37.1% NPV (12%) = 4423.6 4142.7 4140.9 3233.9 3170.0 Fht Year Rctum= 61.6% t a:Majornufiscing. Ib: Net of the mamnce sxcinp on the prooed exprswway and the eirting road. I_c: All fg rode  - 53 - 3HH ANNEX 1 Table 5.b: Economic Evaluation And Sensitivity Analysis (Section 2) (Yuan million, December 1996 prices) Base Case Sensitivity Anabsis Case I Case2 Case3 Case4 Costs Benefit - - - - VOC Reduced Gener- Total Cost Net /_b Net Gener- CongOn Reduced Net ated Total Benefits (+20%) Constru Road Say- ated Exist Accid Cash Traffic Cost Benefits Year -ction Maint Total inp Traffic Road -ents Total Flow (-50%) (+20%) (-20%) (-20%) Secdon 2: Zhenjiag-Chsngzhou 1987 0.00 0.00 0.00 0.00 0.00 0.00 0.00 19SS 29.49 29.49 (29.49) (29.49) (35.39) (29.49) (35.39) 1989 75.31 75.31 (75.31) (75.31) (90.37) (75.31) (90.37) 1990 88.84 8.84 (88.84) (88.84) (106.61) (88.84) (106.61) 1991 42.S6 42.86 (42.S6) (42.86) (51.43) (42.86) (51.43) 1992 0.00 1.40 1.40 106.21 5.31 2.76 0.78 115.06 113.66 111.01 113.38 90.65 90.37 1993 0.33 1.40 1.78 133.19 6.66 3.26 0.73 143.S9 142.11 138.73 141.75 113.33 112.98 1994 1.68 1.40 3.08 167.04 8.36 3.85 0.78 180.02 176.94 172.76 176.32 140.94 140.32 1995 0.82 1.40 2.22 209.48 10.4S 4.55 0.78 225.29 223.07 217.83 222.62 178.01 177.56 1996 1.12 1.40 2.52 262.70 13.15 5.38 0.78 282.01 279.49 272.92 278.99 223.09 222.58 1997 1.40 1.40 269.17 13.45 11.49 1.56 295.67 294.27 287.55 293.99 235.14 234.86 1998 1.40 1.40 268.85 13.44 11.45 1.56 295.30 293.90 287.18 293.62 234.84 234.56 1999 1.40 1.40 268.53 13.43 11.41 1.56 294.93 293.53 286.22 293.25 234.54 234.26 2000 1.40 1.40 268.21 13.41 11.36 1.56 294.54 293.14 286.44 292.86 234.23 233.95 2001 1.40 1.40 285.39 14.27 10.29 1.56 311.51 310.11 302.98 309.83 247.81 247.53 2002 1.40 1.40 302.57 15.13 9.21 1.56 328.47 327.07 319.51 326.79 261.38 261.10 2003 /_a 2.10 2.10 325.90 16.30 9.01 1.56 352.77 350.67 342.52 350.25 280.12 279.70 2004 /-a 2.10 2.10 351.03 17.56 8.81 1.56 378.96 376.86 368.08 376.44 301.07 300.65 2005 1.40 1.40 378.09 18.91 8.62 1.56 407.18 405.78 396.33 405.50 324.34 324.06 2006 1.40 1.40 407.24 20.37 8.43 1.56 437.60 436.20 426.02 435.92 348.68 348.40 2007 1.40 1.40 438.64 21.94 3.25 1.56 470.39 463.99 458.02 46S.71 374.91 374.63 200S 1.40 1.40 472.46 23.63 8.07 1.56 505.72 504.32 492.51 504.04 403.18 402.90 2009 1.40 1.40 508.88 25.45 7.90 1.56 543.79 542.39 529.67 542.11 433.63 433.35 2010 1.40 1.40 548.10 27.41 7.73 1.56 584.80 583.40 569.70 583.12 466.44 466.16 2011 1.40 1.40 578.75 28.94 6.83 1.56 616.08 614.68 600.21 614.40 491.46 491.13 2012 1.40 1.40 611.12 30.56 6.04 1.56 649.28 647.88 632.60 647.60 518.02 517.74 2013 1.40 1.40 645.30 32.27 5.34 1.56 684.47 683.07 666.94 682.79 546.18 545.90 2014 1.40 1.40 681.39 34.07 4.72 1.56 721.74 720.34 703.31 720.06 575.99 575.71 2015 1.40 1.40 719.50 35.97 4.17 1.56 761.20 759.80 741.82 759.52 607.56 607.28 Toal 240.50 EIRR = 44.1% 43.6% 39.9