China - Wuhan Urban Transport Project

Document of The World Bank FOR OFFICIAL USEONLY ReportNo: 25590-CHA PROJECTAPPRAISAL DOCUMENT ON A PROPOSEDLOAN INTHEAMOUNT OFUS$200MILLION TO THE PEOPLE'SREPUBLIC OF CHINA FOR A WUHANURBANTRANSPORT PROJECT February 12,2004 Transport Sector Unit IEast Asia and Pacific Region 1 This documenthas a restricteddistribution and maybe usedby recipientsonly inthe performanceof their official duties. Its contents may not otherwise be disclosedwithout World Bank authorization.  CURRENCY EQUIVALENTS (Exchange Rate Effective January 2004) Currency Unit = RMB Yuan RMB1.00 = US$0.12 US$l.OO = RMB8.28 FISCAL YEAR January 1 -- December 31 ABBREVIATIONSAND ACRONYMS ATC Area Traffic Control VA Vehicle-actuated BRT Bus Rapid Transit VMS Variable MessageSigns CITC China International Tendering Company WBCC Wuhan Bridge Construction Company CMIS Computerized Management Information System WBOB Bank's Beijing Office CNAO China National Audit Office WCC Wuhan Construction Commission HPAB HubeiProvincial Audit Bureau WCCTPDI Wuhan ComprehensiveTransport Planning HPFB HubeiProvincial FinanceBureau And Design Institute I/M Inspection andMaintenance WGPTC Wuhan Group Public Transport Corporation MOF Ministry of Finance WMAB Wuhan Municipal Audit Bureau MPLG Municipal Project Leading Group WMCIMO Wuhan Municipal Capital Investment MVECS Motor Vehicle Emission Control Strategy Management Office NMT Non-motorizedTransport WMEDRIC Wuhan Municipal Engineering Design & N M V NonMotor Vehicle ResearchInstitute Company Ltd. OPO One PersonOperation WMFB Wuhan Municipal Finance Bureau PMR Project Management Report WMG Wuhan Municipal Government PPLG Provincial Project Leading Group WPO Wuhan Project Office PSO Public Service Obligation WPTGC Wuhan Public Transport Group Company RM RoadMaintenance WPTMO Wuhan PT Monitoring Office RMMS Road Maintenance Management System WTC Wuhan Transport Commission RMMIS RoadMaintenance Management Information WUCFMO Wuhan Urban Construction Fund System Management Office RUE RoadUser Education WUCUFU Wuhan Urban Construction Utilization of SEA Strategic Environmental Assessment PMO Foreign Investment Project SEPA State Environmental Protection Administration Management Office T A Technical Assistance WUTP Wuhan Urban Transport Project TDM Travel Demand Management WUTPLG Wuhan UrbanTransport Project Leading Group T M Traffic Management WUTPO Wuhan UrbanTransport Project Office UTP Urban Transport Planning WUTS Wuhan Urban Transport Strategy Vice President: Jemal-ud-din Kassum, EAPVP Country ManagedDirector: Yukon Huang, EACCF Sector ManagedDirector: Jitendra N.Bajpai, EASTR Task Team Leader/Task Manager: EdwardDotson, Senior Urban Transport Specialist, EASTR  FOROFFICLALUSEONLY CHINA WUHAN URBAN TRANSPORT PROJECT CONTENTS A. Project DevelopmentObjective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1, Sector-related CountryAssistance Strategy (CAS) goal supported by the project 3 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 7 C. Project Description Summary 1. Project components 9 2. Key policy and institutional reforms supported by the project 10 3. Benefits and target population 11 4. Institutional and implementation arrangements 11 D.Project Rationale 1. Project alternatives considered and reasons for rejection 13 2. Major related projects financed by the Bank andor other development agencies 14 3. Lessons learned and reflected inthe project design 15 4. Indications of borrower commitment and ownership 16 5. Value added o f Bank support inthis project 16 E. Summary Project Analysis 1. Economic 17 2. Financial 17 3. Technical 19 4. Institutional 20 5. Environmental 21 6. Social 23 7. Safeguard Policies 25 This documenthas a restricteddistributionandmay be used by recipients onlyin the performance of their official duties. I t s contents may not be otherwise disclosed without World Bank authorization.  F. Sustainability and Risks 1. Sustainability 26 2. Critical risks 26 3. Possible controversial aspects 28 G. Main Conditions 1. Effectiveness Condition 28 2. Other 29 H. Readiness for Implementation 30 1. Compliance with Bank Policies 31 Annexes Annex 1: Project Design Summary 32 Annex 2: Detailed Project Description 41 Annex 3: Estimated Project Costs 58 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 59 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 63 Annex 6: (A) Procurement Arrangements 65 (B) Financial Management and Disbursement Arrangements 74 Annex 7: Project Processing Schedule 80 Annex 8: Documents inthe Project File 81 Annex 9: Statement o f Loans and Credits 82 Annex 10: Country at a Glance 86 Annex 11: Environmental Assessment 88 Annex 12: Resettlement 95 Annex 13: Wuhan Urban Transport Strategy 100 Annex 14: Reform o f Public Transport 109 MAP(S) 1. IBRDNo. 32429 2. IBRDNo. 32430 3. IBRDNo. 32431  CHINA WuhanUrban Transport Project ProjectAppraisalDocument East Asia and Pacific Region EASTR 30RROWER 381.80 16.40 [ 398.20 [BRD 71.00 1I 129.00 200.00 rotal: 452.80 I 145.40 II _ _ . 598.20 ..- -. - I - Borrower: PEOPLE'S REPUBLIC OF CHINA Responsible agency: MUNICIPALITY OF WUHAN Project Office Address: No. 130Yanjiang Ave. Hankou Wuhan China Contact Person: HuiShuZhi, Vice Director Tel: 86-27-85886173 Fax: 86-27-82811498 Email: Whjtxmb@Public.Wh.Hb.Cn EstimatedDisbursements ( Bank FYlUS$m): Project implementation period: December2003 December2008 - Expectedeffectiveness date: 06/0112004 Expected closing date:*06/30/2009  A. Project Development Objective 1. Project development objective: (see Annex 1) The Wuhan Urban Transport Project will promote the development o f an integrated, efficient, and sustainable transport system for the movement o f people (especially the poorer sections o f society) and goods inWuhan. More specifically, the project aims to support: (i) Investments intransport infrastructure and services that address the needs o f the existing system - inparticular, the issues related to capacity, safety andsustainability, andmobility ofusers, (particularly the most vulnerable sections o f society) within a long-term framework provided by the approved Master Plan (ii) Formulation o f a transport strategy to guide investment decisions (iii) Reforms to improve performance o f bus service delivery. 2. Key performance indicators: (see Annex 1) The key performance indicators to measure the progress on each o f the three project development objectives are listedbelow (see Annex 1): (i) Investments intransport infrastructure and services 0 -Capacity and EfJiciency: to evaluate improvements in - Travel times o n key external/cross town, cross river and central area routes Average daily ridership on the bus system 0 Mobility: reduction intravel times for users o f most heavily used modes o f transport 0 Sustainability: - Implementationo f annual road maintenance plans based on the Road Maintenance Management System (RMMS) - Formulation and adoption o f an effective motor vehicle emission control strategy (ii) Support for the Wuhan Urban Transport Strategy (WUTS) through the following measures: 0 Further detailed studies as proposed inthe WUTS Study Report 0 Preparation o f a transport policy "White Paper" 0 Identification o f Five year investment programs (iii) Bussystemreformthrough 0 Completion o f bus route tendering on a competitive basis across the bus system The Wuhan Municipal Government (WMG) agreed with these performance indicators at negotiations. For the road safety interventions inthe project, as it is technically not possible to forecast the expected reduction inthe incidence and severity o f accidents, particularly among pedestrians and non-motorized transport (NMT) users, no indicator could be agreed. However the interventions will be monitored and evaluated. - 2 -  B. Strategic Context 1.Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Document number: R2002-02 18 [IFC/R2002-02241 Date of latest CAS discussion: 12/19/02 The CAS supports China's transition from a rural, agricultural society to an urban, industrial society, and from a centrally planned to a more globally integrated market-based economy. The CAS also notes the growing concerns about the social consequences and sustainability o f China's economic growth. These economic trends, at the core o f China's Tenth Five-year Plan, also form the basis for the three themes o f Bank's operation strategy inChina, namely to: (1) Improve the business environment and help accelerate China's transition to a market economy (2) Address the needs o f the poorer and disadvantaged people andregions (3) Facilitate a more environmentally sustainable development process The Wuhan UrbanTransport Project (WUTP) would enhance the urban efficiency and mobility within an important medium sized city situated inthe center of China, and encourage a market-based delivery o f urban transport services, particularly public transport. The physical and institutional elements o f the project address the three CAS themes. Development of a sustainable and balanced urban transport systemwould improve the business environment and labor mobility inWuhan. Reform o f state owned bus companies and introduction o f competition inthe supply o fbus services would accelerate China's transition to a market economy. The project also supports improvement in safety o f transport facilities and mobility o f the economically disadvantaged through investments intraffic management measures, and improved facilities for pedestrians, NMT and public transit. Finally, the development o f a comprehensive emission mitigation program would promote an environmentally sustainable development process. 2. M a i n sector issues and Government strategy: 2.1 Main Sector Issues. 2.1.1 Rapid growth in urbanization and motorization. Both trends are actively encouraged by the central government and expected to grow further inthe foreseeable future. The urban population inChina is projected to increase from 30.2 percent (3 19 million) in 1995 to 49.1 percent of the total population (71 1.7 million) in2020. Car ownership, which has increased rapidly inthe last decade, is projected to increase tenfold from a current average o f 10 to 100 per 1000 residents in2020. Both trends are also true o f Wuhan: the city's Master Plan projects an increase inthe city's population from 3.9 million in 1998 to 4.5 million in 2020. Similarly, auto-ownership rates inthe urban districts o f Wuhan increased from 56 motor vehicles per 1,000 residents in 1998 to 99 per 1,000 in2001 and are projected to increase to 116 in2010 and 167 in 2020. Per-capita travel is expected to increase accordingly: from 1.98 tripdday in 1998 to 2.41 in 2010 and 2.65 in2020. Economic opportunities in growing Chinese cities like Wuhan are extensive, and if `hukou'relatedrestrictions to urban migration are relaxed it is likely that growth inthe city could be even greater. - 3 -  2.1.2 Acceleratedinvestmentin roadcapacitywithout adequate planning. Rapid increase inpopulation and number o f vehicles is overwhelming the urban transport infrastructure inWuhan, which typifies the general experience o f most Chinese cities. Its transport infrastructure is overburdened, and the last decade saw a decline inmobility for most classes o furban trips. City authorities inWuhan are addressingthese issues primarily with an ambitious road constructionprogram. Significant local financing is available from domestic banks for investments in road expansion. However, this `solution' creates as manyproblems as it solves. Firstand foremost, mobility on non-motorized modes is further degraded. Secondly, the planning process is not systematic and comprehensive, and does not assure that a well thought out, properly prioritizedroad-building program emerges from what starts (as is the case elsewhere inthe world) as a list o f perceived priorities. Perhaps the most important challenge in Wuhan (and in other similar Chinese cities) is to ensure that the sign8cant investments that will be made in urban infiastructure in the coming two decades, will eficiently enhance the mobility and safety of residents in a sustainable manner. While the description that follows is particular to Wuhan, it is equally true o f many other Chinese cities. 2.2 About Wuhan Wuhan, the capital of Hubei Province, is one o fthe foremost centers of economic growth outside the coastal regions o f China. The Yangtze and Han rivers divide the city o f Wuhan into the three towns o f Wuchang, Hankou and Hanyang. In 1998, the GDP o f this industrial, commercial and trade center was FWB 101.5 billion. The average GDP growth from 1990 to 1998 was 15.3 percent higher than the national average. The city's economy is expected to grow at 7 percent to 9 percent annually inthe near future. 2.3 Trends in mobility 2.3.1 Decliningpedestrianand cyclistmobility. Though still significant (37 percent pedestrian and 29 percent bicycle trips together accounted for two-thirds of all trips inWuhan ina 1998 survey), the mobility o f pedestrians and cyclists is declining, as motor vehicles progressively dominate the roads. NMT, traditionally the mainstay o f urban transport in Chinese cities and still the mainstay of the poorer sections o f the society, currently suffers from inadequate attention from city transport planners. This is particularly true from a safety perspective: pedestrian crossings are limited, traffic management for cyclists is based mainly on control and prohibition, there are no NMT networks, and cyclists are often forced to operate indangerous mixed traffic. The construction o f new roads, built essentially to accommodate automobiles, is aggravating these problems. 2.3.2 Traffic congestionresultingfrom inadequatecapacityand poor management. The road network remains inadequate and overburdened by the increase inthe number o f motor vehicles. Though increasing innumbers, motor vehicles accounted for only 12 percent o f all trips in 1998. The functional road hierarchy is incomplete and ill-defined resulting inmost traffic being loaded onto a few major arterials, key lmks inthe network are missing, and traffic management (signals, channelization) is limited and often inadequate (long cycle times, no redaspects at 20 percent o f the signaledjunctions). Encroachment from businesses and parkingfurther exacerbates this shortage. In - 4 -  Wuhan, three specific forms o f traffic significantly increase congestion: traffic associated with the Hankou town centre, cross-river traffic inthe city core that principally uses two Yangtse river crossings, and some o f the through and intemal traffic that comes through the city center. 2.3.3 Inadequatelymaintainedroads. Maintenance budgets typically provide only 40 percent o f what is, infact, required. Much o f this provision goes towards staff salaries, leaving little for road maintenance. There i s no systematic maintenance or asset management system inplace. Organizationally, government and operator functions are combined inpublic maintenance units and a number o f different government organizations are responsible for road maintenance and reconstruction. 2.3.4 Publictransport requiresmuch-neededattention. Though public transport is important and growing (buses accounted for a 22 percent share o f trips in 1998 and this is forecast to grow significantly, both inshare and volumes), the sector is beset by the following problems/concems/issues: 0 Limited network coverage Despite a substantial number o f bus services (in2001 there were - seven bus companies, operating 5500 buses on 244 routes over 4300 kms), the overall coverage is limited. The route network needs revision: most bus routes are inthe city center while the extensive new developments on the urban fringe are poorly served. Routes runprimarily along arterial roads and access often requires long walks. 0 Poor on-street management - Busvolumes are unusually highon primary routes (approaching 500 per hour on maincorridors and the Yangtse river bridges), stops are congested, and on-street management o f buses is poor. 0 Shortage of depot and terminalfacilities - More than other cities, Wuhan suffers from a shortage o f public transport depot and terminal facilities. Buses often have to be parked o n the streets and poorly planned terminals impede efficient transfers. 0 Unclear institutional roles Institutional problems are similar to other Chinese cities. Though - plans for reform are being finalized, the roles and responsibilities between the municipality and the bus companies need clarification. Buses do not operate within a competitive/market-basedenvironment. 0 Lowfares - Fares are low, though they cover more than 90 percent o f the operating cost (excluding capital costs), inthe six state-owned bus companies (the seventh is a joint venture with a Hong Kong company). Lack of integrated networkplanning - The municipality has an ambitious plan for the construction o f a rail network o f six metro lines. The initial elevated line is currently under construction. However there appears to have been little integration o f rail andbus service planning. 2.4 Institutionalstructure and Policymaking 2.4.1 Urbantransport is largelythe responsibilityof the municipalgovernment the provincial and - state governments have a relatively minor role. The municipal government i s responsible for planning, financing, and implementing all infrastructure, and also for operations and policy. 2.4.2 Investmentsintransport infrastructure are directedby a 20-year UrbanTransportMaster Plandeveloped bythe municipal government. The Master Planis a legal document that needs to be approved by the State Council (inthe case o f cities with a population o f over 1million). Intheory, this structure is meant to ensure continuity inthe planningprocess and bolster technical integrity over political expediency. Inpractice, the task team's experience indicates that it is infact short-term political expediency that prevails. The Twenty-year Master Plan is a non-fiscally constrained - 5 -  investment plan without any systematic processes for the planning,programming and budgeting o f investments. There are no requirements or incentives inthe planto formulate or implement integrated and modally balanced transport policy. Further, once a plan is approved, local authorities retain significant latitude to set priorities and timings for individual projects. 2.4.3 Mosttransport planningand policymakingoccursin an unsystematicad-hoc manner. There i s a multiplicity o f uncoordinated agencies, with little day-to-day contact, involved in aspects o f urban transport planning and operations. They include, the Urban Planning Bureau, the Municipal Construction Bureau, (responsible for road construction and maintenance), the Wuhan Transport Commission (responsible for public transport provision and regulation), the Traffic Police (responsible for traffic management and enforcement) and the Environmental ProtectionBureau (responsible for vehicle emission controls). These (and other) agencies are bound by few controls or requirements that would, otherwise, ensure coordinated formulation and implementation o f transport planning and policy. For example: 0 A dearth of stablefinancing sources, particularly for maintenance o f existing infrastructure. When funds for construction are needed, the city has considerable leeway to institute new special purpose taxes but maintenance is often ignored. 0 Land-use planning and transport planningprocesses operate completely independently o f each other and are not integrated inany manner. 0 Tools exist but are not used optimally. Wuhan has relatively good data: Origin Destination household survey data (1998), motor vehicle OD data (1999), bicycle and taxi use data (2001) and data from surveys o f major bus terminals. A travel demand model has been built to forecast travel demand for 2010 and 2020, and assignments made to the Master Plan road network. A separate study was undertaken to define the rail network. However these studies were not used to test the Master Plan transport proposals or to define the investment plans for 2005 or 2010. 2.5 Road Safety Modal shift towards a larger use o f motor vehicles has heightened the road safety concerns inWuhan. The incidence and severity o f accidents are high, even when compared with other cities o f similar population and motorization within China. Road accidents appear to be largely due to increased speeds and volumes o f vehicles, poor driver behavior and poor road sense o f pedestrians. In2001, the total number o f road accidents was 11,595 with 631 persons killed and 7,517 persons seriously injured. Economic losses (excluding the costs o f pain, grief and suffering and projected contribution to society) were RMB 26 million. Since 1999, the number o froad accidents has declined slightly while the number o f fatalities and casualties have remained stable. InWuhan Municipality, 80 percent o f accidents occur inurban areas with 50 percent considered fatal. The fatality rate/million population in2000 was 90, compared to 55 inShanghai (1999). - 6 -  2.6 Air and Noise Quality Vehicular emissions are not a serious issue, except inareas close to main roads, where particulates are a problem despite lead-free fuel used since 1998. The city government has a basic emissions control strategy inplace. National vehicle emission standards are enforced through an annual testing and inspection system complemented (since 2000) with spot random checks. The city government has started planninga modeling effort to quantify the contribution o f different sources to air pollution. Noise is also considered a severe problem inthe urban center and the government is working on strategies to lessen the noise impact o f.motor vehicles. 2.7 Government Strategy Urban transport issues are largely the domain o f the local Wuhan Municipal Government (WMG), which is currently focusing on accelerating expansion o f the road network. Inthe past, it was the political leadership that made the decisions regarding new road construction, with technical analysis playing a subservient role (ifany). Though a new generation o f planners equipped with adequate analytical tools exists inWuhan, they lack the experience and influence to be effective. Apart from new road construction, the most significant urban transport initiative undertaken by WMG i s the construction o f a light-rail line. Interms o f bus transport, W G has been working on reorganizingthe bus transport sector since 1999. InOctober 2001 the overall responsibility for system planning was movedto the newly created Wuhan Transport Commission (WTC). The WTC has outlined a program for reform, which was recently approved by WMG. A summary is presented in Annex 13. The Government has also implementeda series o f policy measures related to urban transport. New motorcycle registrations have been banned since mid-2002. Inearly 2003, the city banned `mamus' (motorized three-wheeled jitneys). The reason behind the government ban on motorcycles i s unclear. Before the ban, motorcycles were a popular mode o f transport (registrations grew at 27 percent over the 1991-2001 decade and by 2001 accounted for over halfo f the 447,505 registered motor vehicles inthe municipality). Though there are valid safety issues related to their use, motorcycles present a relatively cheap and efficient (interms o f energy and use o f road space) altemative to autos that fulfills many o f the same aspirations for personal mobility. Though no systematic analysis is available, it is unlikely that banning motorcycles outright without accompanying automobile relatedrestraints would offer a sustainable solution to congestion problems. 3. Sector issues to be addressed by the project and strategic choices: 3.1 Sector Issues to be addressed The most important sector issue that this project addresses is the institutional coordination across agencies and modal policies. - 7 -  The aim o f the project is to develop W T S into aphased andfinancially constrainedprogram of investments andpolicies based on systematic analysis and inputs from all concemed stakeholders (details inAnnex 14). Inaddition, this project will support institutional reform in theprovision of public transport services inWuhan, basedonthe proposals outlined by WTC. The physical investments, proposed inthe project, address the key issues identified inWUTS, inparticular: 0 Enhancingpedestrian and NMT safety by constructing new road infrastructure and missingroad links, and implementing traffic management and road safety programs 0 EnhancingpedestriadNMT mobility by financing a network o f pedestrianiNMT routes including new footways and pedestrian crossing facilities 0 Developing a road network with a rationale structure and clear functional hierarchy that supports sustainable development 0 Reducing traffic congestion and enhancing mobility and safety for vehicle users by increasing road capacity and implementing integrated traffic management measures Improving road maintenance by procuring road maintenance equipment and financing maintenance on part o f the existing Wuhan roadnetwork 0 Improving the quality ofpublic transport service by financing investments inphysical infrastructure (termini, bus-stops) as well as computer management systems 0 Improving air quality by facilitating implementation o f a motor vehicle emissions control strategy 3.2 Strategic Choices The organization o f the project, and the selection o f its components and appropriate fundinglevels reflect three strategic decisions. 3.2. I Encouraging an integrated multi-sectoral approach. As inprevious Bank financed urban transport projects inChina, it was necessary to encourage an integrated multi-modal approach inthe Wuhan project, essentially to ensure that the funding program for the project reflects the immediate needs o f all modes, and addresses the key negative impacts o f transport. Developing a complex multi-facetedproject was the only credible way to bringall the various agencies, which provide urban transport services inthe city, to work together towards an integrated transport vision that reflects the needs of all o f Wuhan. 3.2.2 Focusing on the strategy as the centralprocess innovation. The team considers this to be the most useful and innovative support that the Bank can give to WMG, since it will provide the basis for long term rational decision making on transport investments, and improved service delivery. It will also leave behind a legacy of tools and empowered professionals who understand the value o f systematic analysis insupporting, advocating or opposing ideas as appropriate. 3.2.3 Selectivity: focusing onpublic transport reform. An integrated multi-modal project, such as this, needs to choose issues carefully. There were many policy, investment and process issues where the Bank could have added value such as the proposed rail system, integrating land-use andtransport - planning, pricing-based demand management measures, or sustainable user-charged financing mechanisms. However, the project focuses on two primary reforms: the development o f an integrated approach to transport planning based on a systematic transport strategy, and public transport reform. - 8 -  C. Project DescriptionSummary 1. Projectcomponents (see Annex 2 for a detailed description and Annex 3 for a detailed cost breakdown): The proposed project has six components as describedbelow: Component1: Roadnetworkdevelopment. This component addresses the immediate needto improve the roadnetwork operations withinthe city, and to expand the bicycle and pedestriannetworks. The five programs, within the component, are designed to: 0 provide suitable routes for through or cross-town traffic 0 improve utilization o f existing cross-river bridges 0 relieve congestion incentral down-town areas 0 provide adequate roadnetworks indevelopment areas 0 provide safe conditions for pedestrians The civil works for these five programs include the construction o f new primary, arterial and local roads, upgrading/widening o f existing roads, construction o f interchanges and construction o f pedestrian overbridges or underpasses. Component2: Traffic managementand road safety. The aim o fthis component is to builduponthe strengths o f the existing transport network management to better utilize existing assets and resources. The detailed content includes 0 pedestrian and bicycle measures 0 bus priority measures 0 channelization o fjunctions 0 provisiono f traffic signals at junctions and an urban area traffic control (ATC) system 0 a road safety and accident analysis program 0 a road user education program 0 road marking equipment Component3: Publictransport. The objective of this component is to facilitate an increase inthe efficiency and effectiveness o f bus services inthe city. A key element o f the effort related to public transport is support for the ongoing reform o f public transport operations. The physical investments related to this component include: 0 a Computerized Management Information System (CMIS) to increase the efficiency o f operators in routine administrative and technical tasks, and a GPS based bus location systemto improve the on-street management o f bus operations 0 construction o f passenger facilities, including bus interchange stations, bus terminals and bus stop bays The component also includes studies o f bus priority and bus rapid transit measures on selected corridors. Provision is made for the implementationo f a pilot Bus Rapid Transit (BRT) scheme, if considered viable. Component4: Roadmaintenance. This component aims to: 0 assist the government's intent to reform and improve the current road maintenance management through training and study for Road Maintenance Management Information System (RMMIS) 0 improve the current roadmaintenance facilities by purchasing advanced road maintenance equipment reconstruct the most damaged road sections inWuhan. - 9 -  Component5: Environmentalmanagement. The aim ofthis component is to mitigate the adverse impacts of road construction, minimize vehicle emission, and increase the positive environmental impacts o f the project. The detailed content includes: 0 constructing noise barriers and other facilities to mitigate noise from the new roads 0 plantingalong new roads 0 expanding the vehicle emission andtraffic noise monitoring system 0 facilitating implementation o f a motor vehicle emission control strategy 0 upgradingthe vehicle inspection and maintenance (I/M)system. Component6: CapacityBuildingandTechnicalAssistance(TA). This component will strengthen the technical and management skills o f the municipal staff, and includes: 0 domestic and intemational training for officials from project implementing agencies 0 funding for consultant studies on issues and topics relatedto the other five components o fthe project 0 office equipment to enhance the productivity o f the implementing agencies 4. Roadmaintenance 5. Environmental management 6. Capacity buildingand TA 7.90 1.3 7.20 3.6 Total Project Costs 579.80 96.9 198.00 99.0 Interest during construction 16.40 2.7 0.00 0.0 Front-end fee 2.00 0.3 2.00 1.o Total FinancingRequired 598.20 100.0 200.00 100.0 2. Keypolicyand institutionalreforms supportedby the project: The project will seek to promote policy and institutional reforms intwo major areas. 2.1 The development of an integratedapproachto transport planningbased on a systematic transport strategy. The project will seek to assist WMG in 0 establishing a policy and institutional framework for integrated urban transport investment and management 0 improving the procedures for funding allocation to different modes 0 developing opportunities that will allow different planning agencies to work together. Assistance will also be givento develop an initial investment strategy and procedures for subsequent updates o f the plan. Details o f the strategy are available inAnnex 14. - 1 0 -  2.2 The regulatoryandplanningframework for publictransport. The project will aim to support WMG's reform efforts to: 0 separate the responsibilities o f govemment from those o f the operators 0 establish a new operational and managerial system that encourages competition and provides higher quality transport services 0 use market mechanisms to attract funding from sources other than the municipal government 0 improve the P T regulatory framework, especially to establish a bus route franchising policy 0 promote integration o f rail and bus services and promote bus rapid transit services inthe city Details o f WMG plans are available inAnnex 13. 3. Benefitsand target population: The project is expected to benefit all users of the urban transport system, in all income groups. Major benefits will include: 0 saving o f personal travel time and freight time for all road users as a result o f reduced traffic delays and improvements inroad maintenance 0 improved travel comfort and convenience for bus users 0 improved travel comfort and safety for pedestrians and non-motorized vehicle users 0 increasedroadmaintenance finding and reduced maintenance costs which will reduce operating costs for all vehicle owners 0 reduced vehicle emissions To ensure that the project is indeed designed to maximize the benefits to the economically and socially disadvantaged, the team has conducted a survey o f the travel pattems and needs o f the vulnerable groups (the economically disadvantaged, women, andrecent migrants) inWuhan. Results from this study will be used inthe detailed designof project components during implementation. Inaddition, WMGtransport planningand operating staff are expected to benefit from the extensive capacity buildingcomponents o f the project. 4. Institutionalandimplementationarrangements: 4.1 ExecutingAgency. The project will be executed by the Wuhan Municipal Government (WMG). WMGhas established a project team, comprising of technical staff from the concemed government agencies, to oversee the preparation and implementation o f the project. The Wuhan Municipal Capital Investment Management Office (WMCIMO) will have overall responsibility for the preparation and implementation of the project. The Wuhan Urban Transport Project Office (WUTPO), under WMCIMO, will be responsible for managing and coordinating the implementation o f the project by the various implementing agencies. 4.2 ProjectGuidance. At the municipal level the Wuhan Urban Transport Project Leading Group (WUTPLG) has been established to provide overall guidance to WUTPO inproject preparation and implementation. -11-  4.3 ImplementingAgencies. Responsibility for implementation o f the individual components will be as follows: Component ResponsibleAgency Road Infrastructure Wuhan Bridge Construction Company (WBCC) - a Unit o f WMCIMO. Public Transport Wuhan Transport Commission (with the participation o f Wuhan Group Public Transport Corporation (WGPTC) for the CMIS Traffic Management Public Security Bureau Road Maintenance WBCC for civil work Wuhan Urban Management Bureau for RMReform, RM Management Information System, and Equipment Procurement EnvironmentalManagement Municipal Environment Bureau Institutional Development & TA Individual implementing agencies will each manage their own TA. The Project Office (WUTPO) will have responsibility for procurement. Subproject offices have been established ineach o f the implementing agencies. 4.4 Funds Flow. The Ministryo f Finance (MOF) will on-lend World Bank loan funds to the Hubei Province Government (through the Provincial Financial Bureau). The Provincial Financial Bureau will intumon-lend funds to WMG (through the MunicipalFinancial Bureau), which will inturn on-lend funds to WMCIMO. WMCIMO will act as the representative of the municipal government to manage the loan and ensure future repayment. The sources of counterpart funds and repayment are the municipal budget and extra budget sources, which have been analyzed insection E and Annex 5. Loan type will be LIBOR-based Variable-spread loan anduse U S dollar as single currency. 5. ProjectManagementActivities 5.1 Procurement, The project office will be responsible for oversight and coordination o f procurement activities during the implementationo f the project. A division has been established andthe Bank team has provided some basic training to the staff. The subproject offices for each component have also allocated staff to assist inthe procurement activities. The Bank will provide further training to staff inthese offices. A procurement planhas been developed as part o f the Project ImplementationPlan (PIP). 5.2 Financialmanagement. The project office will be responsible for all activities o f financial management, 5.3 Environment. Responsibilities for all environmental management activities are includedinthe Environmental Management Plan (EMP). - 1 2 -  5.4 Resettlement. Responsibilities for implementation o f resettlement are documented inthe Resettlement Action Plan (RAP). 5.5 Construction supervision. The project will use Bank funds to hire civil work supervision teams to undertake construction supervision and quality control o f civil works. Since the Wuhan Bridge Company (WBC) will be the implementing agency for civil works under the road network improvement androad maintenance components, W B C will also have overall responsibility for construction supervision for all components. W B C will act as the owner o f the civil works during construction. WBC will select a construction supervision consultant team to act as the chief engineer, responsible for quality and contract management and hiringo f site engineers. W B C will also hire a small intemational consultant team to act as advisors to WBC, to provide training inFIDICBank construction supervision responsibilities and procedures, and to set up a client/engineer/contractor management procedure inthe first year. A small team o f local consultants will supervise the initial civil works contracts during the first year o f the project. Construction supervision consultant services for all future years will be open to intemational and local consultant companies. 5.6 ProjectImplementationPlan(PIP). Each implementing agency has prepared a PIP for its respective component, based on which WUTPO has prepared a comprehensive PIP. The PIP will guide the implementation o f the project and will be updated as requiredby WUTPO with the help o f each sub-project office. 5.7 ProgressReporting andPlanning. WUTPO will be responsible for preparing quarterly and annual progress reports and annual implementation programs, based on inputs from the subproject offices. The quarterlyreports will focus onphysical and financial progress, outline implementation problems for all components, and suggest corrective actions. The Annual Progress Report will be used to review the progress achieved inthe preceding year, update the PIP, and set out the implementation program for the following year. Halfway through the implementationperiod (around M a y 2006), there will be a mid-term review, which will consider if any major changes are requiredinthe project structure. D. Project Rationale 1. Projectalternativesconsideredand reasonsfor rejection: Various alternatives were considered and explored for the scope and size o f the project, and also for the financing levels o f individual components. Different alternatives were also assessedfor the selection o f schemes within each component, particularly the roadnetwork development component. 1.1 Project scope, size, and component financing levels ProjectScope. The initial investment proposal presentedby Wuhan municipality focused mainly onroad infrastructure. The Bank, however, expressed its concern over the limitedscope o f the project. Subsequently, a more comprehensive urban transport improvement program was developed by WMG. Allocation betweencomponents. The allocationpresentedinsection C was a result of (i) feasibility studies conductedby individual implementing agencies to define the minimum and desirable levels o f investment for each component; and (ii) discussions with WMG to determine the level o f investment to components 2 through 6 (all components except road network development). - 13-  1.2 Selection of schemes Roadcomponent. The road development schemes were selected from a list generated by WMG. The schemes were tested extensively, prior to their selection, using the network analysis modeling tool, developed as part o f the transport strategy development effort. As a result o f this analysis WMG dropped some schemes that it was initially committedto, including the eastern leg o f the middle ring road in Wuchang. Almost all o f the infrastructure investment has been finalized. Additional analysis o f traffic demand, costs, benefits and desirable construction dates o f the remaining schemes will be undertaken inthe initial implementationperiod o f the project to select and prioritize the most appropriate schemes for assistance. The public transport component. Extensive bus priority measures, including a busway, were considered. Initial analysis suggested that bus priority measures could not be technicallyjustifiedat this stage. On major corridors flows o f up to 500 buseshour dominate the available road space and there is no evidence (to support bus priority) o f buses being unduly delayed by other traffic. However, provision has been made for further analysis and for the detailed design and implementation o f any resulting limitedpriority measures that may be needed. Further studies are proposed to include one o f BRT alternatives, which takes account o f LRT/Metro lines. 2. Major related projectsfinanced by the Bankand/or other developmentagencies(completed, ongoingand planned). Latest Supervision Sector Issue Project (PSR) Ratings [Bank-financed projects only) Implementation Development 3ank-financed Progress (IP) Objective (DO) Sector issues in all projects are Shanghai Metropolitan S S generally those listed insection B2. Transport Project I(completed) 1992 Shanghai Metropolitan S S Transport Project I1 (completed) 1993 Guangzhou City Center S . S Transport Project (ongoing) 1998 Liaoning Urban Transport S S Project (ongoing) 1999 UrumqiUrban Transport S S Project (ongoing) 2000 Shijiazhuang Urban Transport S S Project (ongoing) 2001 )ther development agencies '/DO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), I- (Highly Unsatis ctory) - 1 4 -  3. Lessonslearned and reflectedin the project design: Useful lessons can be drawn fromthe experiences o f two completed urbantransport projects financed by the Bank inShanghai, and four ongoingprojects inChina - Guangzhou, Liaoning, UrumqiandShijiazhuang. 3.1 The needfor an integratedmulti-modalapproach Typically there was an over-reliance on roads with little systematic planning and appreciation for integrated solutions consisting o f traffic management, facilities for pedestrians and cyclists, public transport, improved road maintenance and financing, and supporting institutional structure. The key challenge for the Bank team was to work with municipal authorities to broaden the scope o f client-identifiedinvestments to include other dimensions that can address the traffic congestion problem that the Bank would consider sustainable. Duringthe preparation phase the initialrequest for a set o froadschemes has beentransformedinto a truly integrated project with two process innovations for China: the development o f strategy and the public transport reform. 3.2 Participationof decision makers The mayor and the directors o fthe major government agencies concernedhave a very important decision making role inany urban transport project. Therefore one o f the main tasks for the Bank has been to gain the support o f municipal government, especially the key decision makers. InWuhan, the Bank was able to persuade WMG to appoint a Vice-Mayor to lead the transport strategy development effort. This has been crucial ingetting buy-infrom the city on the planning process and its outputs. 3.3 Participationof agencieswith a stake in urban transport The key to developing a balanced and sustainable project is the active participation o f all institutions responsible for urbantransport. The level o f institutional participation inWuhan was exemplary throughout the project preparation phase. Infact, the degree o f institutional involvement and commitment was higher inWuhan than inprojects elsewhere. 3.4 Managerialandtechnicalcapacitybuilding ofmunicipalstaff There was a need to complement the high level o f technical knowledge demonstrated by the local team in Wuhanwith practical experience. The Bank team facilitated the provision o f hands-on advice and support from seasoned professionals inthe preparation stage to empower the local professionals. This effort has beenvery successful and has resulted inthe development and gradual acceptance o f the transport strategy. 3.5 Focus on key processinnovationoutcomes An integratedproject with multi-components (inthe case o fWUTP components such as roaddevelopment, public transport, traffic management, road safety, road maintenance, environment, and institution building) runsthe riskofrunninginto management difficulties duringits implementation. The proposedproject would therefore focus on key issues o f developing a viable transport strategy andpromoting reforms inthe delivery o f public transport inWuhan. 3.6 Traffic management The traffic police, responsible for traffic operations and enforcement, often have limited experience and appreciation o f comprehensive traffic management. The Bank's past experience with transport projects indicates the need to integrate traffic management with project sponsored investments inArea Traffic - 1 5 -  Control (ATC) systems inorder to obtain the interest and buy-ino f the traffic police. Inthis project, the traffic police have demonstrated a good level of knowledge o f traffic management, and hence the project focuses more on buildingownership and coordination during implementation. The project component supporting ATC systems has the most substantive and detailed traffic management plans of any Bank-funded urbantransport project inChina. 3.7 Unprecedentedmotorizationrate The current motorization rates inChinese cities are higher than rates elsewhere inthe world. Previous projects have found their forecasts to be overly conservative. Similarly, earlier projects found that they underestimated bicycle traffic volumes. Experience indicates that NMT increases with a city's growth. The forecasts o f traffic used for this project, reflect the overall trend inChina. 3.8 Appreciation for rail over bustransport solutions An interest inpublic transport oftentakes the form o f investments inrail. The Bank, however, helpsto focus attention o n bus system improvements, bus priority measures and busways. This project would aim to demonstrate the benefit o f considering both rail-based and bus-based mass transit solutions. 3.9 Ownershipof reformagenda Reform o f municipal services remains an important issue on the government agenda. Butthe pace o f reform is govemed by local agencies and national political conditions. The Bank can only encourage reform measures that have worked elsewhere, while the client should be willing to seek Bank assistance for its implementation. The Bank i s encouraging the reform o f public transport in Wuhan. 4. Indicationsof borrower commitment and ownership: There is little doubt that the borrower is committed to the success o f the Bank project ingeneral. At both the provincial and city levels, groups comprising o f senior government officials have been established to facilitate coordination for this project. There is also a clear indication o f borrower commitment to, and ownership of, both the physical and institutional elements o f the project. All the major physical investment components have been proposed by the WMG. As stated earlier, the level o f engagemenu initiative shown by the counterpart inthe design o f the traffic management component has been exemplary. Inthe case o f the institutional components, the borrower has proposed the public transport reform component andthe Bank's role has been one o f adviser and facilitator. Inthe case o f the integrated transport strategy, WMG has shown a highlevel o f commitment and ownership by creating a project office with staff from all concemed agencies. The project office has undertaken a considerable amount o f analytical and design work for the project with limited help from local consultants. The best indicator o f WMG's ownership o f the transport strategy development process has been their decision to drop plans to construct an eastern leg o fthe middle ringroad, which was at one time a major part o f the road component, based on the results from the network analysis. 5. Value added of Banksupport inthis project: Ingeneral, the Bank's value-added support inany urbantransport project is that o fpromoting a comprehensive approach to finding solutions based on the best practice experience inChina and elsewhere. This advice also reflects the Bank's recently completed review o f Urban Transport. Moreover, the Bank will demonstrate the benefits ofparticipatory planning and budgetingprocesses, and the use of methodologies for prioritization o f policies, programs and investments. The project provided all concemed agencies the opportunity to jointly find solutions to any issues. Bank involvement will improve the - 1 6 -  institutional capacity, managerial and technical abilities inall concerned agencies, and further their practical experience. This directly strengthens municipal management and improves service delivery. Bank involvement also provides access to low-cost finance. It helps the government to provide more support to lower income groups by developing surveys, which provide data on their needs. It also assists the sectoral reform process, includingthe introduction o fprivate sector participationinservice delivery. E. Summary ProjectAnalysis (Detailed assessmentsare inthe project file, see Annex 8) 1. Economic(see Annex 4): 0 Costbenefit NPV=US$706 million; ERR = 23 % (see Annex 4) 0 Costeffectiveness 0 Other(specify) Economic analysis was carried out first for the evaluation o f altemative transport development programs, and then for the evaluation o f the proposed project. Duringthe transport strategic planning process, four altemative development programs up to year 2007 were tested using a travel demand model calibrated with local data. These alternatives included (i) do-minimum; (ii) management oriented program; (iii) traffic public transit oriented program including mass rail transit; and (iv) road transport oriented program. By comparing alternative terms o f traffic performance, investment costs, and economic rate o f return, a preferred program was subsequently formulated. A budget-constrained investment program for the period 2003-07 was identified. The Bank funded project was defined from this program. A cost-benefit analysis was undertakento evaluate the components o fthe proposedBank project. The quantified network benefits included savings inpersonal travel time and vehicle operating costs, and overall reductions intraffic accidents. These benefits represent the majority o f the total project benefits, andwere estimated usingthe travel demand model developed for Wuhan. The ERR was calculated based on savings inpersonal travel time and vehicle operating costs against the total project costs. The ERR, under the most likely traffic growth scenario, is 19 percent. Sensitivity tests were performedusing altemative traffic growth rates, likely cost overruns, likely benefit reductions, or a combination o f all these. The test results suggest that the project economic viability is robust. Moreover, the review o f benefit distribution among different income groups shows that all modes will benefit from the project. Pedestrians and bicyclists will be the prime recipients o f the safety benefits realized from the traffic management component o f the project. 2. Financial(see Annex 4 and Annex 5): NPV=US$ million; FRR= % (see Annex 4) Fiscal Impact: MunicipalFinance. The analysis has focused on two aspects: (a) the municipal financial capacity to provide funds for the Wuhan Urban Transport Strategy (WUTS), and (b) the counterpart funds for the project. 2.1 Municipalfinancial capacity. The task team has conducted a detailed assessment o f municipal financial capacity. The scope of the assessment included the current and projected fiscal income and expenditure, urban infrastructure revenue and expenditure, andthe capacity remaining for capital investment outside the Bank project. The municipal financial ability o f Wuhan is ranked inthe middle o f the range when compared with similar size cities inChina. The revenue available to Wuhan municipality was RMB 10 billion in2002 (see details inAnnex 5). Like other Chinese cities, the municipality has - 17-  adopted an approach o f balancing expenditure on urban infrastructure with revenue from in-budget and extra-budget sources. The municipality first uses the overall infrastructure revenues to pay for routine urban infrastructure expenditures, and then allocates the remaining funds for major capital investment. The capital investment funding for the municipality is FZMB 1.24 billion in2003. 2.2 Municipal capital investment capacity. Duringthe early stages o f the Wuhan Urban Transport Strategy Study, the municipality proposed a very ambitious investment plan to improve the urban transport system inWuhan. However, this plan far exceeded the municipal financial capacity. The local planning team, with the help o f the Bank team, prioritized the list o f proposals inthe urbantransport infrastructure investment plan, keeping inmindthe given municipal financial constraints and the needs o f different road users, especially the lower income groups. More importantly, the joint team explained the financially constrained situation to the municipal decision makers, and obtained their agreement to use the limited funds to provide services to solve the major urban transport problems identified inthe WUTS. Other than the Bank urban transport project, the municipal government is proposing a Metro Line 1 (phases Iand II), a cross river tunnel, and a waste water plant project (financed by ADB) as the major capital investments for the next five years (see details inAnnex 5). 2.3 Counterpartfunding arrangement. The project counterpart funds will absorb more than two thirds o f the city's capital investment capacity inthe first two years. Inorder to increase their financial capability, the municipality has decided to use domestic bank loans for the counterpart funding. Two third o f the counterpart funds will come from domestic bank loans and the rest from normal municipal capital investment funds. (The municipal government has provided the Bank with all signed lending agreements and a repayment plan for the domestic Bank loans.) The municipal counterpart funds will come from four extra -budgetary sources: (i) landreservation surcharge, (ii) vehicle testingfees, (iii) annual transport construction surcharge (which will be collected from hotel guests), and (iv) parking fees. The task team has reviewedthe details o f each source and determined that the sources and the projectedfuture volumes o f funds are reasonable and that the funds will be collected. The task team has receivedthe copies o fthe government confirmation letters to these four revenue sources. Therefore, the counterpart funding requirements, including interest during construction and commitment fee and the interest for the domestic bank loan, are well withinthe generally accepted limits o f affordability for the municipality. 2.4 Public Transport Financial Review. This review was undertaken to determine the financial sustainability o f the current system and financial issues to be monitored inconnection with the institutional reform o f public transport. Although, the public transport companies have been runningsome losses, the government intentionwas to provide no subsidy to bus companies in 2003. The government proposes to address the issue o f operational losses duringthe reform o f this sector. This is one o f the topics that will be discussed during the course o f the PT sector reform. Usingdata provided by the companies, a 5-year baseline financial projection shows (usingreasonable assumptions on patronage growth, fare increases and staff reductions), that the companies can achieve full cost recovery within the life o f the project. This analysis has improved the understanding o f the financial situation for the public transport sector inWuhan, and the need for further reform. Further details are provided inAnnex 5. - 18-  3. Technical: The Bank team conducted a thorough technical assessmento f the proposals for each component o f the project as summarized below by component: 3.1 Strategy and Policy Urban transport strategy Development o f a network analysis tool, which integrated data from several existing databases (census, OD household survey, motor vehicle OD data, bicycle and taxi-use data, bus passenger data) and facilitated extensive analysis feeding into the urban transport strategy. Ongoing development o f an integrated urban transport strategy that reflects extensive analysis o f different infrastructure investments (such as road investments, investments in bus priority lanes and other passenger transport investments) ina comprehensive benefit-cost framework. Ongoing analysis to integrate the schemes funded under the Bank project with other investments made by WMG both duringthe project period (through 2007) and later. Introducing the concept o f continuous planning and the possibility o f (and benefits from) revisiting the 2020 Master Plan in light o f changed situations, priorities and actual demand. Further refinement o f the urban transport strategy, including coordination o f traffic management strategy with overall strategy, formulation o f parkingpolicy, and formulation o f public transport priority. Maximizing the benej?tsto thepoor An ongoing study o fthe travel needs o f low income groups andthe vulnerable inWuhan will (i) determine potential impact o f the project on vulnerable groups(the poor, women and recent migrants), and (ii) identify measures that would maximize net benefits for the vulnerable groups. 3.2 Road Network (i) Development o f a functional road hierarchy. (ii) Selection, justification, design and timingo f new road construction schemes based on project objectives and traffic demand. Analysis o f all suggested road schemes proposed for the Bank project using the WUTS planning process (see Annex 14). (iii) Integration o f landacquisition, resettlement and service diversions into costs and implementation schedules. 3.3 Traffic Management (i) Physicaljunctionchannelizationdesign. (ii) Specificationand design o f the Area Traffic Control System. (iii) Design and management o f facilities for pedestrians and cyclists. (iv) Requirements for appropriate parking standards, regulations and measures to implement parkingpolicy. (v) Justification, location and design o f public transport priority measures. 3.4 Public Transport (i) Ongoing analysis o f reform proposals for public transport including the separation o f govemment functions (for strategic planning, pricing and subsidies, regulation and modal integration) from enterprise functions (for operations and business planning), restructuring - 19-  o f current PT enterprises, introduction o f competitive tendering for service delivery and introduction o f more private sector or joint venture operators. (ii) Operational analysis o f bus operators, leading to proposals for development o f Comprehensive Five Year Plans focusing on route development programs, new bus requirements, depot and terminus requirements, passenger and revenue forecasts, capital andoperating cost forecasts and assessmentso fthe overall financial position. (iii) Analysis o f proposals for interchanges, termini and busbays. (iv) Analysis o f the potential for bus priority measures and busways. ' 4. Institutional: 4.1 Executing agencies: Wuhan Municipal Government is the executing agency for the project. Through most o f its preparation, the project was managed by the Wuhan Construction Commission on behalf o f WMG. For the completion o f preparation and for implementation, the project will be managed, on behalf o f WMG, by the Wuhan Municipal Capital Investment Management Office (WMCIMO). The project office (WUTPO) will be retained. As its name implies, W M C I M O would be expected to focus on the investment aspects o f the project. Based on experience with other projects, it will be particularly important to ensure that the project management arrangements facilitate the dialogue o n WUTS andUT policy between the Bank and Wuhan Planning Bureau and on P T reform between the Bank andWTC. These details were discussed at appraisal, are to be included inthe PIP and monitored during the project implementation. 4.2 Project management: WUTPO, which has successfully managed project preparation to date, needs to be expanded to ensure smooth implementation o f this large project more efficiently. The coordination ability o f WUTPO will also needto be strengthened. The same agencies, which successfully prepared the various components, will be managing their implementation. The implementation capabilities o f these implementing agencies will also need to be strengthened. 4.3 Procurement issues: A procurement assessmenthas beencarried out, which is summarized inAnnex 6. This assessment concluded that the procurement risk is average. The assessment found that although the proposed arrangements for managing the procurement function are appropriate, the procurement staff needed more training, especially those inthe implementation agencies for the various components. Therefore, a training program was provided prior to the start o f project implementation to ensure that all relevant staff are fully conversant with the Bank's guidelines and procedures. Further training can be provided as necessary duringimplementation. 4.4 Financial management issues: A financial management assessment was carried out which is summarized in Annex 6. The project will produce project financial statements on a semi-annual basis, including Balance Sheet, Summary o f Sources and Uses o f Funds by Project Component, Statement o f Implementation o f Loan Agreement, and Statement o f Special Account. The project will use reports of the standard format agreed between the Bank and MOF. Retroactive financing in an aggregate amount not exceeding $15,000,000 will be provided to finance some civil works, consultants and equipment undertaken after June 16, 2003. Audit arrangements will follow the new Bankprocedures. - 20 -  5. Environmental: Environmental Category: A (Full Assessment) 5.1 Summarize the steps undertaken for environmental assessment and EMP preparation (including consultation and disclosure) and the significant issues and their treatment emerging from this analysis. The project complies with the requirements o f O.P.4.01. The project is classified as EA Category `A'since it involves involuntary resettlement, major roadconstruction (partly onnew alignments) andincreased air pollution and noise, particularly adjacent to new roads. A comprehensive environmental assessmenthas been carried outjointly byNumber Four Survey & Design Institute o f China Railways Ministryand Wuhan Research Academy o f Environmental Sciences in accordance with the policies andprocedures of China and the Bank (see Annex 11). The Bank reviewed and commented on the EA report and the E M P at various stages o f preparation. The revisedreports meet the Bank's requirements. The projected increase invehicles and motorized travel (with or without the project) will tend to increase local and global air pollution unless appropriate mitigation measures (not directly associated with the project) are introduced. Air pollution, noise, traffic management and safety, will be o f concern during both the construction and operational phases. Constructiono f new roads inthe project will also produce environmental impacts including dust, waste management and disposal, water pollution and erosion during the construction phase, which will needto be mitigated. Road construction will also cause resettlement. However, the proposedroadnetwork andtraffic management components are also expected to have positive environmental impacts as they are designed to reduce traffic accidents, reduce personal time spent traveling, vehicle idling time and overall traffic congestion, though air pollution may increase in some localized areas. The public transport component will also have a positive effect on the environment by slowing the growth o f motorized private vehicle use. Environmental institutions will be strengthened through environmental monitoring equipment upgrading, staff training, and formulation o f a vehicle emission control strategy. 5.2 What are the main features of the E M P and are they adequate? As part o f the EA process, a separate E M P has been prepared. The E M P includes: mitigationmeasures, an environmental monitoring plan, environmental monitoring supervision plan, institutional arrangements, a training plan and estimated costs for all environment related activities. It provides for the inclusion o f environmental protection inthe design, construction and operational phases. Design phase. Mitigation measures included inthe project design include additional facilities for noise barriers, double-glazing and air conditioners to mitigate noise impacts at sensitive sites, and plantingalong the proposed project roads. Project designs have been reviewed to ensure the careful positioning o f facilities with appropriate landscaping and buffer zones to control noise and to mitigate the impact o f increasedvehicle emissions adjacent to the new roads and to reduce severance. Constructionphase. Duringconstruction, measures will be introduced to limit noise, dust and other impacts o f construction. Full time environmental management staff will be assigned at each construction site. Training will be provided to them. Ifconstruction at night i s unavoidable, then the contractors will be required to give advance notice to all affected residents, and to undertake additional monitoring and mitigation measures. -21 -  Operational phase. The project also includes a component for the settingup automatic monitoring sub-stations for air quality and noise and development o f a vehicle emission control program. 5.3 For Category A and B projects, timeline and status o f EA: Date o f receipt o f final draft: June 2003 (Draft dated M a y 2003) The Bank has received and reviewed several drafts o f the EA, EA Summary and EMP reports. The State Environmental ProtectionAdministration (SEPA) reviewed and cleared the final draft EA (dated May 2003) in late July 2003. The final draft EMP was updated and received inAugust 2003. The final draft EA Summary (dated September 2003) was received on October 15,2003. Copies of drafts o f all documents have been successively disclosed inWuhan inChinese and in Englishinthe Bank's Public Information Center inWashington, starting with the first draft EA inFebruary 2003. The Englishversions o f the documents have been disclosed inBank's Beijing Office since June 12,2003. 5.4 H o w have stakeholders been consulted at the stage o f (a) environniental screening and (b) draft EA report on the environmental impacts and proposed environment management plan'? Describe mechanisms o f consultation that were used and which groups were consulted? Key stakeholders include the Wuhan Construction Commission, Wuhan Environmental Protection Bureau, local communities and governments, project affected peopleh-esidents along the proposed new roads, bus passengers, and local NGOs. The public consultation on the EA has involvedthese groups. Public and stakeholder consultations were carried out inthree stages: Thefirst stage consultation was conducted between September 4th and 7th, 2002 when the TOR for the EA was prepared. There was a notice on September 5th, 2002 intwo local newspapers (the Wuhan Evening News andthe Changjiang Daily) detailing the locations and agendas for the public meetings related to this consultation. Participants were representatives o f project affected people who live inthe areas around the proposed project roads. A summary o f the project andkey EA information was announced on September 9th on Wuhan communications radio. Thesecond stage consultation was carried out betweenDecember 26th and 29th 2002, indifferent locations through means o f meetings and interviews with project-affected people and interested groups, when the first EA report was compiled. The public was notified o f the location and agenda for this second round o f consultations by way o f announcements on December 28th on Wuhan's TV stations and inthe December 29th edition o f the Wuhan Evening News. The third stage consultation was conducted from March 26th to April 10th ,2003, at the review stage o f the draft EA report. As with the other two stages, consultation was carried out in different locations and a variety o f techniques have been used including site visits, public surveys and interviews with project-affected persons and groups. Duringthe consultations, the consulted groups were advised o f the EA revisions and were given feedback on the solutions to their concerns. The public was notified o f the thirdround o f consultations through an announcement inthe Feb 19,2003 edition o f the Wuhan EveningNews. Inall stages, local communities were consultedthrough (i) meetings with representatives o f project-affected people from areas o f project roads; (ii) meetings with neighborhood committee, representatives o f local district government and deputies o f the local People's Congress; and (iii) public opinion questionnaires supplemented by interviews. Inall, over 3,500 people participated in the consultation process. - 22 -  The first draft o f the EA report and the E M P were placed inthe Wuhan public library, the offices o f the WuhanAcademy of EnvironmentalSciences andthe offices o fthe FourthRailway Design Institute on February 18th2003. Subsequent drafts o f these documents were placed at the same locations. Drafts o f the EAandEMP documents were initially disclosed inthe Bank's Infoshop inWashington onFebruary 18th 2003. 5.5 What mechanisms have been established to monitor and evaluate the impact o f the project on the environment? D o the indicators reflect the objectives and results o f the EMP'? A contract will be signedwith a qualified firm or institute to monitor the environmental impacts o fthe project both duringconstruction and after the project is operational. Appropriate monitoring indicators have been chosen to measure air quality and noise impacts duringconstruction and operation. 6. Social: 6.1 Summarize key social issues relevant to the project objectives, and specify the project's social development outcomes. Improvements to transport services for low-income residents are implicit inthe project development objectives. This will be achieved mainly through the improvements to pedestrian facilities (footways, pedestrian crossings etc), creation of NMV routes and bus service improvements. The road safety program aims to reduce accidents and casualties, which tend to involve poorer residents. As stated earlier, the Bank team has also conducted a survey o f the travel needs o f vulnerable people inWuhan to help refine elements o f the project investments such that the benefit for the poor is maximized. OP. 4.12 on Involuntary Resettlement applies to this project. The project complies with the requirements o f OP 4.12. The road network and public transport components o f the project are expected to require land acquisition. The road network schemes inthe project were chosen after comparing several alternatives with a view to minimizing resettlement and adverse impacts. The Project Office undertook baseline social analyses and resettlement planning studies to show how incomes and living standards will be improved, or at least restored, for all persons adversely affected by the project. A Resettlement Action Plan (RAP) has been prepared by the borrower. Final designs for schemes to be undertaken inthe public transport component will not be available untilthe project is under implementation. Civil works associated with the public transport component are scheduled to occur inthe thirdyear o f implementation. Because it is impossible to prepare a fully-specified RAP for this component prior to appraisal, the Project Office will prepare a separate resettlement implementation plan consistent with RAP principles and standards for Bank review and acceptance prior to the thirdyear o f implementation. Annex 12 reviews adverse impacts related to land acquisition or changes in land use for the project, and summarizes the measures included inthe RAP for mitigating them. Related public consultation and disclosure activities are also summarized inthe same Annex. The road network component involves works scattered throughout the city, with 62 urban residential community committees and48 suburban villages affected invaryingdegrees by land acquisition and structural demolition. Inall, 176 hectares o f collective-owned land will be acquired invillage areas. Housing demolition will require relocation o f 1164 urban households and 1064 suburban households. Other significant impacts include relocation o f shops, enterprises and public institutions. Of the collective land to be acquired, about 124 hectares is cultivated with the remainder used for house plots or other purposes. Most suburban villagers, however, derive relatively little or no income from agricultural production. Land compensation will be based on the highest average annual output value per mu among the same land inthe affected municipal districts. Ineach case, compensation rates meet or exceed legal requirements and meet or exceedreplacement cost valuation. Villagers themselves decide on appropriate rehabilitation measures for collective members, which typically includes redistributiono f remaining land - 23 -  andcollective investment o fland compensation. Insome cases, those affected opt to receive a cash resettlement subsidy and relinquish collective membership infavor o f urban residency. Compensation rates for demolished structures are based on replacement cost for the structure itself and a supplemental zonal valuation. Compensation rates for illegal structures are based o n replacement cost for the structure, but do not include the supplemental zone valuation. The RAP includes several features that go well beyondminimumresettlement requirements. Among them: special arrangements for poor and vulnerable households to obtain subsidized rental apartments or to obtain discounts and subsidies on purchase o f replacement housing, and a scheme to provide households losing very small residential units with additional compensation so they may purchase replacement housing meeting community minimum size standards. Based on preliminary estimates, the public transport component is likely to include acquisition o f about nine hectares o f collective-owned land and to require relocation o f about twenty households, scattered among four suburban villages. The Bank policy relative to indigenous people (OD 4.20) does not apply and an IPDP is not required. The social assessmentand socio-economic survey found that there are no ethnic minority communities inthe project area. 6.2 Participatory Approach: H o w are key stakeholders participating in the project? All affectedhouseholds andvillages were identifiedthrough a socio-economic census. Additional details regarding sources of income and local living standards were obtained through a baseline survey and through the social assessment process. Project informationwas provided to the affected households and villages, and municipal district governments through newspaper, posters and public meetings. The draft version o f the RAP was advertised on Feb. 17,2003 inthe Wuhan Daily, and placed inthe Hubei Provincial Library and the Wuhan Municipal Library. Subsequent drafts o f the RAP were placed at the same locations An extensive public consultation process, including focus group discussions and key informant interviews, was designed as part o f a two-stage consultation strategy (concurrently with public consultations related to the environmental assessment) to disseminate project information, collect people's concerns, needs and recommendations, and consult the affected people about the resettlement and rehabilitation strategy. Particular attention was devoted to the low-income residents and vulnerable group o f people duringthe consultation process to ensure that the information dissemination methods were appropriate and adequate. Information dissemination and consultations are designed to continue during the project implementation. A resettlement informationbooklet, including detailed entitlements o feachhousehold, compensation and entitlement policies and grievance procedures will be prepared and distributedto the displaced people prior to the resettlement implementation. Displaced communities will play a key role infinalizing and implementing their livelihood restoration programs. 6.3 How does the project involve consultations or collaboration with NGOs or other civil society organizations'? The PopulationResearch Institute o f Wuhan University was contracted to head the social assessment exercise. This has contributed significantly to the preparation o f the RAP. Residential committees and village committees have also been consulted with and participated inthe resettlement planning process and the preparation o f the project. - 24 -  6.4 What institutional arrangements have beenprovided to ensure the project achieves its social development outcomes'? The institutional arrangements for resettlement implementation are detailed inthe RAP. The Population Research Institute of Wuhan University, independent from the provincialand municipal government and the project management office, will be contracted to serve as the independentmonitoring agency o f the resettlement program. The project will be monitored and the living standards o f the PAPSwill be evaluated over the course o f the project implementation. The monitoring results will be regularly reported and, ifneeded, remedial actions will be designed, 6.5 How will the project monitor performance interms of social developmentoutcomes? Bothinternal and independentexternalmonitoring of the resettlement programwill be conductedregularly during project implementation. The PopulationResearchInstitute inWuhanUniversity will carry out independentmonitoring every six months. Apart from physicalprogress, this review will evaluate livelihoodrestorationefforts and their effectiveness. The RAP describes indetail the purpose of monitoring, responsibilities,indicators, methodology, procedures andreporting requirements. 7. SafeguardPolicies: 7.2 Describeprovisions made by the project to ensure compliance with applicable safeguardpolicies. Sections E5 & E 6 describe provisionsmade to ensure compliancewith OP 4.01and OP 4.12. The draft EA andRAP were first disclosedinthe Infoshop inWashington on February 18,2003. - 25 -  F. Sustainability and Risks 1. Sustainability: Sustainability has environmental, social, financial and economic dimensions. Socially sustainable development o f the transport system inWuhan requires a policy and institutionalframework for effective handlingofresettlement. The project aims to leavebehindthe institutionalcapacity, and an efficient delivery mechanism to address the adverse social impacts associated with urban infrastructure projects. It also requires that policies be designed to benefit all transport users, particularly the socially disadvantaged and notjust those with access to motor vehicles. The surveys o f the disadvantaged groups undertaken duringproject preparation are being usedinthe design andrefinement of service delivery. The project places emphasis on providing for the continuation of these surveys as a means o f determining the needs o f the disadvantaged. The environmental sustainability o f the project is dependent on the extent to which the overall level o f local and global emissions due to increasing travel demand is monitored, contained or reduced. A Motor Vehicle Emission Control Strategy is designed to do this. The sustainability o f the physical assets is feasible. However, adequate resources for operating the system, for maintenance and replacement o f assets, and for increasing capacity inresponse to user demands remain the most important consideration. For the bus system, reform measures discussed to date are designed to reduce costs, eliminate subsidies and introduce competition. If successful, they will ensure the long-term sustainability o f the system. Ifduring the project these reform measures are found to be inadequate, other regulatory and competition possibilities will be suggested. For the maintenance o f roads and traffic management, measures are requiredto improve management o f existing funds, ensuring provisioning inthe budgets andpossibly increases inuser charges. These aspects will be reviewed inthe continuing work on the transport strategy. The institutions responsible for construction o f roads, and traffic management are already experienced and fully effective. The staff o f the agencies responsible for planning andprogramming o f transport investments, and bus service delivery are capable but need more hands-on experience, while the institutions themselves inwhich they work require strengthening. These aspects will be addressed during the implementationo f the project. There is a risk that some o f the policy prescriptions underpinning sustainability will not be followed inthe medium to long term. The risks are being mitigated by very close cooperation and extensive discussions betweenthe Bank and the Municipality duringpreparation. This cooperation is coupled with the extensive use o f local staff and consultants, with a thorough knowledge o f Chinese conditions, working inpartnership and adapting policy solutions that have beenwell tested around the world for the Chinese environment. 2. Critical Risks (reflecting the failure o f critical assumptions found inthe fourth column o f Annex 1): Risk I Risk Rating I Risk Mitigation Measure From Outputs to Objective The Municipality does not continue to S This is a real risk given the greater emphasis in maintain or manage the new road space to China on construction. Further development o f makemost efficient use o fit WUTS throughout the project to mainstream road maintenance and traffic management policies, programs and budgets, coupled with an annual review o f maintenance budgets should help change this emphasis. - 26 -  nitial adverse public reactionto the M Wunicipality and the traffic police are aware o f mplementation o f traffic management :he importance o f public consultation and have a TM) measures. zood record, which is expected to continue, :specially with continuedBank support and idvice duringproject implementation. 'he traffic police do not enforce traffic M The measures are designed to the extent possible nanagement measures. :o be self enforcing, and the police are :ommitted to them. Continued Bank support mdadvice should sustainthat commitment. 3us operators take no steps to address M rhere are a number o f measures inthe project to ither operational inefficiencies such as w i s t operators address these issues (including lunching at bus-stops, to maximize the CMIS, reconstructiono f stops and TA from iotential o f bus lanes. local and international experts). There is also pressure from the Municipality to reduce costs and improve services. NMG fails to give adequate policy M Further development o f WUTS throughout the upport to bus priority. project to reinforce the need for such policies, coupled with study tours to help WMG decision makers understand how the policies can be implemented, and TA support for the careful preparation o f good quality schemes. :he bus operators do not take advantage M Staff reduction has been limitedto date inbus ifITto reduce staff, retrainstaff improve operators inChina. Bank agreement to nanagement, and operational procurement o f the Stage 1IT equipment will be n-oductivity linked to a time based action planfor training andefficiency measures, and for Stage 2 equipment to progress inimplementingthe action plan. TA support is also provided for the formulation o f business plans. The Municipality wishes to reduce subsidy, which puts pressure o n operators to reduce costs. lata generated by expanded M Bank agreement to investments inMVECS to be :nvironmental monitoring system is not linked to use o f this data and regular reporting. ised by municipal leaders to make more nformed decisions on mitigation measures ?rainedstaff do not stay in respective S Use o f appropriate criteria inthe selection o f n i t s for at least the life o f the project appropriate staff for training. Zonsultant services do not transfer M Discussion with implementing agencies to agree nowledge andtechnology, and facilitate on the technical areas where such transfer is he adoption o f intemational best practice most useful, coupled with rigorous application - 27 -  )fconsultantselection andmonitoring of :onsultant performance From Components to Outputs Prior to commencing civil works, required S ipproval o f civil works contracts only given land acquisition, resettlement andservice vhen these activities are completed diversions are not planned, budgeted and implementedcausing project delays. Additional schemes are not selected by WMGusingWUTS WPSB leadership and cooperation S zreation o f a formal coordination group headed between the various stakeholders o f the )y senior WMG leaders. project on TM does not continue The municipality does not implement the M b u a l review o f the project and linkage o f emission control strategy nvestments inthe environment component to rogress inMVECS. The Government o f China s putting great emphasis on improving air iuality incities. Cooperation between the various S :reation o f a formal coordination group headed stakeholders o f the project on the MVECS iy senior WMG leader does not continue and leadership by WEPB abates Project Office has inadequate staff, skills M 4greements to be reached at negotiations. Loan and authority to manage the overall :ovenant. Monitoring and remedial action by project 3ank supervision missions Overall Risk Rating M Risk Rating - H (High Risk), S (Substantial Ri: , M (Modest Risk), FNegligibleor Low Risk) M 3. PossibleControversialAspects: None identified G. Main Loan Conditions 1. EffectivenessCondition Standard conditions o f effectiveness - 28 -  2. Other [classify according to covenant types used in the Legal Agreements.] 2.1 AccountsIAudit 2.1.1 Wuhan shall have the records, accounts and financial statements for each fiscal year audited, in accordance with consistently applied auditing standardsacceptable to the Bank, by independent auditors acceptable to the Bank. 2.1.2 Wuhan shall hmishto the Banknot later than six months after the end o f each such year (A) certified copies of the audited financial statements and (B) an opinion on such statements by said auditors, inscope anddetail satisfactory to the Bank. 2.2 Monitoring, Review,and Reporting 2.2.1 Wuhan shall prepare reports each calendar semester, on the physical progress of implementation and the status o f procurement and hmishthemto the Bank within 30 days o f the endo f each semester, starting July 31, 2004. 2.2.2 Wuhan shall prepare annual reports by February 15 each year, starting on February 15,2005 on the progress achieved inthe preceding year andthe proposals for the next year. 2.2.3 The midterm review for the Project shall be not later thanMay 31, 2006. 2.3 Implementation. 2.3.1 Overall (i) Wuhan shall maintain untilcompletion of the Project the Municipal Project Leading Group, with terms o f reference acceptable to the Bank, and responsible for the coordinationamong all municipal entities inregardto the implementationo f the Project. (ii) Wuhan shall maintain throughout the life o f the project, a Project Office with units responsible for landacquisitionandresettlement, environmental management, procurement, financial management, construction management, project management and monitoring and reporting, to be adequately resourced with suitablyqualified staff. (iii) Wuhanshall, not later than November 30 ineachyear, commencingNovember 30,2004, and untilcompletion o f the Project, prepare and hmishto the Bank for comments, a proposed annual work program and budget for the Project for the next Fiscal Year, and thereafter implementsuch work program as shall have beenagreedwith the Bank. (iv) The Construction Supervision team employed to assist inthe supervision of the civil works construction shall remain inplace duringthe entire implementationperiod. 2.3.2 Road Network Development Component (i) Wuhanshall not make any changes to the agreed programexcept if such change is compatible with the Wuhan Urban Transport Strategy and a full feasibility study, acceptable to the Bank, i s carried out. (ii) Wuhan shall carry out the EMPs, RAPSand the RPF, in a manner satisfactory to the Bank, inparticular: (a) Prior to commencing any work not included inthe RAP, prepare a RAP in accordance with the RPF. - 29 -  (b) Prior to commencing any work not included inthe EMP, prepare an EMP satisfactory to the Bank. 2.3.3 Road Maintenance Component Wuhan shall (i) implement the road maintenance management system by December 31,2006. (ii) review with the Bank the progress on the reform o f the road maintenance functions, by March 31ineach year, commencing March 31,2005, anduntilcompletion o f the Project. (iii) review with the Bank the maintenance performance and expenditures against the budget for the previous year and the previsions for the forthcoming year, by March 31ineach year, commencing March 31,2005, anduntilthe completion o f the Project. 2.3.4 Public Transport Component (i) Wuhan shall review with the Bank the progress o fthe Wuhan public transport reform by March 31 ineach year, commencing March 31,2005, anduntilcompletion o f the Project. (ii) PT companies to fumish through the Wuhan Public Transport General Company, for review a rolling five-year development plan by March 31ineach year, commencing March 31,2005, and untilcompletion o f the Project, and thento implement such plan. 2.3.5 Technical Assistance Component Wuhan shall review with the Bank at least once a year, and untilcompletion o f the Project, any developments inthe WuhanUrban Transport Strategy. carry out the training in accordance with a training program acceptable to the Bank; and review the training program with the Bank by March 31 in each year, commencing March 3 1,2005, and until completion o f the Project. carry out the studies agreedwith the Bank inaccordance with terms o f reference and a timetable acceptable to the Bank, fumish to the Bank the recommendations o f each o f the studies promptly upon completion o f the relevant study, prepare an action plan for each o f the studies to implement the recommendations, taking into account the comments ofthe Bank, ifany; and thereafter promptly implement such action plan. review with the Bank by March 31 in each year, commencing March 31,2006, and until completion o f the Project, the progress inthe implementation o f the recommendations o f the motor vehicle emission control strategy study. H. Readiness for Implementation 1. a) The engineering design documents for the first year's activities are complete and ready for the start o f project implementation. 0 1.b)Notapplicable. IxI2. The procurement documents for the first year's activities are complete andready for the start of project implementation. IxI3. The ProjectImplementationPlanhas beenappraisedandfoundto berealistic andofsatisfactory quality. 04. Thefollowingitemsarelackingandarediscussedunderloanconditions (SectionG): - 30 -  I. Compliancewith Bank Policies 1. This project complies with all applicable Bank policies. 0 2. ThefollowingexceptionstoBankpoliciesarerecommendedforapproval. Theprojectcomplieswith all other applicable Bank policies. EdwardDotson Team Leader Sector Dlrector -31 -  Annex 1: Project Design Summary CHINA: Wuhan Urban Transport Project Sector Indicators: Sector/ country reports: from Goal to Bank Mission) To support China's transition Measures o f Municipal Urban 3overnment and municipality inurbanizedindustrialized from Transport Services .eports iarket-oriented economy will (i)arural,agricultural pur more economic growth. society to an urban, industrial h e benefits o f growth will society, and :ach the poor both directly (ii)acentrallyplanned interms ofmore economy to a more globally pportunitiesthat improve integrated market-based ieir quality o f life) and economy idirectly (interms o f more :sources to provide a social afety net). Project Development Outcome I Impact 'roject reports: from Objective to Goal) Objective: Indicators: To promote development o f an integrated, efficient, and sustainable transport system for the rapid, safe and convenient movement o f people and goods in Wuhan 1. Support Investmentsin 1. Capacity and efficiency 4nnual progress reports .1 There are no significant transport infrastructureand 1.1 Reduction o f travel time Mid-termreview hanges in forecast rates o f services that address for motorized vehicle users on [mplementationCompletion nigration or motorization. current system efficiency, the key external/cross town Report capacity, safety and route from Automobile Town 4nnual municipal and State sustainability issues, and to Jianghan Roadfrom 49 -eports address the mobilityneeds minutes in2002 (baseline) to 4ccident Analysis Study of users. 43 minutes in 2008. Reports 1.2 Reduction o f travel time for motorized vehicle users on the key cross river route from Hankou Railway Station to Hongshan Square from 37 minutes in2002 (baseline) to 32 minutes in2008. 1.3 Reduction o f travel time For motorized vehicle users on :hekey central arearoute From Houhu to Wuhan Plaza From 26 minutes in 2002 'baseline) to 22 minutes in -008 - 32 -  1.4 Improvement inbus service productivity, with an increase in average daily ridership from 259 million in 2002 (baseline) to 310 million at endo f project (2008) 2. Mobility 2.1 Reduction o f travel times for pedestrians on key routes (i) KongRoadtoXan Hong LiMenfrom 68 minutesin 2002 (baseline) to 59 minutes in2008: (ii) Wulidunto Zhongdian Dunfrom 30 minutes in 2002 (baseline) to 26 minutes in 2008 2.2 Reduction o f travel times on for cyclists on key NMT routes: (i) Tiangjiadun to Riverside at Sanyang Road from 30 minutesin 2002 (baseline) to 22 minutes in 2008: (ii) Street to Yunlin Macao Roadfrom 20 minutes in2002 (baseline) to 15 minutes in2008 (iii) Riverside at Sanyang Roadto Wuhan Guan from 20 minutes in2002 (baseline) to 18 minutes in2008. 2.3 Reduction o ftravel times for bus users on key routes (i) Cross river from Hankou Railway Station to Hongshan Square from 48 minutes in 2002 (baseline) to 42 minutes in2008. (ii) central area In from Houhu to Wuhan Plaza from 34 minutes in 2002 (baseline) to 29 minutes in 2008 3. Sustainability 3.1 Production and i.1 TheMunicipalitybases implementation o f Annual naintenance budgets on road maintenance plans, ieeds identified by RMMS basedon application o f RMMS, by 2008. - 33 -  3.2 Formulation and adoption 3.2 The Municipality o f an effective motor vehicle :ontinues to regardreduction emissions control strategy to Ifemissions as apriority. reduce pollution due to motor vehicles, including a new I/M system by 2008. !. Supportformulationofa 2.1 Further detailed studies The Municipality continues to ransport strategy to guide recommended inthe WUTS use the transport strategy as a nvestment decisions Report to be completed by mid basis for decision making on term review in 2005. transport policies and 2.2 Transport Policy "White investments. Paper" to be preparedby 2008. 2.3 Investment program for five year period starting in 2008 finalized by 2008. L. Support for reformsto Busroute tendering on a The Municipality continues to mproveperformance of bus competitive basis completed support reform o f the public iervice delivery. across the bus system by 2008, transport system. Iutput from each Output Indicators: Project reports: (from Outputs to Objective) 2omponent: \. RoadNetwork. All components :arty-sevenroad schemesto All civil works contracts 1. Before and after The Municipality continues to a) provide alternatives for delivered at acceptable quality performance indicator surveys maintain and manage the new :xtemal or cross-town traffic within time, budget, cost and as work proceeds. road space to make most b) relieve cross river safety constraints. 2. Annual progress reports efficient use o f it. :ongestion 3. Mid-term review; c) relieve congestion in Implementation Completion :entral down-town areas Report d) provide for orderly :xpansion o f new growth ireas md e) 17 footbridges and iubways to provide safer :onditions for pedestrians and VMV TM. Traffic Management TM1. Pedestrianprogram TM1 i)Sixty-threemid-block (i)Mid-blocksignals ;he Municipality continues to iignalized pedestrian installed and functioning implementmeasures inface o xossings (ii)Cycletimesatallsignals any initial adverse public ii)Pedestrianphasesin at the 99 junctions revised reaction. raffic signals at 99 junctions. such that pedestrian phases iii)Onepedestrianstreet installed and functioning The traffic police enforce the (iii)Streetpedestrianized measures, particularly inthe period after initial - 34 -  implementation. TM2. NMVprogram TM2 50 km of NMV routes with V M V routes created with :ither MVINMV segregation Jartial or full segregation on 3r MV restrictions 11160km of roadway TM3. Buspriority I'M3 TM3BusOperatorstake steps measures Priority measures to prevent operational issues [i) 35km o f bus lanes on nine implementedand functioning such as bunching at bus stops routes 3n designated 35 kmnetwork which reduce effectiveness o f bus lanes. WMG Policy continues to give priority inthe allocation o f road space to buses. TM4. Junction TM4 channelizationand traffic (i) All civil works contracts facilities program delivered at acceptable quality (i)274junction within time, budget, cost and channelizations safety constraints. -46 physical; (ii)Nowideningofjunctions -228 with traffic facilities TM5. Area Traffic Control TM5. (ATC) and traffic signal (i)ATCsystemsandtraffic upgrading program signals installed and (i)ATCsystemsinstalledin functional Hanyang, East Lake Hi-Tech (ii)Signalsin zone, WuchanglQingshan communication with central I (ii)Trafficsignalsinstalled ATC and signal timing plans and upgraded integrated with existing (iii)Thirty-fiveCCTV signals real-time monitoring cameras (iii)CCTVinstalledand functioning in appropriate sites. (iv) VMS installed and functional. Systems installed to provide VMS with appropriate updated information. TM6 accident analysis program (ii)Allcivilworkscontracts (i)Enhancementoftraffic executed on time, within management information budget and at acceptable system quality (ii)Accidentblackspot (iii)Accidentinvestigation improvements: engineering equipment procured and traffic facilities at sixteen (iv) Systems establishedto blackspots and on thirty-two inform and collect fines from arterials -35 -  .ed-light offenders inlegally :iii)Trafficaccident qalid and acceptable manner. investigationequipment :iv) Thirty red-light violation :ameras rM7. Roadusereducation rM7. [RUE) program :i)Allcivilworkscontracts [i) Children's traffic Safety ielivered at acceptable quality Playground; nine associated within time, budget, cost and district education bases safety constraints. [ii) Public education :ii)Allpublicationsand billboards 3erformances designed, (iii) RUE Columns inlocal zxecuted and disseminated on newspapers schedule and inbudget (iv) RUE Helpline and website (v) Traffic TV program (vi) Traffic radio program (vii) Traffic safety pamphlets (viii) TM InformationMap TM8. Roadmarking TM8. equipment All equipment procured Four motorized and seven competitively: installed and hand-pulled vehicles. functional Selected TDM measures implemented after the TDM Study PT. PublicTransport: PT1. Information PT1. Computer systems 'Tl. Management System procuredcompetitively, :he bus operators take Computerizing basic tasks installed and functional. .dvantage o f IT to reduce currently done manually. Staff trained to use computer taff, retrain staff retained, systems. nanage more effectively and ncreaseproductivity PT2,PT3,PT4. Investments PT2, PT3, PT4 inphysicalinfrastructure All civil works contracts (i)Fourlong-distanceand delivered at acceptable quality seven city centre within time, budget, cost and interchanges. safety constraints. (ii)Reconstructionoftwelve termini (iii)Fourteenbus-bays - 36 -  RM. Road Maintenance: RM1. Reconstruction of ten RM1. All civil works existing roads contracts delivered at acceptable quality within time, budget, cost and safety constraints. RM2. Road maintenance equipment RM2. All equipment procured competitively, installed and functional. Staff trained to use. RM3. Road maintenance management information RM3. All computer systems system procured competitively: installed and functional. Staff trained to use. Data on road conditions collected and entered into system. EN. Environment. EN1. Vehicle emission and EN1. All computer systems 2N1. traffic noise monitoring and equipmentprocured lata generatedis usedby systems competitively: installed and nunicipal leaders to make (i) air quality monitoring functional. Staff trained to nore informed decisions on systems increased from five use. nitigationmeasures. to fifteen; (ii) two vehicle emission monitoring sub-stations, automatic computerization; monitoring equipment (iii) 7 noise monitoring sub-stations; and (iv) IT equipment EN2. Motor vehicle EN2. Motor vehicle emission emission control strategy control strategy (MVECS) (MVECS) developed and adopted for implementation. EN3. Noise mitigation EN3. Noise mitigation measures implemented EN4. Environmental eng EN4. EMP implemented. design and management Construction supervision and designs judged environmentally sustainable EN5 Environmental monitoring - 37 -  rA. Capacity building TAl, TA2. International TA1, TA 2. Study tours TA1, TA2 Trained staff stay and domestic training planned and executed on in respective units for at least schedule and in-budget the life of the project. rA3. Consultant services. TA3. All studies tendered TA3 Consultant services 3.1 Civil works supervision competitively and complete transfer knowledge and 3.2 High strength bituminous on time and within budget, technology, and facilitate the 2oncrete pavement study accomplishing scope o f work adoption o f intemational best 3.3 Roadsafety audit practice 3.4 Support for public transport reform 3.5 Other public transport related studies 3.6 Traffic management related studies 3.7 Studies related to environmental management 3.8 Road bridge and drainage management system 3.9 Wuhan Urban Transport Strategy (WUTS) 3.10 Financial management system analysis 3.11 Travel needs o f the low income and vulnerable groups TA4. Officeequipment -38-  DrojectComponents I nputs: (budget for each 'roject reports: [from Components to Sub-components: :omponent) Outputs) iN. RoadNetwork 161.3 ?orall components: Required land acquisition, Legular project management resettlement and service eports, including: diversions are planned, i)quarterly andannual budgeted and implemented. lrogress reports ii)auditreport Additional schemes, if any, iii)midtermreviewreports x e selected using WUTS iv) study reports v) Bank supervision mission eports TM. Traffic Management 13.4 Continuedeffective cooperation between the various stakeholders of the project and continued program leadership by WPSB. IT. Public Transport 14.2 The municipality provides continued support for improvementsto public transport. iM. RoadMaintenance 17.5 The municipality continues with announcedreform o f roadmaintenance management and operations. 3N. Environmental i.5 The municipality implements aanagement the emission control strategy, once the study is completed. Continued effective cooperation between the various stakeholders o fthe project and continued leadership by WEPB. TA. Capacity Buildingand '.9 Continued WMG ownership rechnical Assistance -39 -  illcomponents 579.8 Project Office has adequate staff, skills and authority to manage the overall project effectively. Project Office produces good quality timely reports. Project design i s adjusted in response to changing circumstances as required to meet the project objective. - 40 -  Annex 2: Detailed Project Description CHINA:Wuhan Urban Transport Project The implementation of this project includes components for road network development, public transport, traffic management, road maintenance, environment protection and technical assistance. The costs for land acquisition and resettlement and recurrent costs such as preparation, design and administration are indicated in each component. By Component: Project Component 1 US$461.30 million - Road NetworkDevelopment The key problems and deficiencies inthe existing roadnetwork withinWuhan were identified inthe Wuhan Urban Transport Strategy (WUTS). These may be summarized as: 0 lack o f suitable routes for external or cross-town traffic 0 insufficient capacity for cross-river traffic and poor distribution o f traffic between existing crossings 0 congestion inthe central areas o f the three towns, especially Hankou 0 inadequate road networks for the orderly expansion o f the city into new growth areas 0 poor conditions for pedestrians with resultant safety concerns. This component addresses the two immediate needs o f improving the operation o fthe roadnetwork within the city, and expanding the bicycle and pedestrian networks. The proposed road network investment strategy is also derived from the WUTS. It is the result o f extensive testing o f altemative road and public transport networks, and altemative investment options to address the key problems noted above. A total of forty-seven schemes, covered infive programs, are proposed for implementation over a five-year period. The primary objective and number o f projects ineach program is shown inthe table below. Many projects serve a secondary objective as well. Where appropriate these secondary objectives have been identified. Primary Secondary Objective Objective (a) Provide suitable routesfor through or cross-town traf$c 14 3 (b) Improve utilization of existing cross-river bridges 3 6 (c) Relieve congestion in central down-town areas 8 2 (d) Provide adequate road networks in development areas 10 3 (e) Provide safe conditionsfor pedestrians 17 1 ITotal I 52 I l5 I The civil works for these five programs include the construction o f new roads, upgradinglwidening o f existing roads, construction of interchanges and construction o f pedestrian overbridges or underpasses. The works are spread across the primary roadnetwork (middle and inner ringroads, and selected radial roads), the arterial road network and local roads. - 4 1 -  RN1 Provide suitable routes for external or cross-town traffic A number of schemes are situated on the primary road network, including the construction o f 18.6kmof the Middle RingRoad (North), 7.2 km o f the Middle RingRoad (South), and seven associated interchanges. Sections o f two radial roads will also be upgraded and one new radial road (13km) will be constructed. Three keyjunctions on radial routes will be improved. Additionally, sections of seven urban arterial and local roads will be constructed or upgraded. Middle Ring Road (MRR) & Interchanges: Three sections o f the MRR are proposed for inclusion inthe Bankproject: a 15 kmsection inthe north(including four interchanges) will be constructed between 2003 and 2005 and the remaining section inthe north (3.6km), plus a 7.2 km section inthe south, (including three interchanges) are scheduled for 2006-2007. RDl.I Middle Ring Road (North) (Etouwan-Sanjintan) 15.0km: This component is designed to provide relief to the central areas o f Hankou and to provide a through route for traffic wishing to by-pass the urban area inan east-west direction. The road will be constructed as an urbanexpressway (dual 3-lanes) and will be located adjacent to an existing flood protection bund, following a natural break inthe urban development. The roadwill connect inthe west with the existingwestem section o f the MRR and National Highway 107, and inthe east with the Dai Huang Highway (Huangpu Lu).Grade-separated interchanges will be provided at the crossing points with the existing four radial routes to the north. Traffic volumes in excess o f 80,000 vpd are forecast in 2007, increasing to above 100,000 vpd by 2020. RD1.2Middle Ring Road (North) (Sanjintan-Hun Shi) 3.6km: This section connects from the Sanjintan Interchange (above) to the existing Han Shi Highway on a temporary (Le. non-Master Plan) alignment. The final alignment connects directly to the approach to the proposed Yangtse No. 4 Road-and-Rail Bridge. RD1.3 Middle Ring Road (South) (Qingling-Luoshi Nan Lu) 7.2km: This section o f the MRRwould complete the southem section o f the route and provide a connection (via an 8km section o f route presently under construction and funded by WMG) between the existing expressway eastwards to Huang Shi (70km) and the completed Yangtse No. 3 Bridge and the westem section of the MRR.The component could thus provide a by-pass for traffic from the east (which would otherwise pass through the center o f Wuchang and use the No. 1 Bridge) and enhance the usage o f the Yangtse No. 3 Bridge. It is also claimed that this section of road would assist inthe development o f the adjacent areas, proposed for both hi-tech industrial and education uses. However, the traffic projected on this section o f the road was low and the degree to which this project substantively contributes to the overall objectives o f the Bank project, is not clear. It was agreed that though the project would be included inthe road network component, it would not be included for funding unless a substantially stronger case for its construction were made. Radial Roads & Key Junctions:. RD1.4 Qinghua Lu (Phase I, 4.48km; Phase 11,8.52km): This is a new radial route providing access to a proposed new development area inthe east o f the city, on land adjacent to the Wugang Iron & Steel Works. Itwill additionallyprovide a new route for extemal and truck traffic from the industrial area avoiding the ' center o f Qingshan. The alignment proposed initially for the middle section o f this road would have had severe environmental impacts inand around the East Lake, and has therefore been dropped. This roadhas been included inthe overall pool for the project with the understandingthat an altemative northem alignment for the middle section will be examined. Ifno suitable alignment is found, then the entire Qinghau Roadproject will be dropped and an altemative road further north (Luo Jia Zui to Dang Hu Gang), which fulfills the same traffic function, will be examined. - 42 -  RD1.5 Huangpu Lu: Improvement of 4.61 kmof the section of the Dai Huang Highwaybetweenthe central area andthe MRR(N).The existing road is congestedand its widening will provide additional capacity to serve the newly expanding residential areas inthe north-east of the city. RDI.6 OldHansha Highway: The project involvesthe removal ofabottleneck (1.25 km)onthe existing highway to provide a consistent 22m roadway (plusN M T lanes). RD2.3 Qiaokou Lu Interchange: It is proposed to improve the junction betweenJiefang Dadao and the northem approach to the Han River No. 4 Bridge. The improvement (a simple east-westflyover is proposed, with an alternative 3-level solution also considered) will ease traffic circulation on the mainroad network and improve access to the (presentlyunder-utilized) Han River No. 4 Bridge. RD2.4 Shanlankou Interchange (cost includes Jinshui LuImprovement (RD1.23)): This is an improvement to a keyjunction inthe inner area of Wuchang at the intersection o f HubeiLuand WuXian Highway. The improvement involves the construction of an underpass and a looped ramp to connect the highway to Hubei Lu,whichis already atalow levelwhere itpassesbeneaththe mainN-Srailline. The scheme also includes the construction of a short (320m) section of Jinshui Lu.The interchange will improve traffic access and circulation inthe area. InadditionRD2.5 GuocikouInterchange (see below) will improve operation oftheroadnetwork, whilst providing better access to the Han River No. 2 Bridge. Urban Arterial & Local Roads:: RD1.13 Nanniwan Flyover (1.37km): The project involves the construction of a 4-lane flyover across two mainrail lines and will provide improved access between the central business areas o f Hankouand the Qiaokou Economic Development Zone, and adjoining residential areas. PedestriansandNMTwill be providedwith a subway. RD1.16 JiangXiEr Lu (2.66km): A section of new arterial road to provide improvedaccess to and within the Qiaokou Economic Development Zone. RDI.17 YanHeDadai (4.74km): Constructiodupgrading ofroute along northbank of HanRiverto provide improved access andradial movement. RD1.23 JinShui Lu (330m):-Short lengtho f connecting road, to be constructed inconjunction with the Shanlankou Interchange (RD2.4). RD1.30 Maying Lu (1.96km): A local link to improve network connectivity and local access. RD1.32 Hanxi Lu: A short (430m) local missingconnection. Additionally, RD1.28 Meizi Lu (see below) will provide a significant new cross rail linkage. - 43 -  RN2 Improveutilization of existing cross-river bridges Three projects are specifically designed to improve the utilization o f the existing bridges across the Yangtse and HanRivers. RD2.1 Ramps to YangtseNo. 2 Bridge: The provision o f two new loopedramps is proposed linking the No. 2 Bridge directly with the northern riverside road. These ramps will allow a greater use o f the bridge and provide better distribution o f traffic onto the local road network. RD2.5 Guocikou Interchange: The improvement involves the construction of a looped linkroad beneath the southern approach to the Han River No. 2 Bridge to connect with, and provide access to, a new route builtalong the south side of the river. The interchange will provide improvedaccess to the bridge andwill relieve other roads andjunction inthe area. RD1.28 Meizi Lu (640m): The construction o f a short link passing beneaththe main through rail line and providing improved access to the presently under-utilizedHanRiver No. 4 Bridge. Additional six projects will provide some degree o f improved access to the existingbridges: the Middle RingRoad(North-East section (RD1.2) and Southern Section (RD1,3)), Qiaokou LuInterchange (RD2.3), and YouYi Lu(RD1.12). Xianggang Lu(RD1.8) and Xianggang LuInterchange (RD2.7) will improve access to the proposed Qingdao Tunnel beneath the Yangtse. RN3 Reliefof congestion incentralareas A total of eight projects are designedto relieve congestion, mostly inthe Hankouarea. These projects include the construction of three interchanges at key locations to ease traffic flow and enhance usage o f the inner ringroad. The construction o f the MRR(N),which provides an altemative high-capacity route for east-west traffic, will greatly ease traffic congestion inthe center o f Hankou. Inner Ring Road: Threejunction improvements are proposed onthe Inner RingRoad (IRR). Redesign and reconstruction o f the Jiefang Dadao section (5.7 km) is proposed under the road maintenance component. RD2.6Xunlimen Underpass: A 4-lane vehicular underpass is proposed along Jiefang Dadao. The objectives o f the scheme are to allow improved access for pedestrians across the IRR at ground level (the route to the south provides a direct connection to the pedestrianised walking street), and to make improved provisionfor public transport. RD2.7 Xianggang Lu Interchange (Hong Kong Lu Interchange): This location will become a key intersection between the IRR and the main northern approach route to the proposed Qingdao Tunnel beneath the Yangtse River linking the center of Hankou with Wuchang. The first phase of the improvement, involving a flyover along Jiefang Dadao, will be financed under the project. The scheme will allow for the improved operation o f the IRR and will permit local traffic and pedestrians to remain at ground level. Subsequent phases of the interchange (not funded under the project) will add a second flyover (at level +2) andprovide access to the proposed cross-river tunnel, and support development o f the long term central area network. RD2.1 Ramps to YangtseNo. 2 Bridge, which form part o f the IRR, are described under the river crossing section above. - 44 -  UrbanArterial Roads: RDl.8Xianggang Lu (Jianshe Dadao-Xinhuaxia Lu, 1.98km): Widening o f north-south route within Hankou will provide access to the proposed Yangtse River Tunnel. The project will improve traffic circulation within the down-town area o f Hankou and ease access to the proposed tunnel: it is complementary to the proposed Xianggang LuInterchange (RD2.7) at the junction with the IRR. RD1.12 YouYi Lu (1.06km): Widening o f a section of an urban arterial within the central area o f Hankou will remove a bottleneck andprovide a consistent cross-section. It will also improve access to the under-utilized HanRiver No. 3 Bridge. RD1.15 Zhongshan Dadao (495m): Improvement o f a short linkbetween the IRR (Jiefang Dadao) and the Riverside Road will ease access to the proposed bus interchange at the LRT terminal station. RD1.20/21 Zhongshan BeiLu (2.30km): Construction andor upgrading o f two sections of an urban arterial inthe central area ofWuchang will improve circulationandaccess to new development sites. Local Roads: Two schemes are proposed for the improvement o f local roads inthe inner areas o f Hankou District. RD1.31 TaibeiYi Lu (1.50km): Completion o f missingsections o f a local road serving residential areas in central Hankou. RD1.33 Luguoqiao Lu (825m): Widening o f a local route providingaccess to a proposed bus terminal at LRT station. FW 4 Provideadequate roadnetworks to support growth indevelopment areas RDl.10 & RDl.11: Jianshe Dadao (3.15km): A two-phase extension o f Jianshe Dadao into the proposed development area inthe north-east o f the city, including the construction o f a new link across the mainrail line. Two 12mwide subway boxes have already been built beneath the railway. The scheme will improve cross-rail capacity and provide access to the development area inthe north-east. RD1.14HouHu Lu (5.1O h ) : The road is proposed as the major development spine to the expanding residential areas inthe north-east o f the city. The scheme connects to Jianshe Dadao (RD1.11) and Huangpu Luimprovement (RD1.5). RD1.18 GongYeDaDao (2.63km): A development road inthe eastern area o f Wuchang, connecting with Qinghua Lu(RD1.4) will provide a core network o f strategic roads. Since this road links with Qinghua Road, its inclusion for funding would depend on the outcome o f the planned supplementary analysis for Qinghua Road (RD1.4). RD1.19 LuoShiNan Lu (2.48km): Comprises a southerly extension o f LuoShiBei Lu, which is developing as a major link serving the South Lake residential development area. The proposed road will connect with the proposed Southern Section o f the MRR (RD1.3). RD1.22 Qinyuan Lu (3.01km): A n e w link withinthe IRRinWuchang will provide access to an area close to the central area with significant potential for redevelopment. - 45 -  RD1.25, RD1.26 & RD1.27 Shipailing Lu/Jisan Lu (4.93km): Two schemes that will provide improved and rationalized access to a recently developing residential area on the no longer used civil airport in Wuchang. RD1.29 Sixin Dadao (5.41km): A major new avenuehoulevardproposed to stimulate residential development inHanyang inthe area south o f MoShui Lake. Additionally, three other projects, notably MRR(S) and Qinghua Lu, will significantly support the growth and expansion o f the proposed development areas. RN5 Provide safe conditionsfor pedestrians A total o f seventeen pedestrian footbridges or underpasses are proposed - nine inHankou, six inWuchang and two inHanyang at a total cost o f U S $11 million. The proposed vehicular underpass at Xunlimen on the IRRwill provide improved facilities for pedestrians (and buses) at ground level. Capacity Buildingand TechnicalAssistance (TA). The following Technical Assistance related to road network development will be provided as part o f the capacity building component 6: (i) Constructionsupervision (ii) Highstrength bituminous concrete pavement study (iii) Road Safety Audit o f New Roads Project Component 2 US$33.40 million - Traffic Management and RoadSafety Component This component addresses the WUTS problems o f congestion inthe central area, inadequate cross-river capacity and pedestrian safety. It also aims to increase the safety and productivity o f the roadnetwork by utilizing modern traffic management techniques. Coordinated programs o f comprehensive traffic management measures will be implemented to complement the works inthe road network and public transport components. T M 1PedestrianProgram. Investments made under this component inHankou, Hanyang, Wuchang, Hongshan and Qingshan are complemented by investments inpedestrian facilities made as part o f the road infrastructure component. i) Mid-block signalizedpedestrian crossings at sixty-three locations. The design and location o f these crossings would maximize pedestrian safety and convenience. All new crossings would be signalized with central safety islands for protection and storage; existing non-signalized zebra crossings would be replaced with signalized crossings inthe A T C system. (The costs o f the signal works are included inTM5-ATC and the cost o f the central safety islands inTM4). ii) Traffic signals at ninety-nine junctions inthe ATC system would includepedestrian phases to cross all arms o f the junction wherever possible. The pedestrian phase should not conflict with any vehicle tumingmovements, especially right-tum-on red. (The costs o f the signal works are included inTM 5-ATC. The cost of central safety islands is included inTM4). iii) Onepedestrianstreet T M 2. Non-MotorizedVehicle Program Non Motor Vehicle (nMV)Routes - 60 kmo fNMV priority routes with either MViNMV segregation or MV restrictions inHankou, Hanyang, Wuchang, and Qingshan. - 46 -  T M3 BusPriorityMeasuresProgram Provision is made for traffic facilities to implement 35km of bus lanes on nine routes. These compliment facilities to be provided inthe public transport component. (Technical Assistance to assist with the further development and designo f bus priority measures and to assist with identification o f the potential for a bus rapid transit corridor is discussed under Component 6). T M4 JunctionChannelizationand TrafficFacilities Program Junction channelization and traffic facilities (signs, lines andbarriers) will be implemented at the 274 traffic signalized sites (including mid-block pedestrian crossings) inthe A T C system to be provided under the project. Junction channelization will focus on tightening upjunctions, channelizing vehicles indirect and clear paths and bringingstoplines forward to minimize clearance times and increase efficiency. Junction channelization does not meanjunction widening. This program consists of: 0 46 channelization schemes involving physical civil works 0 228 channelization schemes using hatched markings, roadlining, signs and barriers Road marking equipment (to paint and remove thermoplastic lines) directly concerned with these traffic facilities is included inTM8. TM 5 Area Traffic Control(ATC) and Traffic SignalUpgradingProgram. ATC systems will be implementedinHanyang, WuchangIQingshan and East Lake Hi-Tech Zone. Traffic signals operating under isolated control will be implemented in outlying areas. This program includes a total o f 274 locations, 18 o f which are isolated vehicle-actuated (VA) junctions, and 63 o f which are mid-block signalized pedestrian crossings. There will be 185 new signals and 91 upgraded signals, communication equipment, and equipment for two control sub-centers, one inWuchang and one in Hanyang. Details are given inthe Table below: District Existing New signals Total Of which are mid-block Area signalsto be to be installed pedestriancrossings upgraded WuchanglQingshan 66 104 170 (33) 125k m2 Hanyang 11 45 56 (14) 20km2 EastLake Hi-Tech 14 34 48 (16) 12km2 Zone TOTAL 91 183 274 63 This component includes the installation (at the same time as the ATC) o f thirty-five CCTV real-time monitoringtraffic cameras, and six Variable Message Signs (VMS) to facilitate better distribution o f traffic between the existing river crossings. Technical Assistance will be provided inthe design o f the A T C system andjunction channelization covering the construction phase, including detailed design and implementation management and testing. This is includedinComponent 6. - 47 -  T M 6 Road Safety and AccidentAnalysis Program This programwill improve road safety and accident analysis procedures and consists of: (i) Enhancement o f the Trafic Management and Comprehensive Information System, including upgrading o f the satellite based positioning system. (ii) Accident Blackspot Improvements - Physical traffic engineering works or markings,road lining, signs andbarriers to improve sixteen accident blackspot sites and thirty-two arterial roads with accident problems (mainly in suburban areas) (iii) Trafic Accident Investigation Equipment equipment and special vehicles to improve accident - response and on-site investigation. (iv) Electronic Police Camera Enforcement - red-light violation cameras at thirtyjunctions Inaddition, anAccident Analysis Study usingTechnical Assistance is includedinComponent 6. T M 7 RoadUser Education(RUE) Program The RUEprogram, using a more pro-active approach, will focus on children. The program consists o f : Children Trafic Safety Playground and associated district education bases at nine sites Public Education Billboards large and small public advertisement billboards - RUE Columns in Local Newspapers equipment to improve the RUE columns inlocal - newspapers, and to improve images and electronic communication between the Traffic Police and the media RUE Helpline and Website - development o f a website and associated telephone helpline for all roadusers Trafic TVProgram equipment to make a TV program to be broadcast daily - Trafic Radio Program development o f a traffic information radio broadcast station - Trafic Safety Knowledge - designing and printingo f pamphlets for free distribution to children T MInformation Map development o f the Wuhan Traffic Management Map and funding o f the - inaugural edition T M 8 Roadmarkingequipment. Four motorized and seven hand-pulledroad-marking vehicles to paint and remove thermoplastic lines, directly concerned with traffic facilities inTM4. TM 9 Design/Administration. The cost offeasibility study, traffic engineering design, its implementation, and administration will be financed by the municipality. Capacity Building and Technical Assistance (TA). The following TechnicalAssistance relatedto traffic management and road safety will be provided as part o f the capacity buildingcomponent 6: i) Buspriority planning and design ii) Design of the ATC System and associatedjunction channelization. iii) Accidentanalysisstudy iv) Parking study v) Travel Demand Management (TDM) Study to develop potential measures such as a route guidance system using Variable Messaging Systems (VMS), managing vehicles by category and by time, andcongestion charging. After the study, selected TDMmeasures could be implementedunder the project, subject to availability o f funding at the time. - 48 -  Project Component 3 US$ 34.20 million - Public Transport The objective o f this component is to increase the efficiency, effectiveness and attractiveness o f bus services inthe city. The content o f this component includes (i) introduction o f a computerized management information system to increase the efficiency o f operators inroutine administrative and technical tasks, and o n street management o f bus operations (ii) improvement o f passenger facilities and service through construction or upgrading o f interchanges, termini and bus stops, and (iii) provision for a pilot BRT scheme, should studies (to be financed under the project) indicate its viability. Technical assistance to support reform, for the design of the CMIS, and for BRT studies i s included incomponent 6. PT1Computerized ManagementInformationSystem (CMIS) Currently, most o f the administrative and technical tasks in the bus companies are carried out manually with very little use being made of computers. Many repetitive tasks, which are ideally suited to computerization, are done by teams o f workers and as a result staffing ratios are high. In an attempt to improve efficiency and quality o f work, it was decided that the project should encourage computerization for all organizations involved with public transport inWuhan. Inthis subcomponent, a number o fmanually performed tasks will be computerized. Initialproposals inthe computerization phase include management o f company records, staff records, salary calculations, passenger and revenue reporting, bus maintenance system, spare parts inventory, vehicle scheduling and driver rostering. PT 2 Introductionof computerizedsatellite basedvehicle locationand control system A computerized satellite based vehicle location system, with an operations center to control up to 600 buses o n twenty routes, will be developed as a demonstration project. The objective o f this system i s to achieve more regular dispatching o f buses, to improve schedule reliability (reduce bunching o f buses) on the road (thereby reducing bus requirements) and eventually to provide waiting passengers with real time information on bus amvals. The data gathered from the system can be used to improve vehicle scheduling. When competitive franchising of routes becomes operational under reform, the system can also be usedby W T C to monitor the performance o f the operators. PT 3 Interchanges A total o f eleven interchanges are proposed. Ofthese, four (Wujiashan, Yongantang, Guanshanyi Road, Qingling) are associated with the removal o f long distance bus stations from the town center to outlying areas and which will also serve as termini for local routes. Of the remaining seven interchanges (Zhonghua Road, Taipingyang, Lijibei Road, Sanyang Road, Yongqingjie, Guqintai and Yuejiazui), four will be situated at LRT stations and are intended, inpart, to serve passengers interchanging betweenbus and rail. The remaining three are intended to act as major bus to bus interchanges for intra-Wuhan bus passengers. The aim o f these facilities is to shorten long routes that have loading imbalances, and to reduce the number o f duplicating routes on major roads. The interchanges will also allow better facilities for passengers and should greatly reduce the walking distances required for transferring passengers. - 49 -  PT 4 Termini Most o f the twelve proposed termini are located inthe outer areas o f Wuhan and are intended to help the bus operators remove terminus points from their present on-street locations, and to improve operational control o f the services. They will also provide additional overnight and off peak parkingcapacity, and routine maintenance facilities inappropriate locations. The proposed sites for the termini are Qilixincu, Baibuting, Erqiaoxicu, Nanhuhuayang, Chenjiadun, Jianganxizhan, Gusaoshu, Houhu, Xiangyangcun, Xudong Road, Guanshan, and Tiejicun. The above facilities (interchanges and termini) will require a total land area o f 160,700-sq. m. PT 5 BusBays and Stops Excessive channelization at bus stops together with overloaded stops, highbus volumes and poor on-street discipline results inlong delays to buses. Under this sub-component, a total o f fourteen bus stops will be reconstructed, which will not only increase the number o f individual stops but will also remove the restrictive channelization. Insome cases this involves lengthening the bus bays, inothers it involves providing two parallelbays, while insome cases it simply involves lengthening the kerb distance available for bus stops. Some guidelines were developed to help inthe design process, the key parameter being that the individual stops should not be forecast to operate at more than 85 percent o f theoretical capacity. Under this scheme the fourteen existing stops to be reconstructed are: Wusheng Road, Baofeng Road, Zhongshangongyuan, Xunlimen, Xinhua road, Qiouchangjie, Yongqingjie, Zhingnan Road, Dingziqiao, Fujiapo, Yuemachang, Hongshan, Guqintai and Wuqingsan Primary Road. PT6 Implementationof Bus RapidTransit Provision is made for the implementationo f a pilot BRT scheme, should the studies o f PT Networks to be undertaken as part o f further work on the Wuhan urban transport strategy, (TA 3.7.1) and the associated BRT Study (TA 3.3.4) demonstrate a need. Designwork would be undertaken under TA 3.3.5. PT 7 DesigdAdministration The cost ofengineering survey and design, implementation, and - administration will be financed by the municipality. CapacityBuildingand TechnicalAssistance (These are included inthe capacity buildingcomponent 6) include: 0 PT Management Information System Studies for user specification and definition o f the subsystems to be implemented inthe sub-component PT 1CMIS 0 PT Business development plan (like a 5-Year Plan) - supportto operators to prepare these plans including a route network development plan 0 Support for Reform 0 Buspriority and Bus Rapid Transit (BRT) study 0 BRT Design Studies - 50 -  Project Component 4 US$37.50 million - RoadMaintenance(RM) This component aims to assist the government's intentionto reform the current roadmaintenance management system so as to increase the efficiency and effectiveness o f maintenance works, andthe amount o f roadmaintained ingood condition. WMG intends to introduce competitive tendering for routine works, but to retain in-house capability for emergency needs. The project provides for (i) the design(in component 6) and implementation o f a road maintenance management information system (inthis component), (ii) purchase o f advanced road maintenance equipment to improve the efficiency and the effectiveness o f in-house emergency maintenance, and (iii)reconstruction o f ten o f the most damaged road sections inWuhan. RM1RoadMaintenanceCivilWork.This sub-component involves the reconstruction o fthe existing roadpavement along ten o f the most heavily damaged roads inthe city. The road cross-section will remain unchanged. The reconstruction will include the main carriageway, footpaths and NMVlanes. Traffic management or public transport improvement, if any, on these roads is described inthe respective component. RM 1.1, 1.2and 1.3Jiefang Avenue (Gutiansi to Hangkong to Huangpu to Chama - 15.1km). This road was constructed in 1955. Other than some portions that were repaved in 1992, the road section has not been repaired so far. R M 1.4 WushengRoad (1.9km). This road was constructed in 1956. The flyover was repaved in 1992. The remaining road sections o f the roadhave not beenrepaired so far. RM 1.5 Jianghanyiqiao road (32.2km). This roadwas constructed in 1956. The bridge was the first bridge constructed cross the Yangtze river. No major maintenance has taken place since. RM 1.6Jiefangnan road (1.lkm). This roadwas constructed in 1980. Noroutine maintenance has taken place since. R M 1.7 Wangqinggong Road (13.1 km). R M 1.8 Hanyang Avenue (5.5km). This road was constructed in 1956. Itwas reconstructed in 1986 and some re-paving was done in 1992. R M 1.9 Heping Avenue (1.3km). This road was constructed in 1956. No major reconstruction has taken place since. RM1.10 Gutianzheng Road (1.735km). One carriageway was constructed in 1989 to provide access to a World Bank financed wastewater treatment plant. The project will complete this road. RMl.11Zhongshan Avenue (2.4km). This roadwas constructed before 1949. Although there has been some repaving, the condition o f the road condition remains very poor. R M 2 RoadMaintenanceWorks Equipment. While it is the intention o f the Government to introduce competitive biddingfor maintenance works contracts, some emergency works will continue to remain in-house. The equipment purchase includes routine roadmaintenance equipment, including: a pavement mill, concrete breaker, bituminous seam repairer, and a pipe layer. RM3 ComprehensiveMaintenanceManagementSystem. . The comprehensive system includes road pavement, bridge anddrainage maintenance management sub-systems. The main objective o f developing a comprehensive management system is to provide municipal decision makers with a tool for the analysis of maintenance requirements, for the planning, programming, and budgeting o f maintenance works, and the management o f the city road network database. - 51 -  There are four activities inthis subcomponent: (i) System design study - described inthe technical assistance component (TA 3.6) (ii) ITsystempurchase (iii) Initial data collection and system implementation (iv) Data collection equipment, including roadpavement test telecamera, conflict coefficient test vehicle, falling weight deflectometer, lightroad surface instrument, andbridge state test instrument. The IT based management system will be procured after the completion o f the project-financed system study. R M 4 RoadMaintenancerecurrentcost includingpreparation, surveyand design, implementation, and administration. This will be financed by the Wuhan Municipal Government. Project Component 5 US$5.50 million - EnvironmentalProtection This component includes measures to mitigate the short and longterm environmental impacts o f increased travel, and the construction o f roads. It includes (i)noise barriers, landscaping and other mitigation measures along new and widened roads, (ii) provision for expansion o f the existingair quality and noise monitoring system, and (iii) provision for upgrading o f the vehicle inspection and maintenance (YM) system. Design o f a Motor Vehicle Emission Control Strategy (MVECS) is included inTA component 6. EN1 Vehicleemission andtraffic noisemonitoringsystems. Wuhan Environmental Monitoring Center, an institute under Wuhan Environmental ProtectionBureau (EPB), is responsible for all environmental monitoring activities and environmental information management inthe city. Consolidated and analyzed data from the Center to Wuhan EPB and the municipal government supports the decision making process for environmental policies, regulations, local environmental quality and discharge standards The subcomponent will help Wuhan Environmental Monitoring Center to substantially expand its existing air quality environmental monitoring system from five sub-stations to fifteen, and from limited parameters for general air quality to more precise information for vehicle emission and traffic noise. This subcomponent includes procurement and installation o f equipment for automatic computerized monitoring for two vehicle emission monitoring sub-stations and seven traffic noise monitoring sub-stations, IT hardware and software and associated automatic data collection and analyses. It will also include a vehicle for remote and mobile air quality monitoring, and a vehicle for motor vehicle emission monitoring. EN2 Motor Vehicle EmissionControl Strategy(MVECS)The project will finance, under the Technical Assistance Component, a study to identify the most appropriate measures for the implementation o f a vehicle emission control strategy inWuhan, withinthe framework o f the National Strategy. The study will include analysis o f characteristics o f vehicle emission inWuhan, environmental impact from vehicle development, and measures for vehicle emission control, including an upgraded inspection and maintenance (I/M)system. EN3 Noise Mitigation. The project will provide facilities for noise mitigation, including noise barriers for use on interchanges, air conditioners, double-glazed windows and ventilation facilities for residential buildings, andprotectionfor noise sensitive sites, e.g., hospitals and schools. - 52 -  EN 4 EnvironmentalEngineeringDesignand Management.This component includes the costs of environmental engineering design, local construction supervision, and the EMP implementation and administration financed by Wuhan Municipal Government. EN 5 EnvironmentalMonitoring.This is a locally financed component to conduct environmental monitoring and supervision during the project construction and operation phases, and to ensure implementation and realizationo f the EnvironmentalManagement Plan (EMP) endorsed by Wuhan Municipality. EN6 Greeninfload Landscaping.The project will provide greening along the right-of-way ofthe roads to be built under the project, which are included inthe road network component. EN7 Upgradingof Inspectionand Maintenance (I/M)system.This will include funding for nine sets o f A S M testing equipment andtwo sets o f actual driving mode testing equipment. Capacity Buildingand Technical assistance Inadditionto the planned investment, the following analyses andstudies relatedto environmental protection and management are proposed as part o f the capacity buildingcomponent 6: i) Training for environmental management staff ii) Preparation o f a Strategic Environmental Assessment (SEA) as a capacity buildingexercise for the Wuhan environmental agencies. The SEA process could then be used to assist decision making in future updates o f the Wuhan Transport Strategy. Project Component 6 US$7.90 million - Capacity Building and TechnicalAssistance (TA) This component will provide 0 domestic and intemational training for officials from project implementing agencies, to strengthen their technical andmanagement skills 0 consultant services to assist inproject implementation, and to undertake studies for further investigation and policy development o f issues and topics discussed during project preparation 0 office equipment to enhance the productivity o f the implementing agencies TA1 InternationalTraining This subcomponent will include a number o f intemationaltraining tours and courses for staff from the concemed agencies. The proposed destinations for the tours include North America, Europe, Brazil, Japan, Singapore and Hong Kong.. Final details of each study tour will be decided over the course o f the project. TA2 DomesticTraining This subcomponent will include a number o f domestic training tours and courses for staff from the concemed agencies. The proposed destinations for the tours include Shanghai, Beijing, Guangzhou, Kunming, Shenzhen, Dalian, Urumqi,Hangzhou and Shijiazhuang. Final details o feach studytour will be decided over the course o f the project. TA3 Internationaland Domestic Consultant Services These services are listed under the component to which they relate. - 53 -  TA3.1 ConstructionSupervision TA3.1.1 Civil WorkSupervision. These consultant services are to assist the implementating agency for the road network development component inthe supervision o f the civil works construction during the entire implementationperiod. TA3.2 RoadInfrastructure TA3.2.1 High Strength Bituminous Concrete Pavement Study. This study will be managed by the RoadNetwork Development Component Agency inorder to find the most suitablepavement material for the city o f Wuhan. TA3.2.2 Road Safety Audit of New Roads. This will introduce the concept o f Road Safety Audits, describe and illustrate the principles and procedures o f Road Safety Audits, carry out a Road Safety Audit o f the roads proposed under the Road Infrastructure Component at three stages: preliminary design, detailed design and pre-opening. TA3.3 Traffic Managementand Safety. TA3.3.1 Parking Study -will provide assistance to the WPSB and other agencies to develop appropriate parking policies and strategies for both motor vehicles and non-motor vehicles. TA3.3.2 Design of theATC System and associatedjunction channelization. Consultant services covering the construction phase, including detailed design, implementation, management and testing o f the goods and works insubcomponents TM 4 & 5. TA3.3.3 Accident Analysis Study. Assistance to enhance the capacity o f WPSB Traffic Police Detachment inaccident analysis, and to establish an accident analysis system inWuhan to complement the existing national TAIS. TA3.3.4 Travel Demand Management (TDM) Study. Assistance to WPSB to develop specific TDM measures appropriate for Wuhan inthe context o f the WUTS, and taking account of ATC and the results o f the parking study. TA3.3.1 Bus Priority Assistance to Wuhan Public Security Bureau and other local design institutes with the further development, design, implementationand operation o fbus priority measures to be implementedin subcomponent TM 3 o f the project. Includes advice on international experience. TA3.4 PublicTransport TA 3.4.1 Design ofPTManagement Information System. The objective o f this TA is to design the CMIS to be procuredunder subcomponent PT1. The key tasks will include: (i) Identificationofthekeyactivitiestobecomputerized (ii) Userspecificationoftherequirementsoftheapplications (iii) Assessmentofexistingsoftwarethatwouldbesuitabletomeetuserrequirements, with customization The client for the Computerization o f Basic Tasks would be the Wuhan Group Public Transport Corporation (WGPTC). -54 -  TA 3.4.2 Design of a satellite based Automatic Bus Location System. The objective of this TA is to designthe satellitebasedAutomatic Bus Locationsystemto beprocuredunder subcomponentPT 2. WTC andWGPTC will bejoint clients. WGPTC and individualoperatorswill needthe systemfor operationof the services, while WTC will needthe systemfor monitoringofservicedelivery. WTC andWGPTC wouldbejoint clients for designofthis AVL System. WGPTC andindividualoperatorswill needthe systemfor operationofthe services, while WTC will needthe systemfor monitoringof service delivery. TA 3.4.3 PT Business DevelopmentPlanning. The objective of this subcomponentis to improvethe planningprocess for bus servicesinWuhanbyprovidingadvice andon-the-jobtrainingto those involvedin preparationofthe Five-YearBusinessPlansat eachofthe operatingcompaniesandother involved agencies. WGPTC will therefore be the primaryclient. The Plan(s) will bepreparedby operatorsandthe role ofthe consultantwill be to guide, assistandprovideon-the-jobtrainingas requiredto those responsiblefor planpreparation. Assistance will also be giveninsettingup statistical information systems to providethe informationrequiredmonthlyby the WuhanTransport CommissiononPTusage and performance. Preparation of a Five-Year Plan The Planwill consist of the followingelements: (i) Planningoverview includingpopulationprojections,new developmentareas and any new transport infrastructure (ii) Standards andguidelinesto be adoptedinplanningfor bus services (iii) Five-yearbusroute networkdevelopmentprogram (iv) Estimateofnewbus purchaseandbus scrapping (v) Estimateof depot andparkingrequirements (vi) Ridership andrevenueprojections (vii) Capital investmentprogram (viii) Operatingcost forecasts (ix) Overallfinancial positionincludingall financial supportrequiredfrom WMG andany fares increase requirement Training in Survey Techniques. Inadditionto advice onthe preparationof Five-YearBusiness DevelopmentPlans,trainingwill also be given inconductingbus passenger surveys, publictransport trip demandsurveys, andbus priority studies. Operatorswill be assistedto identifylocations throughout Wuhanwhere buses are excessivelydelayed, either currently or likely to be inthe coming five years. Data wouldthenbepassedonto the WPSB to plan, designandoperate buspriority measures (see TA 3.4.6 & 3.4.7). TA 3.4.4 PT InstitutionalReform. The objective o f this TA wouldbe to support the implementation (startedinFebruary2003) ofthe reformprogramofWMG throughthe provisionof advisory servicesto WuhanTransport Commission(WTC). Specific support is expectedto include the following: (i) AssistingWTCindevelopingworkableandeffectivetenderingandfranchisingproceduresby ensuringthat all regulationsnecessaryfor the reformedstructureare prepared; determiningstatistics to be reportedmonthlyonpublictransport performance; andestablishingproceduresandpenalties to ensure timely and accurate reporting (ii) Undertakinga fare settingandprofit determinationstudy, andto help establisha process for regularreviewandadjustment of bus fares. -55 -  (iii) Advising on the steps inmoving operators from SOE towards the creation o f shareholder owned companies, with particular regard to minimizing the impact on staff. (iiv) Assisting WMGto formulate more rational PT policy andregulation, andto refine the revised organization structure so as to achieve increased efficiency o f service (v) Periodic assessmento f the effectiveness o f the reforms interms o f achieving their stated objectives TA 3.4.5 PT Route Network Planning. These studies would be designed to assist in (i) Undertaking o f on bus passenger surveys and residents public transport trip demand surveys, (ii) Restructuring o f the bus route network, including routes and schedules (iii) Identification o f possible additional locations for bus priority (iv) Identificationo f possible corridors for busways TA3.4.6 Buspriority and Bus Rapid Transit (BRT) Study. This is a major study to be undertaken for the Wuhan Planning Bureau inconjunction with further work on the Wuhan Urban Transport Strategy (see TA 3.7) by the Wuhan Planning Bureau. The timing and content of this study shouldcoordinate with studies carried out on strategy and general bus priority. The main objectives o f this study are to: (i) Further review the need for bus priority inthe bus network, taking into account delays to buses, corridor bus and passenger flows, and potential network redesign (ii) Assess the potential for BRT inthe PT network (including normal bus, BRT, and metro), taking account o f corridor flows, availability o f road space to insert BRT, or the ability to widen roads to insert BRT (iii) Develop and evaluate BRT proposals on a line by line and network basis (iv) Identify main system design parameters, including bus types, stations, and ticketing system for the implementation o f BRT and bus priority (v) Prepare initial concept cost estimates and implementationschedules TA 3.4.7 BRT Design Provision o f consultant services for the preliminary design o f BRT schemes resulting from the study under TA 3.4.5 above. The work would be undertaken for the Wuhan Transport Commission. TA 3.5 Road,Bridge andDrainageMaintenanceManagementSystem. Assistance inthe design and implementation o f a comprehensive system for the analysis o f maintenance requirements, and the planning, programming, and budgeting o f maintenance works. TA 3.6 Environmentalmanagement. The subcomponents of this TA are : TA3.5.1. MVECSPlanning and implementation. Assistance with the planning, design and implementation o f measures proposed inthe Wuhan MVECS, including the upgrading o f the I/Mprogram insub-component EN7. TA3.5.2. Capacity Buildingfor Strategic Environmental Assessment (SEA). Training for WEPB and local design institutes inthe techniques o f SEA, and assistance to undertake an initial SEA for Wuhan relatedto further work on the WUTS. - 56 -  TA 3.7.Wuhan UrbanTransport Strategy(WUTS) This will include (i) Capacity building o f the Wuhan Planning Institute and Wuhan PlanningBureau, particularly in transport planning, policy formulation and investment programming. (ii) International and local training for staff (iii) Consultant services for the enhancement o f the transport model (iv) Assistance with further studies, including, more indepth analysis of (a) cross river travel demand (b) PTmodes andnetworks (including the potentialfor BRT) (c) management ofcentral city travel demand (d) 2007 - 2012 investment needs and (e) financial capacity (v) Integration o f WUTS with the overall transport strategy for the entire municipality (vi) Support for production o f a "White Paper" urban transport policy statement and a 2007-2012 investment program based on the results of further studies. (vii) Development of a Wuhan transport planning database. TA 3.8 Travel needs ofthe disadvantagedandvulnerable. Follow upto the survey undertaken during project preparation. TA 3.9 FinancialManagementSystem. The objective o fthis TA is to strengthen financial and operational management, and computer based FM systems, including systematic training. The key tasks are the establishment and improvement o f a computer based financial management system, developing a financial model to assist the municipality to rationalize infrastructure capital investment, operations and maintenance, anda training program. This is a large TA with a very broad TOR, which includes aspects that relate to WUTS. TA 4. Office Equipment This subcomponent will fundpurchase o f office equipment to enhance productivity at the offices o fthe implementing agencies. -57 -  Annex 3: Estimated Project Costs CHINA: Wuhan Urban Transport Project Traffic Management and Road Safety 13.20 18.60 31.80 Public Transport 23.70 7.70 31.40 Road Maintenance 24.10 12.10 36.20 Environment Management 2.60 2.70 5.30 Technical Assistance 1.50 6.00 7.50 Total Baseline Cost 442.70 120.70 563.40 Physical Contingencies 9.20 3.60 12.80 Price Contingencies 0.90 2.70 3.60 Total Project Costs1 452.80 127.00 579.80 Interest during construction I1 16.40 16.40 Front-end fee 2.00 2.00 Total Financing Required 452.80 145.40 598.20 Goods 6.40 26.20 32.60 Works 217.00 94.80 311.80 Services 1.50 6.00 7.50 None Bank Finance 227.90 0.00 227.90 Total Project Cost: 452.80 127.00 579.80 Interest during construction 16.40 16.40 Front-end fee 2.00 2.00 Total Financing Required 452.80 145.40 598.20 1 Identifiable taxes and duties are 0 ( U S h ) and the total project cost, net of taxes, is 598.2 (US$m). Therefore, the project cost sharing ratio is 33.43%)of total project cost net of taxes. - 58 -  Annex 4: Cost Benefit Analysis Summary CHINA: Wuhan Urban Transport Project Background Economic analysis for the project was conducted as part o f the urban transport development strategic planning exercise. Prior to the preparation o f this project, Wuhan did not have adequate capacity inthe areas o f strategic transport planning, traffic modeling, and project economic analysis. Through the preparation o f this project, Wuhan now has a comprehensive transport development strategy and an investment program up to 2007, which have provided a foundation for the definition o f the current project. Moreover, a network-based urban transport planning(UTP) model has been developed for Wuhan. This is an important planning tool for strategic planning and evaluation o f investment programs. The model was built using a software package, EMMEl2, and was calibrated with data from household and citywide vehicle travel origin-destination surveys, and traffic counts at various locations. The model was then used to simulate network traffic performance under different scenarios -with and without the project. The simulation results, mainly inthe form o f travel distance, time, and speeds for each personal or vehicular trip, were usedto estimate the transport user benefits, Le. savings inpersonal travel time and vehicle operating costs. The Formulationof DevelopmentStrategy andInvestment Program The strategic planningexercise included a detailed evaluation o f altemative strategies. Four altemative transport networks for year 2007 were tested using the newly calibrated UTP model. These alternatives included: (i) do-minimum; (ii) management strategy; (iii) traffic maximum transit; and (iv) maximum highways. On the basis o f a comparison interms of traffic performance and investment costs, a year 2007 preferred network was formulated, on which a budget-constrained investment program for the period 2003-07 was identified. The World Bank funded project was then defined from the investment program. -59 -  [For projects with benefits that are measured in monetary terms] maintenancecosts Net Benefits: $706 m IRR: 23 Yo 1Ifthe difference betweenthe presentvalue offinancial andeconomic flows is large and cannotbe explained by taxes and subsidies, a brief explanation o f the difference is warranted, e.g. "The value o f financial benefits is less than that of economic benefits because o f controls on electricity tariffs." Summaryof BenefitsandCosts: The components designed to improve traffic performance include the following: (a) road network development; (b) traffic management and road safety; (c) public transport service improvement; and (d) roadmaintenance. The transport network traffic benefits were computed for normal traffic and generated traffic, and the benefits for diverted traffic (redistribution o f traffic resulting from traffic diverted from alternate routes and modes because o f changes inrelative trip costs) were implicitly accounted for through the network model. The quantified benefits include both savings inpersonal travel time costs and vehicle operating costs, which represent the major share o f the total project benefits. Other project benefits, such as improvedtraffic safety, reduced auto emission, and intra-city freight transport time savings were considered, but not in monetary terms due to lack o f reliable data. The ERR and NPV were estimated on the basis of savings in personal travel time and vehicle operating costs against the total project costs including investment, operations andmaintenance costs. As other benefits were not included inthe calculation, the ERRand NPVpresentedinthis Annex can be considered to be conservative estimates. The cost o f each component included costs for physical works, detailed engineering design, and implementation supervision, andphysical contingencies. Annualized operations and maintenance costs were also includedinthe evaluation. - 60 -  Bicvcles 16% Passenger cars 26% Taxicabs 26% Buses 19% Goods vehicles 11% Total 100% MainAssumptions: Traffic growth rates were based on future population and income growth projected inWuhan's economic planning (see Table below). Total person trips are expected to grow with population. Motor vehicle ownership is expected to grow at the similar rate as GDP growth, and this forecast is consistent with Wuhan's historical data for the last 20 years. 2000 2005 2010 2020 PoDulation (million) I 7.49 7.97 8.45 9.70 GDP (billion Yuan) 120.7 220.0 338.5 666.0 GDP growth rate 12% 12% 9% 7yo Per capita GDP $2,014 $3,450 $5,007 $8,582 kUS$) I I I I I The discount rate or economic cost o f capital used inthe analysis was 12%. A standard conversion factor o f 0.9, which is the latest World Bank estimate for China, was used to convert financial costs to economic costs. For physical components, annual operations and maintenance cost was assumed to be 2.2 percent o f capital cost. The assumed project life for the purpose o f economic analysis was 20 years with 50 percent assumed salvage value for capital investments. Unitvehicle operating costs (VOC) byvehicle type andpassenger travel time costs bymodewere based on locally provided basic cost data. VOC for mode iwas calculated usingthe following formula: VOCi = Ai + Bi (Us) [l 0.2 (V/C)] [l+ 0.2 (V/C)], + where Ai and Bi are empirical parameters for mode i,s is vehicle travel speed on the link, V is link vehicle volume, and C is link capacity. Following the guidelines suggested inthe World Bank Infrastructure Note No. OT-5, "The Value o f Time inEconomic Evaluation ofTransport Projects," the following values o ftravel time were assumed. Trip Purpose Value 1 Commuting trips 30 percent o f household hourly wage, based on international empirical evidence Business trips 130percent o f household hourly wage, considering cost to emdovers I Other non-commuting and school trim 115 Dercent o fhousehold hourlv income I -61 -  Sensitivity analysis I Switching values of critical items: The sensitivity analysis tested the project viability under a number o f scenarios. The major sources o f down-side risks were identified to be: (i) traffic growth lower than what was expected; (ii) savings VOC lower than expected; (iii) value o f travel time lower than expected; (iv) project cost overrun; and (v) a combination o f cost overrun and benefit reduction. The results o f the analysis, shown inTable below, suggested that the project was robust to traffic, cost, and benefit variations. I Scenario I ERR I N P V at 12% discount rate I (a) Base case 23.0% $706 million (b) Traffic growth rate reduced by 22.0% $630 million 20% II (d) Cost overrun bv 20% (c'l Benefit reduction bv 20% II 19.8% $415 million 20.4% II $541 million II A detailed technical document onthe economic analysis, prepared by Wuhan City Comprehensive Transport Planning and Research Institute, is included inthe project file. - 62 -  Annex 5: Financial Summary CHINA: Wuhan Urban Transport Project Years Ending IIYear1 I Year2 I IMPLEMENTATIONPERIOD Year3 I Year4 I Year5 I Year6 I Year 7 Total Financing Required Project Costs InvestmentCosts 78.4 227.1 144.1 81.4 34.8 5.7 0.0 RecurrentCosts 3.7 1.8 1.1 0.9 0.8 0.0 0.0 Total Project Costs 82.1 228.9 145.2 82.3 35.6 5.7 0.0 Interestduring 2.2 1.8 2.6 3.2 3.2 3.5 0.0 construction Front-endfee 2.0 0.0 0.0 0.0 0.0 0.0 0.0 ]Total Financing 86.3 230.7 147.8 85.5 38.8 9.2 0.0 1 Financing IBRDIIDA 0.0 106.6 58.6 23.4 5.7 5.7 0.0 Government 71.7 138.7 89.2 62.0 33.1 3.5 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User FeeslBeneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 71.7 245.3 147.8 85.4 38.8 9.2 0.0 Total Financing Required Project Costs InvestmentCosts 78.4 227.1 144.1 81.4 34.8 5.7 0.0 RecurrentCosts 3.7 1.8 1.1 0.9 0.8 0.0 0.0 Total Project Costs 82.1 228.9 145.2 82.3 35.6 5.7 0.0 Interestduring 2.2 1.8 2.6 3.1 3.2 3.5 0.0 construction Front-endfee 2.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Financing 86.3 230.7 147.8 85.4 38.8 9.2 0.0 Financing IBRDIIDA 0.0 106.6 58.6 23.4 5.7 5.7 0.0 Government 71.7 138.7 89.2 62.0 33.1 3.5 0.0 Central 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Provincial 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Co-financiers 0.0 0.0 0.0 0.0 0.0 0.0 0.0 User FeeslBeneficiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - 63 -  Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Project Financing 71.7 245.3 147.8 85.4 38.8 9.2 0.0 Main assumptions: Table 1 Wuhan Municipal Finance @MBbillion, current terms) Table 2 Wuhan Public Transport Basic Data - 64 -  Annex 6(A): Procurement Arrangements CHINA:Wuhan Urban Transport Project Procurement ProcurementCapacityAssessmentReport Summaryof Findings - 1. Wuhan Municipal Govemment (WMG) is responsible for all project-related procurement activities. WMG has established a Project Office (WUTPO) under the Wuhan Urban Construction FundManagement Office (WUCFMO) to conduct the day-to-day management o fthe proposed project, and to coordinate with four sub-project offices: a sub-WUTPO inWuhan Bridge Construction Company for the civil work o f the road network development and roadmaintenance components; a sub-WUTPO in the traffic management bureau o f the WuhanPublic Security Bureau for the traffic management component; a s u b - W T P O inthe Wuhan Transport Commission for the public transport component; a sub-component inthe Wuhan UrbanManagement Bureau for roadmaintenance institutional strengthening part o froad maintenance component, and a sub-WUTPO inthe environment monitoring station for the environment monitoring component. Most procurement activities before contract award will be carried out by WUTPO andthe activities after contract awardwill be implementedby the four sub-WUTPOs. 2. As govemment institutions, WUTPO andthe four sub-WUTPOs have beenfully authorized and staffed to implement the project. WUTPO has accumulated experience on Bank procurement policies and procedures through project preparation and procurement for PHRD contracts. A training course on the Bank guidelines was conducted duringproject preparation. WUTPO is able to fulfill its procurement function with the support o f the municipal govemment, consultants and a procurement agent. 3. WUTPO has selected the China Intemational Tendering Company (CITC) as procurement agent for the project. Wuhan Municipal EngineeringDesign & Research Institution Company Ltd. (WMEDRIC) is the designer o f the project responsible for preparation o f the specifications and drawings o f the biddingdocuments. CITC was the procurement agent for other Bank financed urban transport projects. They are competent and experienced in Bank-financed procurement. 4. The Bank team assessmentidentified some shortcomings inthe general procurement framework in China, including some aspects o f the BiddingLaw for construction projects that became effective January 1,2000 and Government Procurement Law that became effective January 1,2003. The shortcomings include: 0 requirement for the purchaser to confirm inthe biddingdocuments that he possess or secure sources o f funding for procurement before bidding. 0 a broader range o f channels to announce the bidinvitation including newspapers, information networks, etc. 0 minimumtime for bidpreparation and submission of 20 days. 0 requirement for re-bidding iffewer than three bids are received. 0 requirement to rejectbids lower than cost, but without stipulating the method to determine the cost. 0 evaluation by scoring allowed. 5. One o f the concems identified during the assessment is the length o f GOC intemal review process for I C B goods procurement, both before the draft biddingdocuments are submitted to the Bank and - 65 -  before the bid evaluation reports are submitted to the Bank for review. The Mechanical and Electrical Product Import and Export Department (MEPIED) o f the Ministryo f Foreign Trade and Economic Cooperation (MOFTEC, which becomes Ministryo f Commerce after March 2003 by merging with State Economy and Trade Commission) is authorized to conduct such reviews. The review period can be lengthy when disagreements arise among the government agencies involved inthe review process. To mitigate this risk, procurement planning will need to incorporate additional time for the review processes. 6. These are country-wide issues which were addressed inthe OPR for China. Provisions will be incorporated into the Procurement Schedule o f the Loan Agreement to confirm exemptions for Bank financed procurement from the BiddingLaw and Government Procurement Law o f China incase o f discrepancies between the Bank Guidelines and the Laws. Wuhan Municipal Government and WUTPO are committed to following the Bank's guidelines. Wuhan Municipal Government will sign a supplementary letter (See Appendix 5 o f the assessmentreport for details) to the loan agreement, to this effect or incorporate it directly into the legal documents. 7. WUTPO has agreed to implement the recommendations inthe action plan o f the procurement assessment (discussed duringproject preparation) to strengthen the capacity o f implementing agencies, including the preparation and distribution o f a procurement manual to all procurement staff, on-the-job training, and occasional procurement seminars and workshops. The Bank will monitor procurement closely through its prior review procedures, seminars/workshops, supervision missions, and procurement post-review missions. 8. The risks inthe procurement process are considered to be average relative to other operations. An action planto further strengthen procurement management capacity was prepared by WUTPO and discussed duringpre-appraisal mission. Following action plan was incorporated into the PIP. Pronosed Action Plan Due Date Procurement staff shall be o n board inall Droiect imdementation agencies II 2003 Biddingdocuments for retroactive contracts shall be submitted to the bank for review I March. March-October, ASAP 2003 The procurement manual describing all the procurement procedures to be followed April ,2003 inBank-financed procurement andresponsibility o feach organization handling procurement shall be distributed to all procurement staff including staff for the easy reference. The procurement manual will be a part o f overall quality control system The WMCC, WUTPO would organize periodically, ,or send staff out, for From time to procurement training seminars, study tours and workshops for procurement staff and time other staff in implementing agencies, particularly for staff insub-WUTPO. On the job training shall be conducted for all staff from time to time to strengthen the agency's capacity to implement the procurement for the project. ProcurementArrangements 9. Procurement Plan. A procurement plan has been prepared using Microsoft Project and is included inthe Project ImplementationPlan(PIP). The procurement packagingplanhas beenpreparedtakinginto consideration the prospective capabilities o f the contractors and suppliers (both Chinese and intemational), as well as capabilities o f the employers project management. The procurement plan will be adjusted and updated annually to reflect the latest changes inthe project implementation schedule. - 66 -  10. Procurement procedures. The following Bank guidelines will govem all Bank-financed procurement under the project: 0 For goods and works. Procurement under IBRDLoans and IDA Credits (dated January 1995 and revisedinJanuary and August 1996, September 1997 and January 1999). 0 For the selection of consultants. Selection and Employment of Consultants by World Bank Borrowers (dated January 1997 and revised September 1997, January 1999 and May 2002). Formatof the Documentation. The following formats will apply: 11. Evaluationreports.The Bank's StandardBidEvaluationForm, Procurement ofGoods or Works (dated April 1996, translated into Chinese by MOF May 1997), and Sample Form o f Evaluation Report for Selection o f Consultants (dated October 1999). 12. ModelBiddingDocuments.The Bank-approved Chinese Model BiddingDocuments (MBD) (dated May 1997), preparedby MOF basedon the Bank's Standard BiddingDocuments (SBDs) will be adopted for all ICB and NCB activities for goods and works. 13. Revisionsto ModelBiddingDocuments.The amendmentsincludedinthe Bank's updated Standard BiddingDocuments (SBD) for Procurement of Goods (dated January 1995 and revisedMarch 2000 and January 2001, March 2003) and Works (dated May 2000 andrevisedMarch 2002, March 2003), which have not yet beenincludedinthe MBD, dated May 1997, will be incorporated into the biddingdocuments usedfor ICB goods and works contracts. WhenBank's new SBD for ICB Goods and Works based on Master Procurement Documents prepared by Multilateral Development Bank and Intemational Financing Institutions are issued, Chinese MBD (except NCB Goods and Works) will no longer to be used. 14. SBD for Supply and Installation of Plant and Equipment, November 1997, revisedJanuary 1999, March 2003 will be usedfor procurement o f the area traffic control system. 15. PrequalificationDocuments for Procurement o f Works and User's Guide datedNovember 2002 basedon Master Procurement Documents prepared by Multilateral Development Bank and Intemational Financing Institutions, Standard Requestfor Proposals, etc. will be usedfor large civil works ICB contracts above US$ 15 million. 16. DomesticPreference. For goods contracts, qualified domestic bidderswill be eligible for a preference equal to 15 percent of the cost, insurance and freight (CIF) price, or the sum of the customs duties and importtax payable by anonexempt importer, whichever is less. For works, there will be no preference for domestic contractors as China GDIhas exceededthe Bank determinedthreshold. 17. Advertisement. The General Procurement Notice (GPN) was publishedinthe UnitedNations Development Business (UNDB), Issue No. 596 o f December 16,2002. Specific Procurement Notices (SPNs) for all ICB andNCB procurement activities will be publishedinat least one newspaper with a national circulation inaddition to UNDB and dgmarket.com for all ICB contracts. The ICB bidders will be allowed at least 6 weeks for bidpreparation (8 weeks for contracts above US$15 million). Similarly, - 67 -  invitations for expressions o f interest for consulting contracts expected to cost more than US$200,000 equivalent will also be advertised inthe UNDB at least 14 days before the preparation o f the short list. 18. The specific procurement notice for N C B civil works above US$2 million, NCB goods above US$200,000 and all consulting services under QCBS/QBS procedures shall be published in a national newspaper. The specific procurement notice for N C B civil works below US$2 million, and NCB goods below US$200,000 may be published ina provincial or municipal newspaper. ProcurementMethods(Table A) 19. A total ofUS$334.5 million o fworks and goods is expectedto be financed under the project, using the following procedures: Works :(US314 million,includingcontingencies) 20. ICB. About US$54.1 milliono fworks will be procured usingICB procedures. This represents 17 percent o f total works procurement. The bidders for these larger works contracts will be prequalified. 21. NCB.About US259.8 milliono f other civil works estimatedto cost below US$15 million will be procured using N C B procedures. Such contracts will not be o f interest to foreign contractors and bidders will be post qualified. 22. The contract packaging was determined taking into consideration construction time, availability o f detailed designs and counterpart funds, the need to accommodate existing heavy traffic and traffic management during the construction period, resettlement, andrelocation o f underground utilities. The contracts will be bid on a slice-and-package basis; qualified f m s will be allowed to bid for more than one contract. Each ICB contract for works will provide for a dispute review board or dispute review expert inthe standard biddingdocuments (referred to inparagraph 2.42 o f Guidelines: Procurement under IBRDLoans and IDA Credits) 23. Itwas agreed that special attention would be paidto the design of specialist works such as railway flyovers or underpasses, traffic signs, road markings, power supply and street lighting, noise barriers, landscaping and greening, and relocation o f under street services lines (for power, telecommunication, gas, CCTV, water, or wastewater). These works will be included inthe civil work contracts to the extent possible. However, ifthe prime contractor does not have the experience or the necessary qualifications, the works shall be carried out by specialist sub-contractors and experience and qualification o f specialist sub-contractors shall be stated inthe bids submitted by prime contractors. Goods:(US$30.5million, includingcontingencies) 24. ICB. About US$27 millionworth o fequipment estimated to cost US$500,000 or more per contract will be procured using I C B procedures. This represents about 88 percent o f total procurement o f goods, some o f which will be combined with installationservices. 25. NCB. About U S 2 . 9 millionworth o f equipment estimated to cost US$lOO,OOO or more but less thanUS$500,000 per contract will be procuredusingNCB procedures. These contracts will not be o f interest to foreign suppliers. - 68 -  26. Shopping.Other minor items (US$600,000) which are readily available off-the-shelf and estimated to cost less than $100,000 per contract, will be procured following Shopping procedures on the basis o f a comparison o f at least three quotations at competitive prices and may be usedwhere the desired goods are ordinarily available from mor6 than one source, as stated inArticles 3.5 and 3.6 o f the guidelines. Consultants(US $7.5 million,includingtraininghtudy toudseminars): 27. This component includes consultant services and overseas traininghtudy tours for an estimated US$7.1million. (There are 2 type overseas traininghtudy tours inthe Procurement Plan: one is the overseas traininghtudy tours as a part o f consultant services contracts for research and management etc; the other is the stand along overseas traininghtudy tours organized by agents through selection procedures o f QCBS. So the cost o f all overseas traininghtudy tours i s included inthe consultant contracts. However, the overseas trainindstudy tours may be conducted inthe same way as for domestic traininghtudy tour during the implementation.) As for the domestic seminars, training and study tours, there will be no contracts signed. The cost o f domestic trainindstudy toursheminars will be reimbursed against receipts for an estimated US$400,000. Consultants financed by the Bank and required for research, construction supervision, overseas training and study tours will be selected and employed under QCBS/QBSLCS/CQ/SSS/IC (Individual Consultants) procedures. 28. QCBS/QBS/LCS: Consulting services from f m s with an estimated contract value of US$lOO,OOO or more to a total value o f US$6.1 millionwill be procured through Quality- and Cost-Based Selection (QCBS - about US$ 5.3 million) or Quality-Based Selection (QBS-about US$ 400,000) or Least Cost Selection (LCS-about US$400,000 for contracts less than $200,000 each). 29. CQ/SSS/IC: Consultant services from firms with an estimated contract o f less than US$lOO,OOO to a total value of US$600,000 will be selected through Consultant's Qualification selection (CQ). Some services with an estimated contract o f less than US$lOO,OOO up to a total value o f US$200,000 in amount may, with the Bank's prior agreement, be procuredby Single-Source Selection (SSS) in accordance with the provisions o f paragraphs 3.8 through 3.11 o f the Consultant Guidelines. Services o f individual Consultants (IC) with an estimated contract o f about US$200,000, will be procured in accordance with the provisions o f paragraphs 5.1 through 5.4 o f the Consultant Guidelines. 30. Local Training and StudyTours: About US$400,000 will be spent on local training and study tours. 3 1. Local consultants from various independent universities and institutes will be usedto the extent possible ensuring that eligibility requirements stated inthe Guidelines are met and their participationis consistent with Bank requirements on hiringuniversities and institutes. The threshold for shortlist o f only national consultants will be $300,000 or less. Advance Contracting 32. WUTPO has requested advance contracting and retroactive financing for the first year construction after June 16,2003. Expenses to be incurred inadvance by the implementing agency are estimated at less than US$15 million. These expenses include eleven N C B works contracts, one N C B goods contract, and seven Shopping contracts, and consultant services and traininghtudy tours o f nine contracts. All ' these contracts are eligible for retroactive financing by the Bank. Bank procurement guidelines have been strictly followed as innormal operations for all advance contracting activities. - 69 -  Procurement methods (Table A) 33. Table 1 lists major contracts, their estimated value, scheduled start, andprocurement method; Table A lists costs and financing by procurement method; Table A1 list consultant selection arrangements. Table A: Project Costs by ProcurementArrangements (US$ million equivalent) (0.00) (0.00) (0.00) (0.00) (0.00) 6. Interest during 0.00 0.00 0.00 16.40 16.40 construction (0.00) (0.00) (0.00) .(O.OO) (0.00) 7. Front-end fee 0.00 0.00 2.00 0.00 2.00 (0.00) (0.00) (2.00) (0.00) (2.00) Total 81.10 262.70 10.10 244.30 598.20 (52.10) (138.50) (9.30) (0.00) (199.90) liFigures inparenthcses are thc amounts to be financcd by the Bank Loan. All costs includc contingencies Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff o f the project management office, training, technical assistance services, and incremental operating costs related to (i)managing the project, and (ii) re-lending project funds to local government units. - 70 -  Table A I : Consultant Selection Arrangements (optional) (US$ million equivalent) IIncluding contingencies Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines), Commercial Practices, Single Source Selection, Domestic Training and Study Tours etc. N.B.F. = Not Bank-financed Figures in parentheses are the amounts to be financed by the Bank Loan. -71 -  Prior review thresholds (Table B) Prior Reviewsrequired by the Bank: 1. Prior review procedures will be usedfor civil works contracts with an estimated cost o f US$4 million or more, goods contracts with an estimated cost o f US$400,000 or more and consulting services with an estimated contract cost o f US$200,000 or more for firms and US$50,000 or more for individuals. This will apply to 82 percent o f the total contract values o f works, 90 percent o f the total contract values o f goods and 72 percent o f the total contract values o f services financed by the Bank. Single-source selections, regardless o f the value of the contract, will be subject to the Bank'sprior review. The first contract o f any type including the first contract for NCB, Shopping, QCBS/QBS/LCS, CQ/SSS and individual consultants will also be submitted to the Bank for prior review. All other contracts for works, goods andservices will be subject to ex post review. About 33% of such contracts will be sampled for ex post review. - 72 -  Iftheprocurementundertheproject follows the Bank's procurement policyduringthe 18months implementation period (Jan. 1,2004 to June 30,2005), and subject to the Bank'sreview and final agreement, the prior reviewthresholds couldbe increased to $5 million for works, $500K for goods, $350K for consultant firm and $100K for individual consultants after July 1, 2005. Table B: Thresholds for Procurement Methods and Prior Review' 1.Works >15,000 ICB All contracts ($54 million), Prior review threshold < 15,000 NCB All contracts above $4 >US$4 million million. ($208) 2. Goods L 500 ICB All contracts ($27 million) Prior review threshold <500 NCB All contracts above >US$400thousands $400,000 Shopping ($430.000) 3. ServicesPrior review ><loo 100 QCBS/QBS/LCS All contracts above threshold: $200,000 >US$200 thousands for firm CQ ($4.6 million ) >US$50 thousands for < 100 Single source All contracts ($0.2 million) individualconsultant Individual Consultants All contracts above $50,000 ($0.2 million ) Total value of contracts subject to prior review: US$282 million Overall Procurement Risk Assessment: Average Frequency of procurementsupervision missionsproposed: One every 6 months (includes special procurement supervision for post-review/audits) Most of the procurement prior review will be handledby procurement specialists of the Bank's Beijing office (WBOB), while post reviewmay be out sourced to independent consultants by WBOB. 1\Thresholds generally differ by country andproject. Consult 'Rssessment o f Agency's Capacity to Implement Procurement" and contact the RegionalProcurement Adviser for guidance. -73-  Annex 6(B): Financial Managementand Disbursement Arrangements CHINA: Wuhan UrbanTransport Project FinancialManaPement 1. Summaryof the FinancialManagementAssessment The task team conducted an assessmento fthe adequacy o f the project financial management system of the Wuhan Urban Transport Project (WUTP) (complete FM assessment report i s available inproject file). The assessment, based on guidelines issued by the Financial Management Sector Board on June 30, 2001, concluded that the project meets minimumBank financial management requirements, as stipulated inBP/OP 10.02. Inthe team opinion, the project will have inplace an adequate project financial management system that can provide, with reasonable assurance, accurate and timely information on the status o f the project inthe reporting format agreed with the project and as required bythe Bank. Fundingsources for the project include the Bank loan and counterpart funds. The Bank loan agreement will be signed between the Bank and the People's Republic o f China through its Ministryo f Finance (MOF), and on-lend agreement will be entered between MOF and the Government o f Hubei province through its Hubei Provincial Finance Bureau (HPFB), HPFB and Wuhan Municipal Finance Bureau (WMFB) and Wuhan Urban Construction Utilizationo f Foreign Investment Project Management Office (WUCUFIPMO). The Bank loan proceeds will flow from the Bank to HPFB (where the special account for the project will be set up), to WMFB, to WUCUFIPMO and/or to contractors or suppliers via bank accounts with major commercial banks acceptable to the Bank. Disbursement will be based on the traditional disbursement techniques and will not be using PMR-based disbursements, in accordance with the agreement betweenthe Bank and MOF. The counterpart funds will be contributed directly to WUTP, mainly by the government o f Wuhan Municipality. N o outstanding audits or audit issues exist with any o f the implementing agencies involved inthe proposed project. The task team however will continue to be attentive to financial management matters and audit covenants during project supervisions. Country Issues To date, no CFAA has beenperformed for China, though dialogue with the Government o f China in respect to the CFAA exercise has been initiated and is underway. The planned approach to CFAA is to buildon the Asian Development Bank study of FinancialManagement and Governance Issues inChina in2000, analyze areas that have changed significantly inthe past few years or that deserve further scrutiny, and over time cover all major areas usually assessedas part o f a full C F A A exercise. Currently, for reference purpose, the Bank relies on the study conducted by the Asian Development Bank. Nevertheless, based o n observations o f developments inthe areas o f public expenditures, accounting and auditing, and Bank experience with China projects for the past few years, we note that substantial achievement inthe aforementioned areas has beenmade and further improvement is expected inthe next few years. As the economic reform program further unfolds, the Government o f China has come to realize the importance o f establishing and maintaining an efficient and effective market mechanism to ensure transparency and accountability, and minimize potential fraud or corruption. - 74 -  Due to a rather unique arrangement by the Government o f China, funding (inparticular Bank loans) o f Bankprojects is controlledand monitoredbyMOFand its extensions, i.e. finance bureaus at provincial, municipaVprefecture and county level. However, project activities are usually carried out by implementing agencies o f a specific industry or sector due to the nature of the technical expertise involved. The above arrangement usually requires closer coordination on the project, otherwise, the multi-level management o f the funding and implementation mechanism sometimes work to the detriment o f smooth project implementation. As such, this assessment focuses on Hubei Provincial Finance Bureau, which will handle Special Account activity for the project, and the Wuhan Project Management Office, which will be responsible for implementing various components o f the project. Strengths HPFB and WMFB have had prior Bank project experience and are expected to play a major role inthe project financial management aspect, and are familiar with Bank policies, procedures and requirements. Weaknesses: (1) WUCUFIPMO has no prior management experience with Bank projects; close monitoring and training will be provided by WBOB, HPFB and WMFB (2) Change o f current project organization structure is expected; the WUCUFIPMO agrees to inform the Bank o f such change by appraisal. Implementing Entity Provincial Project Leading Group (PPLG). The PPLG is chaired by the Vice Govemor o f Hubei province. The purpose o f the PPLG is to coordinate between differentprovincial governmental agencies, including Hubei Provincial Development and Planning Commission, Hubei Provincial Construction Commission, HPFB and Hubei Provincial Environment Protection Bureau. Municipal Project Leadinggroup (MPLG). The MPLGis chaired by the Mayor o fWuhan municipality. Purpose o f M P L G is to coordinate between different municipal governmental agencies, including Wuhan Municipal Development and Planning Commission, Wuhan Provincial Construction Commission, WMFB and Wuhan Provincial Environment Protection Bureau. Project Manugement Ofice. WUCUFIPMO will work as the Project Management Office (PMO) for the project, assuming direct implementation and coordinationresponsibility. Though WUCUFIPMO is expected to be merged into another organization inthe near future. However, it is expected that it will remain as the executing agency for the entire project implementation. HPFBis expected to play a major role inproject implementation, including overall monitoring, financing arrangement, procurement, and financial management. HPFB will also be responsible for maintaining, monitoring and reconciling project special account, which will be set up inand kept by HPFB. HPFB and WMFB will be responsible for reviewing, verifying and approving withdrawal applications prepared by WUCUFIPMO before HPFB submits them to the Bank for disbursement processing. HPFB and WMFB have had prior experience with the Bank projects and are familiar with Bankdisbursement procedures. Funds Flow a) Bank funds will flow from the Bank to the special accounts to be set up for the project, and/or contractors or suppliers. The special account will be set up in andmanaged by HPFB. On-lending agreements will be signed between MOF and HPFB, between HPFB andWMFB, and between WMFB and WUCUFIPMO. - 75 -  Thc 1IPFB WMFB World + Bank b) Counterpart funds will be contributedby WMFB directly to WUCUFIPMO. Staffing Adequate project financial and accounting staff with educational backgroundand work experience commensurate withthe work they are expected to perform is one o f the factors critical to successful implementation o fproject financial management. Based on discussions, observation and review o f educational backgroundandwork experience o f the staff identified for financial and accounting positions, the task team noted that they are appropriate for the work they are expected to assume. However, considering that most financial staff do not have the accounting related education background, more training and guidance will be required. The task team has advised WUCUFIPMO that adequate and qualified project financial and accounting staff should be identified prior to Board presentation and inplace before effectiveness. Accounting staff inWUCUFIPMO has no prior experience with projects financed by the Bank. To strengthen financial management capacity and achieve consistent quality o f accounting work, the task term has suggested that a well defined and focused training inproject financial management should be provided by WUCUFIPMO, HPFB and WMFB prior to effectiveness to all key financial and accounting staff to ensure good understanding o f the Bank policies and procedures. Inaddition, inorder to provide easy andreadily available reference, WUCUFIPMO has submitted to the task team a draft project financial management manual (FMManual), which provides detailed guidelines on financial management, intemal controls, accounting procedures, fund and asset management and withdrawal application procedures. After review, the manual has been accepted by the Bank. The task team recommendedthat the manual be distributed to all the financial staff as soon as possible. Accounting Policies and Procedures The administration, accounting and reporting o f the project will be set up inaccordance with the following regulationdcirculars issued by MOF: a) Inline with other Bank financed projects in China, the project will use the "Temporary Regulations o n Financial and Accounting Management for Projects Financed by the World Bank" (Circular #127 issued in 1993) by MOF as a basis for bookkeeping and preparation o f project financial statements and management reports. Accrual accounting and double entry bookkeepingbasis will be adopted by the Project. - 76 -  b) Circular 12: "Regulation for the Submission o fWithdrawal Applications" issued in December 1996 by MOF - includes detailed procedures for preparing and submittingwithdrawal applications and retention o f supporting documentation. c) Circular #13: "Accounting Regulations for World Bank Financed Projects" issued inJanuary 2000 by MOF. The circular provides in-depthinstructions of accounting treatment ofproject activities and covers the following: (i) Chart o f account; (ii) Detailed accounting instructions for each project account; (iii)Standard set o f project financial statements; and (iv) Instructions on the preparation o f project financial statements. The standard set o f project financial statements mentioned above has been agreed to between the Bank and MOF and applies to all Bank projects appraised after July 1, 1998 and includes the following: (i) Balance sheet; (ii) Statement o f source and use o f fund; (iii) Statement o f implementation o f loan agreement; and (iv) Statement o f special account. Both circular #127 and #13 are simplified versions o f the Accounting Standards for State-owned, Infrastructure Oriented Projects (the "Standards"), taking into consideration unique characteristics o f Bank projects. The Standards are modeled after the principles o f Intemational Accounting Standards and provides detailed guidelines appropriate to accounting for activities o f Bank projects. WUCUFIPMO will be managing, monitoring and maintaining project accounting records. Original supporting documents for project activities will also be retained by WUCUFIPMO. Inaddition, WUCUFIPMO will prepare its financial statements, including statements o f the special account to be prepared by HPFB, and send them to the Bank for review and comment on a regular basis. internalAudit There will be no intemal audit department or arrangement inthe WUCUFIPMO. However, HPFB and WMFB will serve a similar function throughregular checking. The Bank task team will also conduct regular supervision missions throughout the life o f the project. Reporting and Monitoring and Format of Financial Statements The format and content o f the following project financial statements represent the standard project reporting package agreed to between the Bank and MOF. They have been discussed and agreed with all parties concemed. The project consolidated financial statements will be submitted as part o f the Financial Monitoring Report to the Bank on a semi-annual basis (prior to August 15 and February 15 o f the subsequent year) and include the following four statements: (i) Balance Sheet; (ii) Summary o f Sources and Uses o f Fundsby Project Component; (iii) Statement o f Implementation o f Loan Agreement; and (iv) Statement o f Special Account. information Systems The accounting s o h a r e "Yongyoull, the most popular accounting software in China, has been selected byWUCUFIPMO for project financial management. This choice is acceptable to the Bank. Supervision Plan Duringthe initial implementationphase, frequent FMsupervision missions (twice a year) should be carried out to have better coverage and to ensure that procurement guidelines are followed and expenditures incurred are eligible and well supported. More detailed reviews at the initial implementation phase can also help ensure that financial management system is properly set up and financial statements are prepared in line with stipulated format and content. The FMmission - 77 -  frequency can subsequently be reduced from midpoint to the normal level (once a year). Inorder to maximize effectiveness and efficiency, procurement and FMDisbursement specialists shouldjointly participate insupervision missions for procurement and SOEs reviews. 2. Audit Arrangements The Bank requires that project financial statements be audited inaccordance with standards acceptable to the Bank. Inline with other Bank financed projects inChina, the project will be audited in accordance with the Government Auditing Standards o f the People's Republic o f China (1997 edition). The Hubei Provincial Audit Bureau (HPAB) has been identified as the auditor for the project. Audit fieldwork will be carried out by Wuhan Municipal Audit Bureau (WMAB), further reviewedby HPAB, and the final audit report issued inthe name o f H P A B under the guidance and supervision o f the China National Audit Office (CNAO). The Bank currently accepts audit reports issued by CNAO (or its local counterpart) for which CNAO is ultimately responsible. Audit reports on annual project consolidated financial statements will be due to the Bank within 6 months o f the end o f each calendar year, with a separate opinion on Statement o f Expenditures and Special Account. The Bank requires that project financial statements be audited inaccordance with standards acceptable to the Bank. Inline with other Bank financed projects inChina, the project will be audited in accordance with the Government Auditing Standards o f the People's Republic o f China (1997 edition). The Hubei Provincial Audit Bureau (HPAB) has been identified as the auditor for the project. Audit fieldwork will be carried out by Wuhan Municipal Audit Bureau (WMAB), hrtherreviewedby HPAB, and the final audit report issued inthe name o f H P A B under the guidance and supervision o f the China National Audit Office (CNAO). The Bank currently accepts audit reports issued by C N A O (or its local counterpart) for which CNAO is ultimately responsible. Audit reports on annual project consolidated financial statements will be due to the Bank within 6 months o f the end o f each calendar year, with a separate opinion on Statement o f Expenditures and Special Account. 3. Disbursement Arrangements The project disbursement will be based on the traditional disbursement techniques and will not use Project Management Report (PMR) based disbursements, inaccordance with the agreement between the Bank and MOF. The planned disbursement categories are expected to be as follows: (i)Civil Works; (ii) (iii) Goods; Consultancy Services and Training; and (iv) Unallocated. However, the amount and disbursement percentages are not decided yet. WUCUFIPMO is expected to provide detailed information on these aspects before appraisal. - 78 -  Allocation of loan proceeds (Table C) Table C: Allocation of Loan Proceeds Expenditure Category Amount in US$million Financing Percentage Civil Works 157.40 52% Goods 28.20 100%of foreign expenditures, 100%of local expenditures (ex-factory cost) and 75% o f local expenditures for other items procured locally Consultants' Services and Training 6.60 91% Unallocated I 5.80 Total Project Costs with Bank I 198.00 II Financing Interest during construction 0.00 Front-end fee 2.00 Total I 200.00 I Use of statements of expenditures (SOEs): Disbursementmethods, such as replenishment,direct payment and special commitment, will be available for the project. The SOE limitswill be set up inline with procurement post-review threshold as follows: (i) all contract for goods estimated to cost less than the equivalent o f $400,000; (ii) all contract for civil works estimated to cost less than the equivalent o f $4,000,000 (iii) consultant contract estimated to cost less than $200,000 for firms and less than $50,000 for individuals. Special account: One Special Account (SA) will be set up inand managedby HPFB for the project. HPFB will be directly responsible for the management, monitoring, maintenance and reconciliation of the SA activities o f the project. Supporting documents requiredfor Bank disbursementswill be prepared and submittedby WUCUFIPMO to WMFB and onto LPFB for verification, consolidationand approval. HPFB will be responsible for sendingwithdrawal applications to the Bank for disbursement processing. The SA authorizedallocation is set at $12,000,000, corresponding (on average) to about four months expenditures of the project. The flow o f withdrawal application is as follows: WUCUFIPMO WMFB HPBF World Bank -79 -  Annex 7: Project Processing Schedule CHINA: Wuhan Urban Transport Project ITime taken to prepare the project (months) 1 I I IFirst Bank mission (identification) 07110/2000 07/10/2000 IAppraisal mission departure II 03/24/2003 II II ~~~~ ~ Negotiations 05/12/2003 Planned Date of Effectiveness Prepared by: Wuhan Municipal Government Project Executive Office Preparation assistance: Japanese PHRD Grant Bank staff who worked on the proiect included: . . Name Speciality EdwardDotson, EASTR Task Team LeadermrbanTransport ZongYan, WBOB Urban Transport Shomik Mehndiratta, EASTR Urban Transport Richard Scurfield, TUDTR Former Task Leader, Sector Leader, Transport Maria Luisa Juico, EASTR Program Assistant Dong Wenyan, WBOB Program Assistant Daniel Gibson, WBOB Social Scientist Ani1 Somani, EASES Environment Yang Dawei, WBOB Procurement Sun Chongwu, WBOB Environment LiuZhefu, WBOB Social Development LiNinghui, WBOB Financial Management LiuZhi, SASE1 Transport Economics KarinNoordlander Lawyer Gladys Frame Traffic Management GordonNeilson Public Transport Rod Stickland Transport Planning - 80 -  Annex 8: Documents in the Project File* CHINA: Wuhan Urban Transport Project A. Project Implementation Plan Project ImplementationPlan: The first Chinese versionwas draftedinDecember, 2002. The final English and Chinese versions will be completedby the Appraisal (End of March, 2003) B. Bank Staff Assessments Aide-Memoires from the following Bankmissions: March 2001, July 2001 Identification Mission, October 2001, January 2002, March2002, June 2002, September 2002, October 2002, December2002 Pre-AppraisalMission, February 2003, March 2003 Appraisal Mission. C. Other 1. Documents for assessment: EnvironmentalImpactAssessment Report * February 2003 Resettlement Action Plan * November 2002 Procurement Assessment Report March2003 Financial Management Report March 2003 2. ProjectPreparation Documents inboth Chinese and English: Wuhan transport forecastingmodel (2001.7, 2002.6,2002.11) Wuhan UrbanTransport Strategy Study (2001.7,2002.6, 2002.11) Feasibility study for roadinfrastructurecomponent (2001.7,2002.6, 2002.11) Feasibility study for traffic management development (2001.7,2002.6,2002.11) Feasibility study for public transportproject component(2001.7) Feasibility study for roadmaintenance component(2001.7,2002.6,2002.11) Wuhan urbantransportproject preparationplan (2001.7) Wuhan municipal finance and counterpartfunding in Chinese only (2002.3,2002.11) First year civil work preliminary design under the infrastructure component (2002.6) Projectpreparationplan - inChinese only (2002.11) *Including electronic files - 81 -  Annex 9: Statement of Loans and Credits CHINA: Wuhan Urban Transport Project 03-Feb-2004 Difference between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm Rev'd PO65463 2004 CN Jiangxi Integrated Agric. Modern. - 100.00 0.00 0.00 0.00 100.00 0.75 0.00 PO65035 2004 CN-Gansu 8 Xinjiang Pastoral Development 66.27 0.00 0.00 0.00 65.61 3.88 0.00 PO66955 2004 CN-Zhejiang Urban Envmt 133.00 0.00 0.00 0.00 133.00 0.00 0.00 PO73002 2004 CN-Basic Education in Western Areas 100.00 0.00 0.00 0.00 100.00 0.00 0.00 PO77615 2004 CN-GEF-Gansu 8 Xinjiang Pastoral Develop 0.00 0.00 10.50 0.00 10.50 0.70 0.00 PO67337 2003 CN-2nd GEF Energy Conservation 0.00 0.00 26.00 0.00 15.00 15.98 0.00 PO40599 2003 CN-TIANJIN URB DEV II 150.00 0.00 0.00 0.00 150.00 0.00 0.00 PO58847 2003 CN-3rd Xinjiang Hwy Project 150.00 0.00 0.00 0.00 106.13 6.55 0.00 PO68058 2003 CN-Yixing Pumped Storage Project 145.00 0.00 0.00 0.00 140.95 1.47 0.00 PO76714 2003 CN-Anhui Hwy 2 250.00 0.00 0.00 0.00 250.00 13.42 0.00 PO70441 2003 CN-Hubei Xiaogan Xiangfan Hwy 250.00 0.00 0.00 0.00 178.66 -3.01 0.00 PO70191 2003 CN-SHANGHAI URB ENVMT APLI 200.00 0.00 0.00 0.00 200.00 0.00 0.00 PO64729 2002 CN-SUSTAINABLE FORESTRY DEV. PROJECT 93.90 0.00 0.00 0.00 80.48 3.65 0.00 PO58846 2002 CN-Natl Railway Project 160.00 0.00 0.00 0.00 37.23 -2.35 0.00 PO71147 2002 CN-Tuberculosis Control Project 104.00 0.00 0.00 0.00 92.67 .11.33 0.00 P060029 2002 CN-Sustain. Forestry Dev(Natura1Forest) 0.00 0.00 16.00 0.00 17.68 2.60 0.00 PO70459 2002 CN-Inner Mongolia Hwy Project 100.00 0.00 0.00 0.00 88.82 5.15 0.00 P068049 2002 CN-Hubei Hydropower Dev in Poor Areas 105.00 0.00 0.00 0.00 87.89 10.72 0.00 P058845 2001 Jiangxi II Hwy 200.00 0.00 0.00 0.00 133.42 5.08 0.00 PO56199 2001 CN-3rd Inland Waterways 100.00 0.00 0.00 0.00 84.12 7.62 0.00 PO56516 2001 CN WATER CONSERVATION 74.00 0.00 0.00 0.00 41.42 8.46 0.00 ~ PO56596 2001 CN-Shijiazhuang Urban Transport 100.00 0.00 0.00 0.00 88.58 53.81 0.00 PO47345 2001 CN-HUAi RIVER POLLUTION CONTROL 105.50 0.00 0.00 0.00 90.68 -14.82 0.00 PO51859 2001 CN-LIAO RIVER BASIN 100.00 0.00 0.00 0.00 80.23 35.23 0.00 PO45915 2001 CN-Urumqi Urban Transport 100.00 0.00 0.00 0.00 52.54 46.04 0.00 PO45910 2000 CN-HEBEI URBAN ENVIRONMENT 150.00 0.00 0.00 0.00 123.53 48.03 0.00 PO49436 2000 CN-CHONGQING URBAN ENVMT 200.00 0.00 0.00 3.70 161.67 64.70 0.00 PO56424 2000 TONGBAI PUMPED STORA 320.00 0.00 0.00 100.00 164.64 97.81 0.00 PO45264 2000 CN-SMALLHLDR CATTLE DEV 93.50 0.00 0.00 0.00 14.62 8.34 0.00 PO42109 2000 CN-BEIJING ENVIRONMENT iI 349.00 0.00 25.00 0.00 294.22 183.70 0.00 PO58844 2000 3rd Henan Prov Hwy 150.00 0.00 0.00 0.00 67.17 29.51 0.00 PO58843 2000 Guangxi Highway 200.00 0.00 0.00 0.00 105.76 46.76 0.00 PO64924 2000 CH-GEF-BEIJINGENVMT iI 0.00 0.00 25.00 0.00 26.26 18.43 2.20 PO64730 2000 CN Yangtze Dike Strengthening Project - 210.00 0.00 0.00 0.00 114.03 94.03 0.00 PO50036 1999 Anhui Provincial Hwy 200.00 0.00 0.00 9.60 43.79 40.39 0.00 PO51705 1999 Fujian Ii Highway 200.00 0.00 0.00 0.00 65.86 62.53 0.00 PO51856 1999 ACCOUNTING REFORM 8 DEVELOPMENT 27.40 5.60 0.00 0.00 19.24 19.16 0.00 PO41268 1999 CN-Nat HwyUHubei-Hunan 350.00 0.00 0.00 0.00 59.72 34.72 0.00 PO57352 1999 CN-RURAL WATER IV 16.00 30.00 0.00 0.00 21.84 15.42 7.68 PO58308 1999 CN-PENSION REFORM PJT 0.00 5.00 0.00 0.00 1.77 1.75 0.00 PO56216 1999 CN LOESS PLATEAU II - 100.00 50.00 0.00 0.00 29.24 31.38 0.00 PO60270 1999 CN-ENTERPRISE REFORM LN 0.00 5.00 0.00 0.00 2.71 4.29 4.07 PO38121 1999 CN-GEF-RENEWABLE ENERGY DEVELOPMENT 0.00 0.00 35.00 0.00 28.58 26.50 7.57 PO51888 1999 CN GUANZHONG IRRiGATiON - 80.00 20.00 0.00 0.00 38.11 30.52 0.00 PO49665 1999 CN-ANNINGVALLEY AG.DEV 90.00 30.00 0.00 0.00 21.33 11.52 0.00 PO46051 1999 CN-HIGHER EDUC. REFORM 20.00 50.00 0.00 0.00 5.70 7.31 0.00 PO43933 1999 CN-SICHUAN URBAN ENVMT 150.00 2.00 0.00 0.00 93.14 77.33 23.93 P042299 1999 TEC COOP CREDIT IV 10.00 35.00 0.00 0.00 36.14 -10.18 0.00 PO41890 1999 CN-Liaoning Urban Transport 150.00 0.00 0.00 0.00 36.96 36.96 0.00 P036953 1999 CN-HEALTH IX 10.00 50.00 0.00 0.00 37.49 22.26 0.00 PO03653 1999 CN-Container Transport 71.OO 0.00 0.00 18.61 3.62 22.19 0.66 PO46829 1999 RENEWABLE ENERGY DEVELOPMENT 100.00 0.00 0.00 0.00 12.87 99.87 6.07 PO46564 1999 CN Gansu 8 Inner Mongolia Poverty Red. - 60.00 100.00 0.00 13.30 49.81 38.19 -3.54 - 82  Difference between expected and actual Original Amount in US$ Millions disbursements' Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Orig Frm Rev'd PO03614 1998 CN-Guangzhou City Transport 200.00 0.00 0.00 20.00 100.31 120.31 100.31 PO03606 1998 ENERGY CONSERVATION 63.00 0.00 22.00 0.00 36.22 18.22 0.00 PO35698 1998 HUNAN POWER DEVELOP. 300.00 0.00 0.00 145.00 31.45 172.70 -22.46 P049700 1998 CN- IAIL-2 300.00 0.00 0.00 0.00 4.52 4.52 0.60 PO37859 1998 CN-GEF Energy Conservation 0.00 0.00 22.00 0.00 0.44 22.06 0.00 PO03619 1998 CN-2nd Inland Waterways 123.00 0.00 0.00 17.00 39.18 54.12 4.29 PO40185 1998 CN-SHANDONG ENVIRONMENT 95.00 0.00 0.00 1.40 20.07 21.47 -0.79 PO03566 1998 CN-BASIC HEALTH (HLTH8) 0.00 85.00 0.00 0.00 39.66 23.29 0.00 P046563 1998 CN - TARIM BASIN II 90.00 60.00 0.00 2.67 14.78 16.58 0.00 P045788 1998 Tri-Provincial Hwy 230.00 0.00 0.00 0.00 19.81 15.98 0.00 PO03539 1998 CN SUSTAINABLE COASTAL RESOURCES DE . 100.00 0.00 0.00 2.06 47.54 45.44 33.72 PO51736 1998 E. CHINNJIANGSU PWR 250.00 0.00 0.00 86.00 51.14 137.14 11.55 PO46952 1998 CN FOREST. DEV. POOR AR . 100.00 100.00 0.00 0.00 40.02 -61.48 17.91 P036949 1998 CN-Nat Hwy3-Hubei 250.00 0.00 0.00 0.00 21.15 21.15 0.00 PO36414 1998 CN-GUANGXI URBAN ENVMT 72.00 20.00 0.00 0.00 71.56 65.25 23.72 PO03637 1997 CN-NATL RURAL WATER 3 0.00 70.00 0.00 0.00 0.00 3.20 2.78 PO03590 1997 CN QlNBA MOUNTAINS POVERTY REDUCTIO - 30.00 150.00 0.00 0.00 13.16 16.34 -3.28 PO35693 1997 FUEL EFFICIENTIND. 0.00 0.00 32.80 0.00 7.62 32.81 0.00 PO03654 1997 Nat HwyZiHunan-Guangdong 400.00 0.00 0.00 0.00 48.52 48.52 16.70 PO03650 1997 TUOKETUO POWERilNNER 400.00 0.00 0.00 102.50 37.37 139.87 25.18 PO38988 1997 CN HEILONGJIANG ADP - 120.00 0.00 0.00 0.00 7.85 7.85 3.84 PO44485 1997 SHANGHAI WAIGAOQIAO 400.00 0.00 0.00 0.00 85.11 55.33 39.65 PO36405 1997 CN WANJlAZHAl WATER TRA ~ 400.00 0.00 0.00 75.00 22.58 97.58 5.00 PO03602 1996 CN-HUBEI URBAN ENVIRONMENT 125.00 25.00 0.00 28.32 39.72 70.08 29.74 PO03599 1996 CN-YUNNAN ENVMT 125.00 25.00 0.00 19.48 40.68 61.92 8.06 PO40513 1996 2nd Henan Prov Hwy 210.00 0.00 0.00 19.00 16.69 35.69 22.69 PO03594 1996 CN GANSU HEXI CORRIDOR . 60.00 90.00 0.00 0.00 73.92 58.83 0.00 PO03589 1996 CN-DISEASE PREVENTION (HLTH7) 0.00 100.00 0.00 0.00 3.08 12.18 0.00 PO34618 1996 CN-LABOR MARKET DEV. 10.00 20.00 0.00 0.00 5.60 7.77 0.00 P003648 1996 CN-SHANGHAI SEWERAGE II 250.00 0.00 0.00 0.00 39.94 39.94 -0.19 PO03571 1995 CN-7th Railways 400.00 0.00 0.00 119.00 13.10 132.10 23.10 PO03639 1995 CN-SOUTHWEST POVERTY REDUCTIONPROJE 47.50 200.00 0.00 0.01 1.21 25.36 25.36 PO03647 1995 China Economic Law Reform -LEGEA 0.00 10.00 0.00 0.00 0.61 0.93 0.00 PO03603 1995 CN-ENT HOUSING 8 SSR 275.00 75.00 0.00 57.46 38.95 94.26 1.23 P003596 1995 CN-Yangtze Basin Water Resources Project 100.00 110.00 0.00 1.92 0.34 4.75 4.75 PO03540 1994 CN-LOESS PLATEAU 0.00 150.00 0.00 0.00 1.12 0.50 0.00 PO03632 1993 CN-ENVIRONMENT TECH ASS 0.00 50.00 0.00 0.00 1.11 1.73 1.41 Total: 11719 07 1722 60 21430 842.02 5141 55 2977.32 42352 - 83 -  CHINA STATEMENT OF IFC's HeldandDisbursedPortfolio June 30 - 2003 InMillions US Dollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic 2001 Peak Pacific 0.00 0.00 25.00 0.00 0.00 0.00 0.00 0.00 0 Rabobank SHFC 0.45 0.00 0.00 0.45 0.45 0.00 0.00 0.45 2000 SSIF 0.00 6.00 0.00 0.00 0.00 0.89 0.00 0.00 1998 Shanghai Krupp 28.92 0.00 0.00 65.63 28.92 0.00 0.00 65.63 1999 Shanghai Midway 0.00 16.02 0.00 0.00 0.00 16.02 0.00 0.00 1999 Shanxi 16.75 0.00 0.00 0.00 14.20 0.00 0.00 0.00 1993 Shenzhen PCCP 3.76 0.00 0.00 0.00 3.76 0.00 0.00 0.00 Sino Gold 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 Sino-Forest 25.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 2001 SuzhouPVC 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1995197 WIT 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1998 Wanjie Hospital 15.00 0.00 0.00 0.00 15.00 0.00 0.00 0.00 2000 Weihai Weidongri 1.03 0.00 0.00 0.00 1.03 0.00 0.00 0.00 1996 XACB 0.00 19.93 0.00 0.00 0.00 0.00 0.00 0.00 2003 Yantai Cement 6.33 1.95 0.00 0.00 6.33 1.95 0.00 0.00 1993 Zhen Jing 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 Zhengye-ADC 15.00 0.00 0.00 0.00 2.00 0.00 0.00 0.00 2003 Advantage 0.00 0.50 0.00 0.00 0.00 0.50 0.00 0.00 2002103 BCIB 0.00 0.00 11.60 0.00 0.00 0.00 0.00 0.00 2003 Bank of Shanghai 0.00 24.67 0.00 0.00 0.00 24.67 0.00 0.00 1999100102 CDH China Fund 0.00 16.36 0.00 0.00 0.00 2.38 0.00 0.00 2002 CIG HoldingsPLC 0.00 3.00 0.00 0.00 0.00 3.00 0.00 0.00 1998100 CSMC 0.00 12.00 0.00 0.00 0.00 7.20 0.00 0.00 2003 ChengduHuarong 6.73 3.20 0.00 7.82 6.73 3.20 0.00 7.82 1998 Chengxin-IBCA 0.00 0.36 0.00 0.00 0.00 0.36 0.00 0.00 1998 China Bicycles 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1987192194 China Walden Mgt 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1994 China Walden Ven 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 Dalian Glass 0.00 2.40 0.00 0.00 0.00 2.40 0.00 0.00 1994 Dupont Suzhou 9.35 4.15 0.00 0.00 9.35 4.15 0.00 0.00 1995 Dynamic Fund 0.00 8.76 0.00 0.00 0.00 7.10 0.00 0.00 1994 Great Infotech 0.00 3.50 0.00 0.00 0.00 2.10 0.00 0.00 2003 Hansom 0.00 0.08 0.00 0.00 0.00 0.08 0.00 0.00 1999 Huarong AMC 23.74 3.00 0.00 0.00 14.74 0.01 0.00 0.00 2002 IEC 20.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2002 LeshanScana 5.36 1.35 0.00 0.00 3.76 1.35 0.00 0.00 1998 MaanshanCarbon 9.00 2.00 0.00 0.00 9.00 2.00 0.00 0.00 2001 MinshengBank 0.00 23.50 0.00 0.00 0.00 23.50 0.00 0.00 2001 NCCB 0.00 26.58 0.00 0.00 0.00 26.46 0.00 0.00 2001 NanjingKumho 3.89 3.81 0.00 11.07 3.89 3.81 0.00 11.07 1996 New China Life 0.00 30.70 0.00 0.00 0.00 23.32 0.00 0.00 2001 NewbridgeInv. 0.00 1.95 0.00 0.00 0.00 1.95 0.00 0.00 1995 Orient Finance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1997198 PSAM 0.00 1.93 0.00 0.00 0.00 0.00 0.00 0.00 2003 Total Portfolio: 195.31 217.74 36.60 84.97 139.16 158.44 0.00 84.97 -84 -  Approvals PendingCommitment ' FYApproval Company Loan Equity Quasi Partic 2002 ASIMCO 0.00 0.01 0.00 0.00 2003 Anjia 0.00 0.00 0.01 0.00 2004 CCB-MS NPL 0.03 0.00 0.00 0.00 2004 CUNA RCCI 0.00 0.00 0.01 0.00 2003 Cellon 0.00 0.00 0.01 0.00 2002 Darong 0.01 0.00 0.00 0.01 2002 Huarong AMC 0.02 0.00 0.00 0.00 2002 IEC 0.00 0.01 0.00 0.00 2002 KHIT 0.00 0.00 0.00 0.00 2003 Peak Pacific 2 0.00 0.00 0.01 0.00 2003 SAIC 0.01 0.00 0.00 0.00 2002 SML 0.00 0.00 0.00 0.00 2002 Sino Mining 0.01 0.00 0.00 0.01 2002 Zhong Chen 0.03 0.00 0.00 0.03 Total PendingCommitment: 0.10 0.02 0.05 0.05 - 85 -  Annex I O : Country at a Glance CHINA:Wuhan Urban Transport Project East Lower- POVERTYand SOCIAL Asia B middle- China Pacific income Developmentdiamond* 2002 Population,mid-year (millions) 1,281.O 1,838 2,411 Life expectancy GNi percapita (Atlas method, US$) 950 950 1,390 GNi (Atias method, US$ billions) 1,219.1 1,740 3,352 T Average annual growth, 1996-02 Population (%) 0.8 1.o 1.0 Laborforce I%) 0.9 1.2 1.2 GNI Gross Most recent estimate (latest year available, 1996-02) per primary capita enrollment Poverty(% of populationbelownationalpovertyline) 5 Urbanpopulation (% of totalpopulation) 38 38 49 Life expectancyat birth (years) 71 69 69 .L Infantmortality (per 1,000live births) 30 33 30 Child malnutrition (% ofchildren under5) 10 15 11 Access to improvedwater source Access to an improvedwater source (% ofpopulation) 75 76 81 Illiteracy (% ofpopulationage 15+) 14 13 13 Gross primaryenrollment (% of school-agepopulation) 106 106 111 A 3r**iChina Male 105 105 111 Lower-middle-incomegroup Female 108 106 110 KEY ECONOMIC RATIOSand LONG-TERMTRENDS 1982 1992 2001 2002 Economicratios" GDP (US$ billions) 221.5 454.6 1,167.1 1,232.7 Gross domestic investmentiGDP 33.2 36.2 38.5 41.O Exportsof goods andserviceslGDP 8.9 19.5 25.5 29.5 Trade GrossdomesticsavingslGDP 34.8 37.7 40.9 44.0 Gross nationalsavingslGDP 35.1 38.0 40.0 43.8 T Currentaccount baiancelGDP 2.4 1.9 1.5 2.9 Domestic ?? ~~ interest paymentslGDP 0.2 0.6 0.5 0.5 savings I investment TotaldebffGDP 3.8 15.9 14.6 12.6 Totaldebt servicelexports 8.0 8.6 7.7 6.1 1. Presentvalue of debffGDP 14.1 Presentvalue of debtiexports 51.8 indebtedness 1982.92 1992-02 2001 2002 2002-06 (average annualgrowth) GDP 9.7 9.0 7.5 8.0 7.5 * *--China GDP Der caDita 8.1 8.0 6.7 7.2 6.6 _____ Lower-middlemcomegroup I STRUCTURE of the ECONOMY (% of GDP) Agriculture 333 21.8 158 145 2o Industry 450 439 50.1 51 7 l5 Manufacturing 373 33 1 342 445 lo 1 Services 21 7 343 341 337 Private consumption 50.7 49.2 45.7 42.5 " 97 98 i 9 00 a1 d2 I Generalgovernmentconsumption 145 13.1 134 13.5 Importsof goodsand services I*** n..jl&GDI +GDP (average annualgrowfhj 1982.92 1992-02 2o01 Agriculture 4 6 3.7 2 8 Industry 11 6 11.3 8 4 Manufacturing 112 104 9 0 8 1 Services 117 8 4 8 4 7 3 Privateconsumption 114 8 1 2 8 1 9 General government consumption 9 9 8 4 10.5 Gross domesticinvestment 9.5 9.7 13.9 14.9 e* * L X Exports +Imports imports of goodsand services 9.7 128 10.8 27 5 I - 86 -  China PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 Domestic prices Inflation ("A) c (% change) Consumer prices 6.0 6.4 0.7 -0.8 'OK Implicit GDP deflator -0.2 7.9 1.2 -2.6 5t Government finance I 104- (% of GDP, includes current grants) Current revenue 22.9 14.7 17.1 17.9 Current budget balance .I 2.0 1.1 0.0 1 Overall surplusldeficit -0.3 -1.0 -4.7 -3.0 y*- 1GDP deflator - 0 I C P I I TRADE 1982 1992 2001 2002 (US$ millions) Export and import levels (US$ mill.) I Total exports (fob) 22,321 84,940 266,155 325,565 Food 2,908 8,309 12,780 14,623 400'000 T Fuel 5,314 4,693 8,420 8,372 300 000 Manufactures 12,271 67,936 239,802 297,085 Total imports (cif) 19,285 80,585 243,610 295,203 200 000 Food 4,201 3,146 4,980 5,237 Fueland energy 183 3,570 17,495 19,285 100 000 i Capital goods 3,204 31,312 107,040 137,030 0 Export price index (1995-100) 41 85 83 78 96 97 98 99 00 01 Import price index (1995=100) 71 95 91 86 0 Exports Imports Terms of trade (1995=100) 58 89 91 90 BALANCEof PAYMENTS 1982 1992 2001 2002 (US$ millions) Current account balance to GDP (X) Exportsof goods and services 24,906 94,198 299,409 365,395 imports of goods and services 20,555 86,752 271,325 328,013 5 T Resource balance 4,350 7,446 28,084 37,383 Net income 376 249 -19,174 -14,945 Net current transfers 486 1,155 8,492 12,984 Current account balance 5,212 8,850 17,401 35,422 Financing items (net) -995 -10,952 30,046 40,085 Changes in net reserves -4,217 2,102 -47.447 -75,507 I 96 97 98 99 00 01 02 Memo: Reservesincluding gold (US$ millions) .. 24,842 220,051 297,721 Conversion rate (DEC, iocal/US$) 2.4 5.9 8.3 8.3 EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Composition of 2002 debt (US$ mill.) Total debt outstanding and disbursed 8,358 72,428 170,110 155,678 IBRD 0 3,752 11,550 12,051 IDA 1 4,287 8,654 8,729 A 12,051 729 Total debt service 2,125 8,618 24,297 23,688 G 43, IBRD 0 460 1,550 1,631 6,987 iDA 0 30 151 175 Composition of net resourceflows E 21,888 Officialgrants 47 327 240 Official creditors 657 2,343 2,156 -839 Private creditors -122 8,949 4,017 -13,593 \ / Foreign direct investment 430 11,156 44,241 49,308 u Portfoiio equity 0 1,243 3,015 2,286 F: 62.103 World Bank program Commitments 330 1,865 782 563 4 IBRD - E Bilateral Disbursements 1 1,331 1,791 1,733 B IDA D Other multilateral - F Private Principal repayments 0 197 904 1,157 Z .-IMF G Short-term --- Net flows 1 1,134 887 576 Interestpayments 0 293 797 649 Nettransfers 1 841 90 -73 vevelopmenr--trlzvlvj -87 -  Additional Annex 11: EnvironmentalAssessment and Environmental Management Plan Summary CHINA:Wuhan Urban Transport Project 1.Background The Environmental Assessment (EA) report was conducted for the project based on relevant regulations andguidelines o fthe Chinese government and the World Bank. The objective was to identify at an early stage the potential environmental consequences o f the project, propose measures to avoid, mitigate or otherwise compensate negative environmental impacts duringconstruction and operation, and allow incorporation o f appropriate measures inthe design to reduce negative impacts to a minimumand acceptable level. The EA was prepared by No. Four Survey & Design Institute o f China Railways Ministryand Wuhan ResearchAcademy o f Environmental Sciences inaccordance with Bank's OP 4.01. The project is classified Category A since it involves involuntary resettlement, major road construction, partly on new alignments, and increased air and noise pollution. The Environmental Management Plan (EMP) was prepared by No. Four Survey & Design Institute o f China Railways Ministry. The Wuhan Project Office (PO) provided detail budget estimation o f EMP implementation and on behalf o f Wuhan Government, WuhanPO endorses full implementation ofthe EMP. 2. Project Components The proposed Wuhan Urban Transport Project consists o f six components: (1) roadnetwork development. This component aims to address the most immediate needs o f improvingthe operation o f the road network withinthe city, and expanding the bicycle and pedestrian networks. (2) traffic management and road safety. The aim o f this component is to buildupon the strengths o f the existing transport network management to better utilize existing assets andresources. (3) public transport. The objective o f this component is to facilitate an increase inthe efficiency and effectiveness o f bus services inthe city. (4) road maintenance. The component aims to increase the adequacy o f road maintenance through increased funding and improvements to the institutional and procurement arrangements for road maintenance. (5) environmental management. The component aims to mitigate the impacts caused by road construction, minimize the vehicle emission, and to increase the positive environmental impacts o f the project. The detailed content includes: establishing a vehicle emission and traffic noise monitoring system, and facilitating implementationo f a motor vehicle emission control strategy. (6) capacity building. This component will strengthen the technical and management skills o f the municipal staff, 3. BaselineEnvironmentalDescription Wuhan is locatedinthe middle and lower alluvial plains o f the Changjiang (Yangtze) River. As the capital city o f Hubei Province, Wuhan is the economic, political, financial and cultural center o f the Province. It has eleven urbanandtwo suburban districts with an urban population o f 4.5 million. Wuhan is rich in water resources, and has a network o f rivers and lakes. Changjiang River and Hanjing River flow through - 88 -  the city proper. There are lakes around the middlering road, inthe area where the proposed roads are located. Wuhangets an annual average sunshine of 2058 hours, with 46 percent sunshine.Summer heat can be stifling. The proposed project is spread over eight urban districts. A detailed survey o f the area revealed that a total o f 126 environment sensitive receptors would be affected by the roads included inthe project. These receptors include schools, hospitals, kindergartens and residential buildings along both sides of the proposed project roads. 3.1 Air quality.Basedonthe resultsprovided byWuhan EnvironmentalMonitoring Station, the existing air quality inWuhan meets the requirement o f National Class I1standards inthe levels o f Sulphur Dioxide (S02), Nitric Oxide compounds (NOx), and Carbon Monoxide (CO). However, the Total Suspended Particulates (TSP) exceeded the standards, mainly due to coal combustion, construction activities and increase intraffic. 3.2 Noise. Continuous noise monitoring was conducted 2-5 meters away from the existing road shoulders and 1meter infront o fthe sensitive sites to determine the existing noise level along the proposed project roads. The results along typical road sections showed a 100 percent increase inthe level o f noise, exceeding the noise standards for day as well as night. 3.3 Vibration. Roadvibration caused by traffic is irregular. The vibration levelwas observed to increase with traffic volume and speed, assuming roadcondition and fleet composition remainthe same. 3.4 Sunshine to buildings located near the proposed interchanges could be blocked once the multi-layer structures are completed. Of the eleven elevated interchanges, five have no sensitive receptors located within the shaded areas o f the finished structures. There are residential buildings, schools and a kindergarten surrounding the remaining six interchange sites. The baseline sunshine investigation shows that on the winter solstice day, which is the shortest day o f the year, all buildingson the north side will receive 10 hours of sunshine at the first floor window level. 3.5 DrainageSystem and SurfaceWater. Wuhan's urbanareas are divided into twenty-two drainage systems with a total catchment area o f 198 km2. The sewer system inthe old city area i s primarily a combined storm and sanitary sewer system, while inthe newly developed areas, there are separate sewer systems for storm water and sewage. Project components are proposed inboth old and newly developed areas. The latest annual report on environmental quality inWuhan (2002), indicates that the surface water in virtually all water bodies inthe city has been contaminated, as shown by the standard compliance status. The mainpollutants are organic substances, coliform, nitrogen and phosphorus, indicating that domestic sewage i s the main source o f water contamination. 3.6 Ecosystem.East Lake is listed inthe 1998 Asian Wetland Directory. It is also a national level scenic site, urban recreation area, popular resort and health rehabilitation area. Basedon a 1986 site ecological study, the latest available report of its kind, there were 76 species ofphytoplankton, 203 species o f zooplankton, and 67 species o f fish found inthe lake at the time. The climate and the abundant food sources inthe shallow water bodies attract many species o f migrating birds to Wuhan during winter. -89 -  However, water pollutionand extensive human activities in and around the East Lake, are bringing changes inthe biomass, species andaquatic ecosystem ofthe area. The level ofbiodiversity has decreasedinrecent years. But the East Lake continues to be an important naturalhabitat inthe Changjiang River area and a rare natural wetland within a large city. Other components inthe urban ecosystem consist mainly o f plantedtrees, woodland, and green areas throughout the city area including all project sites. There are about 106 species o f trees inWuhan. 3.7 Culturalproperty and religion. A survey o f all project roads and other project facilities such as bus terminals on both recommended and altemative sites, was conducted during EA preparation. Two provincial level historic sites were identified within the project impacted area: (1) WuhanOffice o f the New FourthArmy, which is located at the Lugouqiao Road inthe Hankou section; and (2) Xinhai Revolution Gate, located about 150 mfrom a project road - Jinshui Road. The N e w Fourth Army was one o f the most influential army groups inthe modem Chinese revolutionary history and their former headquarter currently serves as a memorial andrevolutionary museum.Xinhai revolution is a significant milestone inthe Chinese modem history and its success ended the five thousand years o f the feudal society inChina and marked the beginning o f the modem Chinese history. The present revolutionary gate was rebuilt in 1981. 4. PotentialImpact & MitigationMeasures The major potential environmental impacts associated with the proposed project and the mitigation measures are outlined inboth the EA Report and inthe EMP. The EA Report concluded that the proposed project would address emerging and projected traffic congestion inthe city center, improve the quality o f urban life and stimulate economic development, resulting inboth social and economic benefits. The report also indicated that there would be both positive and negative impacts on the environment. The EMP simulates how the environmental protectionmeasures identified inthe EA Report will be incorporated into the design, and implementedduring the design, construction and operation phases o f the project and what institutional arrangements have been made to ensure their effective implementation. The key elements o f the EMP are summarized below: 4.1 Designphase.Currently Wuhan has a limited motor vehicle inspectionprogram, which carries out roadside inspections o f about 10-15 percent o f city's motor vehicle fleets each year. The city government also plans to introduce and enforce Euro3 by 2010 and Euro4 by 2020 inthe city. This EA proposes to include the development o f a motor vehicle inspection andmaintenance (I/M)program as a major mitigation measure. More specifically, this component may include (1) an assessment o f the legislative and policy framework ,emissions monitoring and vehicle emissions program (Wuhan already has its shortcomings); (2) policy suggestions to improve aggregate motor vehicle emissions, and measures to ensure more efficient functioning o f various agencies involved with motor vehicle emission control; (3) a study for development and implementationplan of anI/Msystem; (4) procurement o f I/Mequipment to upgrade the current inspection capability inaccordance with the I/Mimplementation plan; and (5) other necessary facilities such as buildingsfor inspection stations and/or laboratoryhest center facilities. In addition, as part o f the overall transport strategy for Wuhan, the project road design will be given full consideration to optimize the transport network. The analysis o f alternatives was conducted during the EA process inthe following aspects: different road alignments, different design configurations, and with and without project. For instance, comparison o f alignments was undertaken for four roads intwo districts by the project and the EA teams. A number o f criteria were considered inthe evaluation o f each section including length, road condition, planning width, - 90 -  as well as technical, socioeconomic, resettlement, implementation and environmental factors and engineering costs. Duringthis process a variety o f potential environmental effects were avoided or minimized. A number o ffeatures to minimize noise effects have been incorporated into the design. These measures include limitingconstruction o f elevated viaduct to locations where roadwidening is not possible. Construction materials for road surface structure with effective sound absorption will be applied incertain areas to reduce traffic noise. Some residential buildings and sensitive receptors adjacent to the roadwill be protected with the use o f sound barriers. Double-glazed windows and air conditioners will be utilized at special sensitive receptors, e.g., schools, hospitals, seniors' homes and kindergartens, affected by the traffic noise. Comprehensive sound insulation will be installed for the housing o f the first row o f residential buildings affected by traffic noise, e.g., double-glazed windows incombination with cooling systems. Structure and materials effective for vibration mitigation will be put intojoints between pre-fabricated structures and bridge piers. Application o f flexible supports, such as rubbers and bowl shaped supports for viaduct and interchanges will buffer vibration o f structure and reduce noise. Road surface quality also has a direct impact on vibration. The use o f highquality materials for surface smoothness and regular maintenance and repairs will be required. East Lake, a national level scenic site and an important part o f Jianghan lake wetland area, will be exposed to the construction and operation o f Qinghua Road. Given the limited time and available information at present, it is likely that the adverse impacts and consequences to the local ecosystem, particularly to the migrating birds and their habitats, have not been evaluated, although the road itself legally complies with relevant city plans and regulations. As Qinghua Road is not scheduled for construction inyear 2006 inthe current project implementationplan, the EA recommends further study and impact assessment o f the proposed construction. A further study will allow the Wuhan PO, design team, as well as EA team more time to explore the feasibility o f a different alignment or other options, which do not traverse the scenic area and the lake. There would be the alternative o f not buildingQinghua Road ifthe network capacity i s proven sufficient to serve this area without Qinghua Road. A total number o f2351 trees along roadsideswill be affected indifferent degrees by the proposed project. Inaddition to the implementation of "planting two trees for every one cut" policy andmeasures for protection o f existing green areas and transplanting trees, trees will be planted as part o f the Environmental Improvement Component o f the project. 4.2 Constructionphase. Dust will be generated as a result o f demolition and large-scale excavation. Full-time environmental management staff inthe construction team and the contractors will inspect sites and implement dust control measures such as the use o f water or the enclosure o f construction sites. Asphalt plants and concrete-mixing stations will be located indesignated areas only to minimize impacts. Vehicles transporting buildingmaterials (e.g. cement, earth and stone) will be covered with tarpaulin. At construction sites where dust is easily created by mixing, loading and unloading o f buildingmaterials, effective measures such as watering will be taken to prevent or mitigate dust. The rubbishand trash accumulated by workers will be stored in a closed site and disposed o f fregularly. The use o f noisy machinery, such as percussion hammers, pneumatic drills and rock drills duringthe night (1O:OO pm- 6:OO am) will be strictly prohibited. Machinery with low noise and noise shielding andor sound absorption materials will be used as much as possible, e.g. on-site generator with mufflers or silencer. Contractors will rationalize work timetable, keep noisy operations away from sensitive points, carry out regular maintenance andrepairs, and enforce strict implementation o f operation procedures. -91 -  Where sites are seriously affected during construction, temporary enclosure with noise shielding andfor sound absorption will be set up. Stream and diesel pile drivers are prohibited for use inareas where sensitive receptors are within 50 m o f construction sites. The construction components for viaducts and interchanges will be prefabricated and transported to the construction sites. Ifon-site monitoring results exceed standards, environmental inspectors or local environmental monitoring unit will report this to the project management office, which will stop the construction for rectification. Contractors must abide by the provisions for construction noise (vibration) prevention and control inWuhan. It is prohibited to use steam anddiesel pile drivers as well as monkey driver at the project site. Low-level vibration machinery will be used as much as possible, a system o f regular maintenance andrepairs is to be employed. Feasible measures for traffic management will be determined prior to construction in consultation with the traffic police. Project supervisors will cooperate to avoid traffic congestion due to construction. The public will be notified inadvance. When carrying out construction infront o f schools, the contractor will appoint specific persons to guide the pupils safely through the construction site. Overhead safety shelters will be installed when the construction is inresidential andfor commercial areas. Separate roadside construction will be adopted for road widening inorder to provide safety to bothpedestrians and vehicles. 4.3 Operationalphase. The proposed project will cause degradation o f air quality within 200-300 mo f the alignments, but will make a positive contribution to the overall air quality inthe urban area, particularly in the city center. An auto monitoring station network for air quality and noise, and a Motor Vehicle Emission Control Strategy have been incorporated into the project. The objective is to build o n existing initiatives, policies and programs being undertaken inWuhan, and to develop strategies and provide a strong foundation for a program to address the problem o f increasing air pollutionfrom mobile sources. The program will integrate a number o f initiatives including the ban on leaded fuel; an enhancement o f existing vehicle inspection and maintenance (UM) system; increaseduse o f alternate fuels; improvement o f laws and regulations related to vehicle emissions and their more rigorous enforcement; accelerated retirement o f older vehicles; further development o f public transit and traffic management and the expansion o f automated monitoring network to monitor air pollutionand quality. 5. Environmentalmonitoring The EMP identifies requirements related to the environmental inspection and monitoring program. Environmental management staff will be assigned by each contractor to respond to unanticipated environmental concems and will ensure the implementation o f the mitigation measures and compliance with established standards (e.g., noise and dust). Environmental monitoring will be contracted with Wuhan Environmental Monitoring Center (needs to be confirmed) during both the construction and operational phases to ensure the effectiveness o f mitigation measures and to determine the accuracy o f impact predictions. Parameters to be monitored include air quality, dust, noise and vibration. The project includes an environmental training component for contractors andinspectors. The staffingand training is presentedinthe EMP. 6. Public Consultationand participation Three rounds o f public consultation have been conducted during the EA process: the first round at the preparation o f EA terms o f reference (TOR) between September 4-7,2002; the second round at draft EA report between December 26-29,2002, and the thirdround at review stage o f draft EA reports between March 26 and April 10,2003. A variety o f techniques were utilized inpublic consultation including: site visits; public opinion surveys (e.g., distribution o f questionnaires, letters, interviews); experts consultation; -92 -  public meetings at neighborhood committees inthe project areas; stakeholders meetings and interviews with project affected groups, organizations and individuals. The distribution o f pamphlets gave an overview o f the project and indicatedthe availability o f the draft EA Outline & Summary, for review; and the announcement o f the second public meeting. Advertisements were also provided inlocal newspapers. InRoundthree o fpublic consultation, over 500people attended public and stakeholders meetings. A total o f 4200 copies o f the public questionnaire were distributed inthe three rounds o f public consultation and 4059 copies o f completed questionnaires returned. The public expressed their support to the project in general and also their concerns and suggestions on specific environmental issues including noise (construction and traffic), air borne dust, air emission from motor vehicle, traffic planning, landscaping, etc. The EA team has responded to the public concerns and suggestions by incorporatingthe following: a series o f dust control measures during construction; noise insulation and double-glazed windows at sensitive receptors, which are expected to experience significant incremental increase innoise levels after the project; and a large scale landscaping program with more new trees planted than those cut during the project, etc. Public consultation activities and information disclosure for this project is summarized infollowing tables: Stage Form By whom and for Time Location WB Policy whom ByPMO & EA Sept 4,2002 Conference OP 4.01 round meeting team for local room, Wuhan people's Municipal representative Design Institute and Youth Volunteers Public meeting By PMO & EA Sept 6-7,2003 Changqing, OP 4.01 team for project I Qingshan Park, iffected residents and Beibuting Public opinion ByPMO & EA Sept 13-20,200: Project road OP 4.01 survey team for areas randomly selected I individuals inthe project area Draft EA report Public meeting ByPMO & EA Dec 28,2002 xuping OP 4.01 team for project Department iffectedresidents Store; Xibeihu Plaza ByPMO & EA Dec 26,2002 to Project road OP 4.01 survey team for Jan 3,2003 areas randomly selected individuals ByPMO & EA March 17,2003 East Lake OP 4.01 review meeting eam for agencies Scenery Site - 93 -  md organizations Management related to East Commission Lake Office management Public opinion By PMO & EA March 28 to Project road OP 4.01 survey team for April 6,2003 areas randomly selected individual of proiect areas Information Date LocatiodMedia WE3 policy Notice to the public about Sept 5,2002 Wuhan EveningNews, OP 4.01; the public meetings, Sept 5,2002 Changjiang Daily Policy on Disclosure of locations, and contents Information Project summary and key Sept 9,2002 Wuhan Communications I 1 EAinformation Radio Notice to the public on Dec 28,2002 Wuhan TV stations I1 secondround o f public Dec 29,2002 WuhanEveningNews consultation including locations and contents Advertisement on draft Feb 19,2003 WuhanEvening News I1 ,EAreport Draft EA report and EMP Since Feb 18,2003 Wuhan public library I 1 No. 4 Railway Design Institute WuhanAcademy of Environmental Sciences Final EA report and EMP From March 30, 2003 Wuhan public library I1 No. 4 Railway Design Institute WuhanAcademy of Environmental Sciences - 94 -  AdditionalAnnex 12: Resettlement Impacts and ResettlementAction Plan Summary CHINA: Wuhan Urban Transport Project Introduction This annex reviews the adverse impacts o flandacquisition andstructural demolition engendered bythe Wuhan UrbanTransport Project, and the arrangements proposed inthe Resettlement Action Plan (RAP) to mitigate them. Consistent withWorld Bank Policy OP 4.12 on Involuntary Resettlement, the objectives o f resettlement planning are to avoid or minimize adverse impacts, and to ensure that incomes and living standards are improved (or at least restored) for all persons displaced by the project. Special care has been taken inresettlement planning to ensure that relocation or rehabilitationmeasures are sufficient inareas where low-income families are particularly prevalent. Both the road network improvement component and the public transport component o f the project are likely to involve landacquisition and resettlement. The RAP includes detailed coverage regarding the road network improvement component, based on census and survey data collected specifically for project purposes. Because the precise nature o f impacts associated with the public transport component will not be known untilthe final designs are prepared during the implementation phase o f the project, the RAP includes only preliminary estimates o f expected adverse impacts, which are expected to be relatively minor. The Wuhan Municipal Government will prepare a separate resettlement implementation plan, consistent with the principles and standards established inthe project RAP, for Bank review and acceptance at least six months before the commencement o f civil works inthe transport component. StructureDemolitionand Resettlement-RelatedImpacts Based on project designs, a total o f 28,756 persons would be affected, to varying degrees, by land acquisition or structural demolition. The road network improvement component includes activities scattered throughout both urban and suburban areas o f Wuhan. Inurban areas, resettlement activities will involve 62 residential neighborhood committees; insuburban areas, 48 villages will be affected by loss of land or structural demolition. Additionally, 273 shops, enterprises, or public institutions would be affected. The total number o f persons required to relocate their residence would be 9,072 (2,478 households). A total o f 19,693 employees may be temporarily affected by transitional closing o f shops or enterprises. No one will lose employment permanently because o f the project. The road network improvement component will require permanent acquisition o f 176 hectares o f collectively owned land insuburban areas. Of this amount, about 125 hectares are under some form o f cultivation (including approximately 97 hectares o f fishponds). The remainder is used for rural house plots or other local purposes, or is unutilized wasteland. Relatively minor designchanges are likely to continue untilimplementationbegins. Typically, final designs result inmarginal decreases inland acquisition and structural demolition, as well as changes inproportion among categories o f affected land and structures. - 95 -  Legal and PolicyFramework The legal basis for structural demolition, land acquisition and resettlement planningincludes national, provincial and local laws and regulations. Relevant national laws or regulations include the Urban Structure Demolition Management Regulation (2001) and the LandAdministration Law (1999). InChina, all landofficially designated as urbanlandis ownedbythe State while village collectives ownall cultivated rural land. Hence there are two types o f land acquisition involved inthis project. One is to acquire State-owned landwithout payment andthe second is to acquire collectively owned rural land with replacement compensation and other forms o f assistance provided to the collectives that stand to lose the land permanently. When collectively owned farmland is acquired, the future land user pays compensation for land, loss o f crops and attached properties, and a resettlement subsidy for the rehabilitation o f affected persons. According to the Land Administration Law (as revisedin 1999), the land compensation will be 6 to 10 times the average annual output value per mu for the three years before land acquisition. The resettlement subsidy, determined according to the number of agricultural population to be resettled, is up to 15 times the average annual output per mu. Crop compensation and compensation for affected structures or other fixed assets are paid directly to individuals. The land compensation and resettlement subsidy is to be paid directly to the village-based collectives losing the land. This compensation is to be used for.production development, non-farm employment and income-generating activities for the displaced people. With the prior approval o f village members and the county resettlement office, the compensation can also be used for improving community facilities or services. By law, separate accounts on resettlement compensation are to be kept at each affected village, with financial reports provided annually to the next higher level o f government. The State Urban Structure DemolitionManagement Regulation is more detailed and comprehensive than the land law. Please refer to RAP for detailed information. CompensationStandardsand RehabilitationMeasures Compensation rates are based on replacement cost for various categories o f affected assets, such as the actual structure and the zonal valuations reflecting the varyingvalue o f urban land. Land compensation i s based o n the highest average annual output value per mu among the same landinthe affected municipal districts. Ineach case, compensation rates meet or exceed legal requirements, and meet or exceed replacement cost valuation. The land compensation rates vary inthe seven affected municipal districts. The average landcompensation rate including resettlement subsidy is 1,077,780 RMB (about US$71,852) per hectare. The average paddy land rate excluding resettlement subsidy is Yuan 718,520 (about US$87,624) per hectare, which is ten times the average agricultural output. The amount o f resettlement subsidy for loss o f paddy landis Yuan 1,077,780 (about US$131,436) per hectare, which is fifteen times the average agricultural output. Compensation rates for each locality are listed in Chapter 7 o f the RAP. -96 -  Nominal compensation rates for residential structures ranges fiom Yuan 290 (about US$35) to Yuan 800 (US$lOO) per square meter. Illegal structures requiring demolition will be compensated at full replacement cost for the structure itself, but without supplemental payment for zonal valuation. Inmany cases, local authorities may increase compensation rates for demolished structures inresponse to localvariations in property valuation or to meet other local contingencies. Inall cases, however, compensation will meet or exceed standards established inthe RAP. The project will also affect public infrastructure. Compensation at replacement cost will be paid to the relevant government agencies or local governments to restore affected infrastructure and services. The replacement cost will be reported to the municipal government for review. The proposed road improvements will pass primarily through suburban areas. The population densities are comparatively high, with an average of 0.5 mu (or about .03 hectares) o f land per person. Resettlement planning has includedreview o f impacts on incomes invillages that will be affected. Typically, villages contract farmland to farmers yearly and agricultural income generally constitutes less than 10% o f village residents' income. Crop compensation will be allocated to each individual by cash and villages will take the responsibility o f livelihood restoration. According to the state land law, the calculation o f number o f displaced surplus laborers caused by land acquisition is based on the registered rural laborers, regardless o f whether they rely o n agricultural income or are employed inenterprises or private business. Therefore, the level o f actual displacement is less than the statistical level o f surplus laborers. The RAP sampled four villages' rehabilitation plans to review the potential effectiveness o f alternatives for livelihood restoration. Most, but not all, villages are expected to redistribute remaining collective land after land acquisition so that all villagers retain a share o f land. In such cases, the land compensation and resettlement subsidy will be used to invest inproductive activities or to improve local living standards. Insome villages, landwill notberedistributed ifthe remaining sharesbecome too small for practical use, or ifvillagers do not rely on agricultural income. Insuch cases, village consultation meetings will identify the villagers to be considered displaced surplus laborers. Rehabilitation arrangements ineach village also are subject to village consultation (requiring a two-thirds approval). Insome cases, individuals may choose to receive a cash resettlement subsidy (at minimum, an amount equal to the total resettlement subsidy received by the village divided by the number o f displaced surplus laborers). These individuals can then engage inself-employment or find their own employment opportunities. Inother cases, those identified as displaced surplus laborers will be offered employment invillage or township enterprises, with a minimum salary o f 500 RMB per month. Those to be provided employment will receive 500 RMB per month in transitional support untilthey are actually employed. The rehabilitation plan for house replacement is divided into two phases based on the two designed schemes - Year 1, and Year 2-to-5 schemes. Inthe Year 1 scheme, 60 percent o f households will be offered cash compensation, 20 percent o f low income households will be allocated highly subsidized apartments, and 20% o f the households will have the option to purchase second-hand houses inan urban area. Inthe Year 2-to-5 scheme, most of the affected households will be offered apartments for purchase at a discounted price. Rural residents have been offered two options. They can either get a fully prepared replacement plot to reconstruct housing intheir village, or they can elect to receive 150 percent o f replacement cost in compensation for their demolished structure to purchase replacement housing outside o f their village. As in urban areas, rural low-income households will be eligible for other forms o f assistance, including eligibility for subsidized rental apartments or discounted apartments for purchase. - 97 -  The loss o f benefits to enterprises andprivate businesses during the construction period will be negotiated through extensive consultation. Shops and enterprises will receive payment for loss o f profits andwages, and affected employees will receive support for the transitional period untilnormal operations can resume. The enterprises involved are owned by the municipal government and local district collectives. Impact surveys indicate that, inmost cases, the enterprises will be affected partially by the extension o f the road improvement and that the main structures or workshops will not be demolished. Therefore, productionwill not be affected seriously and the enterprises do not need to be relocated to other places. Ifthe enterprises prefer to restore production by themselves, the project implementing agency will provide them with cash compensation and negotiated transitional cash assistance. For private businesses, the project implementing agency will pay compensation at replacement cost for lost structures and improvements required therein, will provide assistance to offset temporary business losses and to provide temporary wage support for employees, and will pay for moving expenses. Additionally, the project will provide information relatingto available alternative business locations andrental costs, and insome cases will assist businesses in relocating into specialized markets or into newly constructed housing areas. The project management office has conducted a detailed household survey. Low-income families, single-mother families, andvulnerable groups o f people have been identified. Municipal government will offer preferential policies, during implementation o f the project, to 20 percent o f the economically and socially disadvantaged families affected by the project components. InstitutionalArrangements InChina, the project management office has no authority to acquire landinrural area throughregulatory means, or to directly implement any resettlement-relatedmeasures. Landacquisition authority, and resettlement-relatedresponsibilities, lie insteadwith the municipal districts involved. Under such circumstances, close coordination between the project management office and the relevant land administration bureaus is essential for effective resettlement. For State owned land inurban area, the land to be used will be transferred from landadministration bureaus to the project management office. Buildingonpast Bank experience withprojects inHubei Province and inWuhan, the municipal government and municipal districts have established a "leading group" to address any issues that may arise duringimplementation. The project management office has also established an intemal resettlement rehabilitation office and relevant divisions to work with district-level authorities on routine matters. Moreover, the project management office will reduce the process o f resettlement fund cash flow inorder to avoid the fund deduction, which may incur during the disbursement o f the fund. The project management office will also strengthen the capacity o f district-level and resettlement fund management. A computer software-based resettlement management network will be set up for all affected districts. A Resettlement monitoring institute will establish monitoring stations inall involved districts for dynamic and systematic monitoring. The monitoring stations will invite resettlement representatives to participate inmonitoring resettlement work. Community Participationand PublicDisclosure Potentially affected communities were consulted during both project design and preparation o f the RAP. Additional formal and informal consultations were undertaken at both the district level and the residential committee level. - 98 -  For RAP preparation, the consultation process was initiated during the process o f conducting a census and socioeconomic surveys, which began inMarch 2001. Potentially displaced persons were involved in identifying project-related impacts and inmeasuring potential losses of land, structures and other assets. Residential committees and village-level consultations also took place inearly 2002 to review proposed compensation rates and other aspects o f the RAP. The consultation process will continue throughout the implementation phase, inconjunction with resettlement monitoring activities. Information regarding the project and the resettlement program has been publicly disclosed as requiredby Bank policy. The draft RAP is available for public review at the provincial andmunicipal libraries, with notification published inWuhan Daily on February 19,2003. Additionally, the draft RAP was placed in the Bank Informationshop inFebruary 2003. Inaddition to formal RAP disclosure, separate campaigns have been, or will be, undertaken to ensure that affected persons are informed about resettlement aspects o f direct relevance to them. This information, published inbooklets for distribution to households or in posters for residential committee or village display, includes the projected timetable, compensation standards, rehabilitation measures, and information regarding whom to contact and procedures to be followed for those with complaints. ResettlementCost andImplementationSchedule The cost o f implementing resettlement measures is estimated at RMB 1,585.63 million (about US$193.4 million), including payment o f associated fees, monitoring costs and contingency allowances. Estimated resettlement costs are included inthe project budget. MonitoringofResettlementImplementation Resettlement implementationwill be subject to external project monitoring, to be conducted by a team functioning independently o f the project owner andprovincial resettlement implementing agencies. The monitoring institute is requested to set up monitoring stations in all involved municipal districts andto supervise resettlement implementation dynamically and systematically. Independent monitoring reports will be submitted to the project management office and the Bank twice a year. The reports will review whether implementationis in compliance with RAP terms and will evaluate the effectiveness of resettlement measures inimproving or restoring incomes and living standards. - 99 -  Additional Annex 13: Wuhan PublicTransport System: Current Situation, Improvementsand Reform CHINA:Wuhan Urban Transport Project Introductionand Background 1. This Annex summarizes Wuhan Municipal Government's current plans for improvements to public transport services and the reform o f Wuhan's public transport sector. It also outlines the possible role that the Bank project could play insupporting this reform. Past Bank experience (since SMTP Iin 1991) suggests that the Bank cannot lead reform but only support measures beingproposed by municipalities and encourage decision makers. The Bank's role thus far has been limitedto providing `knowledge' input when requested. 2. Wuhan municipality has been formulating and implementing proposals for public transport reform since August 2001. A Wuhan team including senior staff from several agencies visited six other Chinese cities that have undertaken PT reform, and analyzed their experiences. A draft Wuhan Public Transport (PT) Reformprogram-wasprepared, reviewed by a wide range o f staff, and submitted to the government for approval. The government has agreed to the proposal inprinciple. Implementation o f the reform program began in February 2003. 3. The core o f the reform is to gradually strengthen the institutions, management and operations o f the Wuhan PT sector by (i) separating the government and enterprise functions o f the PT sector, (ii) providing clearly defined regulatory arrangements, (iii) rationalizing the bus route management and competition, (iv) gradually increasing the financial independence o f the operating andmaintenance companies, (v) attracting other (non government) resources into the sector, and (vi) transforming gradually the operating companies into limited liability companies. Wuhan is working intensively on the agenda and its implementation. Current Situation 4. OrganizationalArrangements. Before August 2001, PT sector management and operations were the responsibility o f the Wuhan Public Facilities Management Bureau. PT sector management is now the responsibility o f four government departments: Wuhan State-Owned Property Management Commission, WuhanTransport Commission (WTC), WuhanProperty Price ManagementBureau, and Wuhan Finance Bureau. The roles andresponsibilities o f these departments are outlined below. 4.1 WuhanState-Owned Property Management Commission representing the Wuhan Municipal - Government, the Commission authorizes the state-owned PT enterprises to function as investors in state-owned property. It also cooperates with the concemed government departments to appoint and monitor the performance o f managers o f the state-owned P T enterprises. Inaddition the Commission is responsible for 0 checking and approving changes inproperty rights' or major asset transactions o f the state-owned PT enterprises. 0 checking and evaluating the operational achievements o f the state-owned PT enterprises, and giving performance related awards or penalties. -100-  0 supervising the state-owned PT enterprises financial and capital activities. 4.2 Wuhan Transport Commission i s responsiblefor 0 checking the qualifications o f PT enterprises inWuhan as well as the supervision and overall management o f the operations o f these enterprises, 0 working out the PT development plan for Wuhan as well as specifying the PT level o f service, PT routes and the location o f PT stops and interchanges, 0 management o f the operating rights o f PT routes, and 0 collecting urban PT statistics The commission also cooperates with the Property Price Management Bureau to monitor PT fares, assists the relevant departments o f the govemment to work out the prices for PT tickets and the monthly-pass, and then implements fare revisions once approved. 4.3 WuhanProperty Price Management Bureau is responsiblefor 0 supervising and checking the implementation o f the price regulated for the PT tickets and the monthly-pass, and 0 checking and approving the price adjustment to PT ticket and monthly-pass according to the change inprice indices and PT development. 4.4 Wuhan Finance Bureau is responsible for carrying out an annual review o f the financial position o f PT enterprises, and based on this review, for working out the financial subsidy policy and the related subsidyplan for the following year. 5. PublicTransport Companies. Wuhan currently has two public transport enterprises -the Wuhan Public Transport General Company (WPTGC) and the Wuhan Tongheng Corporation Limited. WPTGC consists o f eight operating companies: seven branch companies (six bus companies and the trolleybus company), and a sub company - the ferry company which is an independent legal entity. The Tonghen Corporation i s ajoint venture between the General Bus Company and a Hong Kong Company. 5.1 Employees. The enterprises collectively employ 27,868 active employees (of the total employees about 10 percent are employed inmaintenance, 37 percent are drivers, and 7 percent are conductors) andare also responsible for 5,296 retirees (a total o f 34,164 employees). Overall, the enterprises have five employees per bus, which by international standards is acceptable for buses operated with conductors. 5.2 PT enterprises'fmed assets. The initialvalue (inNovember, 2003), of the original asset o f WPTGC was 1492.36 million yuan, and the net value (after allowing for depreciation) was 896.02 million yuan. The original fixed assets o f the enterprises that are not independent legal entities was 1167.45 million yuan, and the corresponding net value is 665.99 millionyuan. The original fixed assets o f the independent legal entity subsidiary companies was 196.14 million yuan, and the corresponding net value was 101.26 million yuan. The value o f the landassigned to PTGC was 128.77 million yuan. The fixed asset are categorized as: a) operational Buses, b) other Vehicles, c) buildings (depots, parking areas, etc.), d) equipment (for maintenance, re-fueling, etc.), ande) other assets (office equipment, living quarters, etc.). The value o f these assets is shown inthe table below. -101 -  Other vehicles 706 375 33 1 Buildings 5,132 2,866 2,266 Equipment 2,226 1,246 980 Other 3,436 1,266 2,170 Sub-total 19,614 9,488 10,126 Land 12,877 12,877 I Total I 149.236 I 59.634 I 89.602 I 6. PublicTransport Operations 6.1 PTRoute Distribution. Wuhan PT systemcomprises 248 routes, among which there are 89 monthly-pass bus routes (including 7 trolleybus routes) and 159nonmonthly-pass bus routes. The total route lengthis 4391.1KM, and the route network lengthis 735.5KM. The route network density is 2.98KMKM2. The network also consists o f 8 passenger ferry lines, 2 vehicle ferry lines and 21 mini-bus routes. 6.2 PT Buses and Boats. Wuhan PT systemaltogether comprises 5640 buses and trolleybuses, among which 1277 are assignedto monthly-pass routes, 4363 to non monthly-pass routes (including 843 air-condition buses, 236 trolleybuses, 120 double-deck buses). The system also consists of 15 passenger ferry boats, 7 vehicle ferry boats (with a total capacity o f 127 vehicles)., and 464 mini-buses. There are 16.3 buses/10,000 people. Inaddition, 1,290 taxis operate inWuhan. 6.3 PT Passenger Volumes. The total PT daily passengervolume is 2.75 million persontrips (non-including taxi ridership). The mode share of urban PT is 21.74% (of all trips including walking and cycling). 6.4 PT Facilities There are 68 sites designated for PT use inWuhan (including public land). The total area is 810,000M2, and the built up area is 230,982M2. Wuhan PT system consists o f 1,200 stops, and 111 other facilities, including 4 interchanges, and 37 termini. There are eleven depots with a parking capacity o f 3950 standardbuses, and an annual maintenance capacity for 3560 standard buses. 6.5 Financial Situation. In2002, overall operating costs were 1081million yuan, and revenues 1042 million yuan, a cost recovery o f 96 percent, requiringan operating subsidy o fjust 39 million yuan. The average fare was 1.1 yuan. - 102-  7. PT fare settingprocedure. The current procedure for fare setting and adjustment is as follows. (i) PT enterprises submit an application for fare adjustment to the Wuhan Property Price Management Bureau and the Wuhan Transport Commission. (ii) Wuhan Property Price Management Bureaureviews P T enterprises' operating costs. (iii) Based on the results o f this review, Wuhan Property Price Management Bureau decide whether to institute the fare adjustment procedure,. (iv) After approval is given to institute the adjustment procedure, the PT enterprises submit an application to an information gathering meeting. (v) After the information gathering meeting,, Wuhan Property Price Management Bureau submits the applicationto the Wuhan Municipal Government and the Provincial Property Price Management Bureaux. (vi) The Provincial Property Price Management Bureau makes a decision, based on the information supplied, whether to grant a fare increase. InOctober, 2003, inorder to maintainPT fares at areasonable level, which is beneficial to the enterprises' development and also acceptable to the public, Wuhan PTGC has submitted an application for fare adjustment to Wuhan Transport Commission and Wuhan Property Price Management Bureau. A fare adjustment is anticipated inthe first half o f 2004. 8. PT routes-Managementof OperatingRights. Inorder to standardize the management o f PT- operating rights and to improve service quality, Wuhan Transport Commission issued and has gradually implemented, startinginJuly,2003, the "Wuhan Bus and Trolleybus Operational ManagementRegulation". The main contents o f the Regulation are as follows: (i) Authorization o f route operating rights. The regulation clearly specifies the procedures, conditions andtime limits for the authorization o f these rights. The time limit is 2 to 6 years. The operators will be authorized for 2 years, 4 years or 6 years' based on the opinions of the public. (ii) Management o f route operating rights. The regulation clearly specifies the procedure o f route operating rights' adjustment, change and cancellation. It especially regulates the service assessment standard, assessmentmethod and penalties. The service assessment standard includes the service level, safety o f operations, bus condition, settlement o f complaints, and the publics' assessment. The assessment will be undertaken once a year. Itwill take the opinions o fthe managing departments, social agencies and the public into consideration. The result o f the assessmentwill determine whether the operator retains the operating rights or inpenalized for poor performance. InJuly,2003, Wuhan Transport Commission chose 43 PT routes, which hadgood service quality and management for the initial award o f operating rights. Through this award, the management and monitoring procedures have been strengthened, and service quality has improved. There was a favorable response from the public. Basedonthis experience, Wuhan Transport Commission will increase in2004 the number o f routes awarded. It is planned to strengthen this process extensively over the next 2 years. 9. PT routenetworkoptimization Interms o f PT fleet size, route length and distribution, operational efficiency and service quality, Wuhan's PT service occupies a leading place inChina, especially inthe aspect o f convenience and accessibility. However, with the development o f Wuhan's economy and inorder to achieve the innovative, customer orientated and practical service goals proposed by the government, Wuhan PT mustdevelop to a higher level. Consequently, the Wuhan Transport Commission and PTGC will use the opportunity provided by the World Bank loan to undertake the - 103-  construction o f PT interchanges andtermini, and to push forward the customer responsive optimization o f the route network. 9.1 WTC and WPTGC Objectivesfor PT route network optimization. Optimize the route network to provide a more reasonable distribution o f interchanges; make full use o f P T resources to realize more regional and professional operations; moderately reduce the operation capacity incentral town; relocate some congested stops to reduce delay time as well as passengers' trip time; reduce route duplication as well as route length; increase PT mode share. 9.2 Scope of PT route network optimization. (i) Reduction of route duplication. PTGC has begunto combine the routes where 80% o f the route length is duplicated (ii) Distancebasedfares. PTGChasimplementedadistance-basedfareon45routeswhich are not easily adjusted. (iii) "ExpressBusRoutes". Introductionof "Express BusRoute"betweenlocationswhich have large passenger volumes. It is proposed to establish a network of "Three Layers and One central point" through all these adjustments. The first layer connects with the long-distance transport services at the middle-ring road and also serves the new residential areas. The second layer consists o f the PT termini and interchanges between the middle-ring road and the inner-ring road, which not only benefit the passengers but also connect with the railways. The thirdlayer consists o f several large interchanges on the inner-ring road, which connect with the light railtransit. 9.3 Achievements of PT route network optimization (i) Route duplication has been reduced and route network coverage has been expanded. The route network is expanding to the middle-ring road and the boundary between the urban and rural area. (ii) Route network density has been increased. The transport demand o f the urban area is now being met to a greater extent. (iii) PT' level o f service has been strengthened. (iv) PT route length has reached a reasonable level. (v) PT stops are now more evenly distributed, which has solved the problem o f buses queuing at stops and made trips faster and more convenient for passengers Future Developments 10. Establishmentof rapidPT corridors. Based onthe existing situation, and the requirements for future development, the current ideas about establishing urban PT rapid transit corridors are set out below. 10.1 Simultaneouslyplan the BRT system network and implement PTpriority measures. (i) Implement PT priority measures that are customer oriented. Extendthe existing bus only lane from Wu Luo road to Luo Yu road. (ii) Implement PT priority measures on the inner-ring road. It is planned to establish a high standard rapid PT system between intersections along Zhongnan road, Zhongbei road, Xudong road and Jiefang road. 10.2 Rapid PT system study. The Objectives o f this study are (i) formulate the Wuhan rapid PT to system development strategy and (ii) specify the related implementationprocedures. The scope o f the to study will include: a) rapid PT corridor study (PT only lanehoad), b) technical specifications and choice o f - 104-  bus type, c) fare management methods, d) PT terminus and interchange study, e) PT priority and ITS, and f ) passenger information and bus management systems 10.3 Rapid PT system design Based on Wuhan rapid PT system study as well as domestic and international experience, it is plannedto work out a practical rapid PT system designprogram. The objective is to design an advanced system that is feasible interms o f finance and operations. The scope o f the design program will include: a) P T only lane or road design, b) Technical specifications and choice o f bus type, c) fare management methods, d) PT terminus and interchange design, e) P T priority and ITS techniques, f ) passenger information and bus management systems, and g) operational management systems . PT Reform 11. Wuhan Ideas aboutthe Next Steps 11.1 PT management institutional reform Inorder to strengthen the institutionalreform o fPT management, to realize the goals o f (i) separating government and enterprise functions; and (ii)separating govemment and state-owned property, and to establish modem state-owned property management and PT operating systems, Wuhan Communist Party Commission and Wuhan Municipal Government carried out the PT management institutional reform program in April, 2003. The original General Bus Company, Trolleybus Company, Ferry Company, Taxi Company, Vehicle Ferry Institute and Bus Manufacturer were re-organized to form the new Wuhan PTGC. After its foundation, PTGC adjusted the PT operational structure and PT resource allocation, which improved the efficiency o f usage o f state-owned property. These measures increased the value o f state-owned property and laid a good basis for the future development of urban PT 11.2 Sellpart of the state-ownedproperty and change the staffs employer Method of institutional change: PTGC will sell its operating buses andpart o f the production equipment. The income will be used to change the PT companies and to assist staff to change their employer. PTGC will also invest part o fits property to formjoint-ventures with thirdparties. The newjoint-ventures will runthe existingPTroutes. Scope of institutional change: All seven operating companies belonging to WPTGC, and the ancillary companies (theproperty company, station managing company, PT checking-line company, education center, information center, advertisement company and I C card company) will be included inthis institutional change. Staffaffected by the institutional change: The total number o f registered staff affected by the institutional change is 24,000, among whom 23,000 are employed by WPTGC, and another 1,000 by the ancillary companies. After the institutionalchange, 86% o f the total staff will have changed their employer. Assets concerned in the institutional change: The assets covered include: operating buses, productive equipment and intangible assets (PT route goodwill) 11.3 Establishjoint-ventures. Investors will be invitedto purchase part of state-owned assets from PTGC. The investor then uses these assets and his working capital as their investment inthe joint-venture. Wuhan,PTGC invests part o f its remaining tangible and intangible assets inthe joint-venture. 11.4 Undertakings Required of Investors. Investors must be in good financial condition and have sufficient resources to cover operating costs. They must have sufficient operational and management staff, and technicians, and use scientific management methods. They must also be prepared to accept regulation and supervision by government and the responsible govemment departments. The investors must also -105-  accept to (a) hired employees according to the ratio o f four staff per bus, (b) sign a new contract with the employees according to the national labor laws, (c) take responsibility for public welfare programs, such as free tickets for the aged, and persons with disabilities, and the issuingo f monthly-passes, (d) implement the fare andmonthly-pass prices, as regulated by Wuhan Property Price Management Bureau, and (e) implement the route adjustment or route network optimization program, as regulated by Wuhan Transport Commission. 11.5 Proposalsfor Current StafJ The total number o f PTGC and ancillary companies staff is 24,000. The newjoint-ventures are expected to hire an estimated 20,000 employees o f the PTGC. Generally speaking, all staff o f PTGC and its ancillary companies will be expected to apply for jobs inthe newjoint ventures. 12. Governmentpolicysupport. For manyyears, WulianCommunist Party Commissionand WuhanMunicipalGovernment have shown great interest inthe development ofPT. Many policies supporting PT have been implemented, which have assisted inthe continuous rapid development o f PT and significant improvements is service quality. The these can b e 12.1 Policies givingpriority to the PT system (i) Givepriority to efpcient operations. Give priority to buses on street so as to avoid the interference from other traffic, and to create a good environment for bus operations. (ii) Givepriority to land usefor PT. Give priority to land use for PT inthe planning stage, andinclude PT land use plan into overall City Development Plan. (iii) Assure capital investmentfor PT construction. Give priority to capital allocation for construction o f P T depots and stops, which should assure the sustained development o f urban PT. (iv) Assure convenient transfers for passengers. Fully consider the connection betweenurban PT and airlines, long-distance transport, railways, boats and light-rail. 12.2 On street PTpriority measures (i) Provide bus only lanes. Provide bus only lanes on some main roads, with more than six lanes. Provide bus only lanes on some roads, which have only four lanes but have many PT routes. The latter bus only lanes shouldbe used at particular time periods. , (ii) Permit PT buses to do left-tums at some intersections, where such tums are not permitted for other traffic. (iii) Permit P T buses runboth directions insome one way roads. (iv3 Move the stop line inthe bus only lane closer to the intersection, and give PT buses signal priority to go first through the intersection. (v) Use some secondary roads as bus only roads. (vi) Provide temporary stopping places for taxis. 12.3 Welfare Subsidies. Wuhan Municipal Government gives PT enterprises subsidies every year for their welfare activities, such as the monthly-pass, free fares for the old, the blind, persons with disabilities, and the disabled soldiers, which assures the healthy development o f urban PT. Bank Comments on Reform Proposals 13. CurrentStatus ofReform. Mucho fthe focus thus far has been on clarifying roles and responsibilities inPT with an emphasis on addressing the first two objectives i.e. separation o f government - 106-  from operations and development o f a clear regulatory structure. Some progress has been made on the thirdobjective busroute management. The Wuhan Public Transport Group Company (WPTGC) has - already been founded, but the six bus branch companies and one trolley-bus Branch Company o f WPTGC are not independent legal entities at this stage. Wuhan Transport Commission is responsible for the PT studies and the PT plan, authorized by the municipal government. Experts (including experts from Urban Planning Department) will review the finished plan. After its approval, the plan will be implementedby WTC and be introduced into the UrbanMaster Plan. 14. Needfor a systematic and comprehensive fare policy. The process described inparagraph 6 should permit the operators to recover costs. However this needs to be accompanied by systematic analyses by WTC on the need to increase bus fares. Muchremains to be done in developing an appropriate fare policy, as the current proposals for route network optimization and P T priority appear to leave much o f the decision making to WPTGC. 15. PTNetworkoptimization. The proposals for route network optimization described inparagraph 8 needto be accompanied by a review o f route networks and service levels is requiredto address the observed low operational productivity. The operating companies are spread too thin, and routes and schedules need to be revised. WMG agencies have expressed concem at what they describe as the overlap of routes - different routes operated by different companies runningalong a number o f main roads inthe city center. Ifthe passenger demand exists for the capacity provided by all the routes the Task Team does not see this as a particular problem. There are many examples from cities outside China o f multiple routes sharing long sections o f road. 16. Needfor an operationalreview. Other aspects o fbus operations also merit review. The current staffbus ratio o f about five staff per bus could be reduced to around 3.5 per bus or below, given the recent introduction o f one person operation (OPO). Passenger and driver behavior at bus stops also has the potential for improvement. Problems were observed at barriered, single lane bus stops with the bus at the head o f the queue holdingup the buses behind Since buses do not stop exactly at the bus stops, proper passenger queues do not form and as a result boarding at busy stops is somewhat disorganized. The introduction o f OPO will require passengers to board at the front door and this will encourage queuing and will require drivers to better observe the stops. The schedule adherence is also reported to be poor. An operational review will examine scheduling o fbuses andthe dispatching and monitoring o f buses inservice. The current practice o f allocating spare buses on a route-by- route basis is inefficient and an operational review would help the operators switch their operations to pool spare buses and become more depot or district basedrather than route based. The reform proposals may also affect day to day operations. The full implications o freformwould be considered inan operational review. 17. Laborreform. Itis envisioned that WPTGC will carry out the labor andwage reform inthe sub-companies and branch operating companies. While details o f the staffing reform are still being finalized, As a guidingprinciple it has been established that 0 Appropriate assistance will be provided to employees made redundant, such as early retirement, retraining, or assistance to start their own businesses. 0 Wage reform will focus on incentive policies that would link wage increases to increases in employee productivity and efficiency. The Bank's assistance toward the Wuhan PT reform 18. The Bank's role thus far has been to serve as a knowledge bank, providing input to the Wuhan team (when asked) on issues related to: - 107-  (i) developing a more comprehensive understandingo f the current issues (ii) developing clear objectives for reform and understanding local constraints to change (iii) providing an overview o f the broader experience with public transport reform inChina and elsewhere (iv) developing a phased approach to reform. 19. Itis currently envisioned that duringProject implementation, the Bank will continue to have further dialogue with Wuhan PT reform team on all aspects o f the Wuhan PT reform. Inaddition, it i s envisaged that the Bank project could finance: Specific TA on competitive biddingo f routes, types o f contract and on the job training o f W T C staff managing the biddingprocess On-the-job training for other aspects o f W T C responsibilities (overall planning, service monitoring etc) Advice and on-the-job training to W T C on fare setting, different types o f fares and fare media, revenue sharing Advice and on-the-job training to the operating companies on network development, patronage and revenue forecasting, cost forecasting and general business planning Advice on setting reasonable profit levels with associated fare determination mechanisms to help operating companies achieve these profit levels Advice on developing five-year financial plans for the companies Consultant services to study Wuhan P T planning and improvements to the P T bus route network Consultant services on Bus Rapid Transit Network development, design and implementation - 108-  Additional Annex 14: [Developmentof Wuhan Transport Strategy] CHINA:Wuhan Urban Transport Project Introduction A key element inthe preparation o fthe Project has beenthe formulation o fthe Wuhan UrbanTransport Strategy. The strategy is important equally interms o f the inclusiveprocess that is generating it, and the introduction offinancial constraints, as is the analyticalframework it is producing. The process involved many WMG agencies working together to create within the overall vision for the development o f the city, a coordinated and integrated strategy for the development o f the transport system under a number o f development scenarios andidentified funding constraints. Following the initial discussions with the Bank regarding the content o f the overall project, WMG constituted a number o f Working Groups with highlevel representation. The Working Groups jointly identified a series o f overall goals for the transport sector. These goals were defined inresponse to the key sector issues that had been identified. A comprehensive transport study was then carried out by the Wuhan Comprehensive Transport Planning andDesign Institute (WCCTPDI), with technical assistance from domestic and international consultants. This process helpedto fill the planningvacuum that previously existed. Although the city had an approved Master Plan for 2020, there was little indication o f the phasing or priority o f individual components. Infrastructure investments were being implemented on an ad-hoc basis with little coordination, and no consideration for the overall vision for city development, or availability o f finance. Vision The transport strategy was formulated within this vision for Wuhan city, which can be characterized as: 0 A city to reinforce its position as an important industrial and trade center, as well as a transport andcommunicationhubinthe country 0 A "people-oriented" transport systemproviding highquality transport system and living environment to both residents andvisitors Goals The specific transport development goals established by WMG may b e summarized as: 0 To provide convenient, speedy and comfortable public transport services 0 To encourage the use ofpublic transport 0 To minimize the adverse effects ofexternal andthroughtraffic 0 To strengthen the linkages between the various districts inthe city 0 To develop the individualareas inthe city with balanced landuses andadequate local street system 0 To improve the efficiency ofthe transport system throughtraffic and demand management techniques - 109-  Key TransportSector Issues The key issues identified byWMG may be summarized as follows: . cross-river trafic has increased significantly inrecent years: the original bridges are over-loaded and demand is unevenly spread on the newer crossings. Cross-river travel is a major concem in Wuhan as it affects the integration o f the three towns within the city. * central area trafic congestion is increasing rapidly as major inner area developments are taking place, inparticular inthe central areas o f Hankou. The traffic inthe area, inparticular at intersections, has become very congested. external trafic is a perennial transport issue inWuhan as it is a major transport hub in central China. Several major national highways pass through the study area and two major intercity rail lines intersect inWuhan. 9 the road network is inadequate to support the growth o f vehicle traffic and urban development in the outlying areas. The functional roadhierarchy o f the network is incomplete and ill-defined, resulting inmost traffic being confined onto a limited number o f major arterials: some key links inthe network are missing. public transport services are currently fairly good overall (compared with other cities in China): however, the route network is not well structured or responsive to changing demands. A substantial growth inpatronage, targeted inthe coming years, will need a significant expansion inthe services. ThePlanning Process At the outset, WMGproduced a long list o fpotential schemes (the initiallist consisted largely o froad infrastructure schemes) for inclusion inthe Bank project or for implementation using local funding inthe same period. This list represented the priorities o f the government, inaccordance with the established Master Plan. Itwas determined that the total cost o fthe WMGproposals significantly exceeded the likely available funding at least over the initial five years to 2007. Whilst all the schemes conformedto the adopted and approved Master Plan, there was little or no indication as to the relative needs or merits o f each individual scheme to resolve the identified issues. A detailed analysis of WMGfinancial resources and commitments was undertaken and a realistic assessment made o f the capacity o f the city to take on additional projects inthe transport sector over and above those proposed for WB funding. (The summary is presentedinAnnex 5). It was evident from this analysis that the World Bank loan would constitute the major funding source for the transport sector over the next five years. Local funding would be restricted to expenditure on minor schemes and the completion o f current major commitments (4thYangtse Bridge and the extension o f LRT Line 1). An objective o fthe strategy analysis was thus to prioritize the schemes identifiedand to select those schemes which most closely responded to the key issues andproblems. WMG, inconjunction with the Bank, reviewed and screened each o f the proposed projects interms o f traffic demand; resettlement; environmental impact; conformity to the overall plan and strategy; and overall value for money. A shorter - 110-  core list o f schemes for possible Bank funding was thus defined. These were then subjected to more rigorous alternatives analysis and evaluation using the traffic model. Two alternative strategies were developed. One focused on improvements to the highway network, the other on the public transport system. The conclusions drawn from the model analysis were that: 0 road network improvement, focusing on strengtheningthe road hierarchy will be crucial to relieve traffic congestion as well as to improve the efficiency o f bus operation. 0 bus priority schemes, inthe near future, would be a more cost effective means to improve the transit system than buildingthe rail system. 0 an additional cross-river link inthe core area (QingDao LuTunnel) is essential to relieve the traffic on the No. 1 and No. 2 Yantze Bridges. 0 traffic condition inthe central area o f Hankou will deteriorate greatly inthe near future due to the expected growth inthat area and the lack o f well functioning local streets. 0 the transport strategy, inthe near term (up to 2007), should focus on perfecting the road network hierarchy and enhancing system efficiency through bus priority and traffic management measures. 0 the core list o f schemes inthe World Bankproject package would support the achievement o f the roadnetwork development goal in2007 given the transport investment constraint. There is strong traffic demand for the World Bank projects, except for southern part o f the Middle Ring Road, which may need further study. Strategyfor 2007 Inadditionto the roadinvestments, traffic management andbus priority schemes inthe World Bank project, the 2007 Strategy resulting from the analysis includes the No. 4 Yantze Bridge and the 2nd phase o f the No.1 Rail Line (which are considered as committedprojects) and the following govemment funded schemes: 0 A north-south minor arterial inthe old airport to relieve traffic on parallel arterials 0 Extension (upgrade) o f QinYuan Lufrom Wuqing Gan Dao to Heping Lu(Le., to extend the Qin YuanLu WB project) 0 A missing link segment onZiyangDong Lu(from Zhong Shan Luto Saihu Lu,inWuchang) to primarily serve local traffic, bicycles and pedestrians. Due to financial constraints, the Qing Dao LuTunnel, the additional river-crossing link inthe center city area, was not considered inthe 2007 preferred development scheme. However, the analysis indicates that the tunnel is crucial and should be built once the necessary construction funding is secured. Strategyfor 2012 Based on the analysis, the mid-term transport strategy should focus on the following: 0 Construction o f the Qing Dao LuTunnel 0 Minor and local streets incentral area to relieve the traffic burden on major arterials. 0 Local streets inthe new development areas. 0 Implementationo f the first phase o f the Metro Line No. 2 line to relieve traffic on the radial corridor inHankou area. -111 -  Long Term Strategy Inthe longterm, the study suggested that the transport development strategy should cover the following: 0 Implementation o f additional cross-river links to deal with the increasing congestion on the No. 1, No. 2 and No. 3 Yantze Bridges, and the Qing Dao LuTunnel. 0 Completion o f the roadway network with a balanced functional hierarchy, inparticular the enhancement o f the local streets system inthe center city area and new development area 0 Implementation o f highcapacity transit system (BRT, LRT or subway) progressively on major transit corridors to relieve the traffic congestion o n arterials, and to improve the mobility o f people from andto new development areas. Next Steps The formulation o f the Strategy has ledto the development o f a continuous planning process that is inclusive (of different interests and agencies) as well as responsive (not rigidbut flexible inresponse to changing circumstances). This process helps WMG inassessing the value o f any transport policy or investment, and notjust those included inthe Bank project. Inparallelwiththe major investments identified over the next five years, WMGhas hireda team oflocal and intemational consultants to prepare a long-term transport strategy for the entire municipal area covering all modes. The city is also to improve the overall efficiency and effectiveness o f the transport system through capacity buildingo frelevant agencies, further refinement o f the strategy, and greater use of planning and management techniques. Withinthe project, the Bank is to provide technical assistance to assist WMG with these improvements, and specifically to support the following activities: 1. Drafting o f a transport development white paper which outlines transport development policies and provides the guideline for transport development within the built up area. 2. Drafting andupdating annually o f five-year transport strategy documents covering investments and policies. 3. Strengthening o f the transport planningfunction inthe city, through: i. institutionalstrengtheningofrelevantplanningagencies ii. enhancingthetechnicalcapabilityoftheplanningagencies iii. strengtheningtheworkingrelationshipwiththeplanninginstitute theagency - responsible for developing the Master Plan 4. Conducting more detailed studies to address various specific issues, including: i. cross-rivertraveldemand ii. transitsystemdevelopmentstrategy iii. centercitytrafficdemandmanagement 5. Enhancement o f the Transport Strategy, through: i. refinementofthemidandlong-termtransportstrategies ii. developmentofroadnetworkfunctionalhierarchy iii. greaterintegrationoflanduseandtransportdevelopment -112-  MAP SECTION