Announcement of Shanghai Sewerage Project to Improve Wastewater Conditions of City on April 16, 1987

FOR IMMEDIATE RELEASE World Bank 1818 H Street, N.W., Washington, D.C. 20433, US.A. BANK NEWS RELEASE NO. 87/51 Contact: P. R. Sison IDA NEWS RELEASE NO. 87/48 (202) 477-3653 SHANGHAI SEWERAGE PROJECT TO HlPROVE WASTEWATER CONDITIONS OF CITY UASHINGTON, April 16 -- Shanghai is the People's Republic of China's largest and most highly industrialized municipality, and, due to neglect, it suffers fron a serious lack of urban services, particularly for wastewater pollution control. As a result, the living conditions of the city's more than 7 million people are affected. A combined World Bank loan of $45 million and an International Development Association (IDA) credit of SDR 78.9 million ($100 million) will help authorities address the problem. IDA is the Bank's concessionary lending affiliate. Called the Shanghai Sewerage Project, this effort is but the first stage of an environmental improvement program with an overall estimated investment cost of about $1 billion. The project addresses the worst polluted areas along Suzhou Creek, a tributary of the Huangpu River, in the northern half of Shanghai. That oart of the city contains the central commercial districts, industrial areas and dense residential areas with an estimated population of about 3 million people. Until recently, industries have been allowed to discharge effluents with little or no treatment Into local water courses. The project includes construction of a link and intercepting sewer system to collect and transport wastewater and carry lt to the Changjiang (Yangtze River) for disposal. Project elements consist of an intercepting sewer, link sewers, 10 pump stations, a screening plant and outfall tunnels. There will also be assistance for various studies -- ranging from determining staffing and organizational needs of the Shanghai Sewerage Company (SCC) to finding ways to rehabilitate the existing aged sewer system. The second stage of the program is scheduled to begin in 1991 and will provide the remaining 1rnrks for the city's wastewater disposal. In addition to the Bank loan and the 1DA credit, the Shanghai Municipal Government is providing $227.6 million to the project. The World Bank loan is for 20 years, including five years of grace, with a variable interest rate, currently 7.92 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent on the undisbursed balances. The IDA credit is for SO years, including 10 years of grace; it carries no interest but has annual charges (0.5 percent on the undisbursed balances and 0.75 percent on the disbursed balances). NOTE: Money figures are expressed in U.S. dollar equivalents. IDA credits are denominated in SDRs (Special Drawing Rights), which are valued on the basis of a "basket" of currencies. The U.S. dollar equivalent of the SDR amount of the IDA credit reflects the exchange rates existing at the time of the negotiation of the credit.