China - Henan Towns Water Supply and Sanitation Project

Page 1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB1153 Project Name HENAN TOWNS WATER PROJECT Region EAST ASIA AND PACIFIC Sector Water supply (50%);Sub-national government administration (30%);Sanitation (20%) Project ID P081348 Borrower(s) PEOPLE'S REPUBLIC OF CHINA Implementing Agency Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Safeguard Classification [ ] S 1 [X] S 2 [ ] S 3 [ ] S F [ ] TBD (to be determined) Date PID Prepared October 7, 2004 Estimated Date of Appraisal Authorization December 9, 2005 Estimated Date of Board Approval June 1, 2006 1. Key development issues and rationale for Bank involvement 1.1 Henan covers the large, moderately fertile central China plain fed by the Yellow and Huai Rivers, whose location and agriculture had attracted a large population and dynastic ambitions but now act as impediments to development. It is still densely populated and largely rural, with only 23% of its 95 million residents living in urban areas, compared with the national average of 42%. The proportion of urban population is much lower than would be in line with the level of income (Yuan 6436 per capita in 2002) which is about 75% of the national average, or the development of industries and services which account for nearly 80% of the provincial GDP. This indicates that the development of urban areas lags the industrial growth far behind, limiting the industrial growth and efficiency. 1.2 In view of this, the provincial government has made urbanization as the focus of its development strategy. An important part of the urbanization strategy is the development of