China - National Rural Water Supply Project

Report No. PIC4328 Project Name China-National Rural Water Supply Project (@+) Region East Asia and Pacific Sector Rural Water Supply & Sanitation Project ID CNPE3637 Borrower Government of China Implementing Agency National Patriotic Health Campaign Committee Mr. Shi Malin, Director China Water Supply and Sanitation National Project Office 17 Government Street Changping County People's Republic of China Tel: (86-10) 6874-4468 Fax: (86-10) 6974-4437 Date PID Prepared April 1, 1997 Date Initial PID Prepared September 13, 1996 Project Appraisal Date April 14, 1997 Project Board Date June 17, 1997 Country and Sector Background 1. Rural Chinese have made good progress in developing safe and accessible water supplies, with less than a quarter having such supplies in 1985 but some 57 percent having them by 1993. Of the nearly 918 million rural people in 1995, slightly over 400 million were served by piped water and about 205 million relied on hand pumps, with the remainder using a variety of sources, including springs, rivers, ponds, and rain catchment tanks. Although basically all of the piped water supplies have been deemed safe, hand pumps and other sources may or may not be. In some parts of China, water can be easily found, but its high fluoride or alkali content damages the health of those who must drink it. In other areas, including much of the karst region of southwest China, highly seasonal rainfall yields water of adequate quality and reasonable convenience for about four months of the year, but during the dry season ponds dry up or become contaminated and people must walk long distances to fetch clean water. In China, as in other countries, the lack of safe water correlates highly with poverty. 2. As the coverage increase suggests, sector investments have been large in recent years. In response to the high government policy priority given to rural water, and high beneficiary willingness to pay, over the period 1991-1995, an estimated RMB 15.2 billion ($1.8 billion) was invested in the sector, or RMB 16 per capita. Of that, approximately 24 percent derived from central and local government budget transfers, 26 percent from rural collectives, 43 percent from rural households, and 7 percent from  other sources. As the figures make clear, rural people rely mainly on their own efforts to finance these investments. 3. Good health and sanitation practices complement safe water supplies in protecting rural health. The Epidemic Prevention Stations (EPSs) monitor drinking water quality and provide other preventative health services to rural communities. For decades, the Chinese National Patriotic Health Campaign Committee (NPHCC) has run health education and action campaigns targeting a broad array of rural health problems. Early successes included reduction of schistosomiasis and insect-borne diseases. The NPHCC has also worked to expand the use of latrines, particularly composting latrines that promise high rates of pathogen destruction. Latrine use rates are high, at over 90 percent, reflecting an ancient concern with capturing fecal material to fertilize crops. However, only 10 percent of rural households have composting latrines and their coverage has grown very slowly. Both the relatively high cost of such latrines and the lack of a perceived health link have slowed adoption. 4. The central government sets goals for and measures the outcome of rural water, health, and sanitation programs. In addition to the EPSs and NPHCC under the Ministry of Public Health, the Ministry of Water Resources plays a role in allocating surface water for various uses, and the Ministry of Geology in allocating groundwater. But as the rural water investment figures suggest, local governments and rural people themselves play the strongest role in designing, funding, and implementing water supply and sanitation programs. The strength of organizations such as NPHCC has waned with the devolution of the rural economy from collective to household production, but the historical legacy of self-reliance remains. 5. Since the early 1980s, IDA has worked with China to expand rural access to safe water. The US $80 million equivalent Credit for the Rural Water Supply Project (Cr. 1578) helped some 7.2 million rural inhabitants of five provinces supply themselves with safe and convenient water. The subsequent $110 million equivalent Credit for the Rural Water Supply and Sanitation Project (RWSS, Cr. 2336), expanded this effort to another six provinces and introduced improved sanitation practices and health/hygiene education. The latter project has to date supplied safe drinking water to 4.2 million rural residents, and expects to have supplied 9 million by project completion in June 1998. Both projects have been notably successful in covering the full cost of water facility investment and operations and maintenance costs through water tariffs. And beneficiaries have reported significant health and productivity improvements, an outcome confirmed in the review of the Rural Water Supply Project. Objectives 6. The project's main objective would be to improve the well- being of poor rural people in 40 counties by providing access to safe, conveniently located drinking water and by improving related - 2 -  water use and sanitation practices. A supporting objective would be to provide the water at the lowest possible cost and to ensure its sustainability through good maintenance and accounting practices. As in earlier projects, water tariffs will be set to fully cover project costs. More concretely, the project would increase government's capacity to meet its goal of providing safe water to all through: (a) direct financial support to safe water supply efforts; (b) training programs to improve the operational and financial management of the water supply operations; (c) increased beneficiary participation in the design and selection of water supply alternatives; and (d) better focused water related village sanitation and health education programs. Description 7. An estimated 4.6 million inhabitants of 40 project counties in Yunnan, Jiangxi, Hubei and Hebei Provinces and Inner Mongolia Autonomous Region would benefit from the project. The proposed project provinces and autonomous region (hereafter referred to as the provinces) all contain a large number of poor counties with substantial unmet safe water needs. Participating counties were selected according to their: (a) rural poverty, in which the poorest counties were given first rights of participation; (b) the percentage of rural people lacking access to improved water supplies; (c) the number of people exposed to unsafe water, as evidenced by fluorine or alkali content, or by the incidence of gastro-intestinal illness; (d) existing provincial plans targeting priority areas of rural water improvement; (e) demonstrated ability to provide the needed counterpart funds; and (f) willingness to form and staff a county project office to agreed standards. All participating counties, with one exception, are among the nationally or provincially designated poor counties, although not necessarily the poorest among them. The exception has very high levels of arsenic and fluorine in shallow groundwater, and incomes below provincial averages. 8. Within each county, the proposed project would support national and local efforts to expand safe water coverage and strengthen related village sanitation and health education through the following components: Water Supply. Provision of safe water, sustainably financed, to poor communities currently lacking such supplies. Project design would maximize community participation in the selection of service alternatives. Users would be expected to pay the full cost of the water. Sanitation and Health Education. Assistance to on-going village health education efforts. This component would work with the primary education, Women's Federation, and public health systems in their efforts to improve water use and sanitation practices in the villages. It would support demonstration programs to increase use of composting latrines; the preparation of health education messages aimed at expanding the adoption of improved sanitation and hygiene practices among the target beneficiaries, primarily housewives, school-aged children and decisionmakers in households; - 3-  and training of health education specialists in delivery of those messages. Project Management. Support for water system operator and accountant training to ensure low cost operation and project sustainability. Project staff training would encompass project management, procurement, financial management, hydrogeological, construction management, inventory control, water technology and monitoring, sanitation and health education training. Research on effective strategies to expand adoption of improved sanitation and convey health messages. Project Cost and Financing 9. Total project cost is estimated to be about $134 million. The Bank Credit would cover an estimated $70 million of that cost, with the remainder financed by participating provincial, prefectural, and county governments, and benefiting villagers. Implementation 10. The project will be managed by the national project office for RWSS. Yunnan Province and Inner Mongolia Autonomous Region are in RWSS and their provincial project offices (PPOs) will likewise administer the new loan. The other provinces have established project offices as have all counties. Existing health education agencies will play a role in the project offices, based on their participation in the project. 11. County project offices (CPOs) under RWSS have, in general, been adequately staffed. However, under the new project, CPOs will meet some staffing needs more creatively than in the past. For example, construction supervision has been a weak point in RWSS (as it is more generally in China). Under the new project, CPOs will contract with independent county construction quality supervision stations for this service. Overall, a more aggressive supervisory and training role will be expected compared to the past. Project Benefits, Sustainability and Risks 12. Improved water supply has been shown to have a broad array of benefits: freeing labor time, reducing water-borne diseases, and providing an input to production. OED review of experience under the Rural Water Supply Project validated that finding for projects in China In terms of health, an international literature review has shown that moving to safe water reduced diarrheal morbidity by 16 percent, and substantially increased water quantities reduced that morbidity 25 percent, with a joint effect of 37 percent if both conditions were met. Hygiene education also offers documented improvements in health outcomes. Given the broad array of benefits, private willingness to pay for improved water is high. Therefore, the project team proposed the following benefit test: Communities can participate in the water supply component only if households are willing to contribute roughly 25 percent of the needed capital costs, assume liability for loan repayment, and pay the full cost of delivered water. The loan is amortized through water charges - 4 -  that include the greater of debt service or depreciation, and operating and maintenance costs. On that basis, the a priori economic rate of return (ERR) estimated by villagers will be positive. The actual ERR and Net Present Value (NPV) will remain unknown, a function of the (unknown) demand for water. Given the large number of small, dispersed investments, the willingness to pay test faced by villagers, which is not at all hypothetical, is deemed adequate as an economic test. The team notes that almost all water supply projects in the first and second loans continue to meet the test of covering full costs through water revenues, validating villagers' expectations. 13. A similarly compelling benefit test for the sanitation and health education components has not been identified. However, numerous international case studies document the importance of beneficiary behavior with respect to protection and beneficial use of new water resources. This project would devote approximately eight percent of total project costs to the health and sanitation work. Project monitoring will allow impact assessment and, if needed, midterm revision. 14. Sustainability. The water supply subcomponent under the first two projects has demonstrated high levels of sustainability. That would be enhanced under the current project through increased villager participation, better construction supervision and more intensive training of plant operators and managers. The sanitation and health education component would be sustainable only if effectively integrated into the existing delivery institutions. To ensure the latter, no new institutions will be created for the project, which will work through existing institutions. 15. Risks. Project risks vary significantly across subcomponents. As described above, ample experience with the water supply subcomponent suggests that risks are minimal and easily identified. The emphasis on project office supervision at the design and early implementation stages is intended to counter those risks. The risk to sanitation and health education is that the project would not identify, or induce the health education institutions to incorporate, more appropriate health messages or delivery mechanisms than currently used. Lessons Learned from Past Operations in the Country/Sector 16. Both of the first two rural water supply projects in China and Bank projects in other countries provide lessons directly applicable to the proposed project. The most important of these are: (a) beneficiary participation determines project success. In the Bank-financed projects, Chinese beneficiaries pay the full cost of water supply. Bearing this financial burden, they also demand a large say in how they connect to and use the water systems, have a strong appreciation of its benefits, and expect to have a voice in continued operations. The new project will seek to further increase that participation by requiring formal consultation with the village committee; -5-  (b) improved latrines under RWSS cost much more than the willingness to pay. That project was targeted on poor areas where the limited improved latrine adoption has been induced by government subsidies. The proposed project seeks to lower improved latrine costs, emphasize school latrines for their demonstration effect, and emphasize provision of latrine plans over direct construction; (c) the health and sanitation education programs under RWSS would have more impact, and receive more counterpart funding and human resources, if they were integrated with existing Government- sponsored rural health and sanitation education programs. At the same time, the rural health education messages need more careful targeting and delivery. They should focus on beneficiary behavior that either helps protect the improved water supplies or helps take advantage of those supplies to improve sanitation and health practices; (d) further improvements in water supply operations need a combination of aggressive supervision of water plant construction quality and more intensive staff training in operations and financial management. These actions will help ensure the long-term viability of the water plants' physical assets, consistent achievement of water quality standards, and financial solvency. Poverty Category 17. The primary Program Objective Category is environmentally sustainable development, with poverty alleviation and women in development as secondary objectives. As discussed above, the target group is below, but likely near the poverty line. The positive impact on women of the first two projects is anecdotal, not statistical. Supervision missions for the previous two IDA-financed projects have found women to be the primary gatherers and users of the water supply. Women also occupy a key position in family hygienic practices, through food preparation, educating and caring for children, and caring for sick family members. As such, they report substantial productivity and other benefits from the project. In some case study villages, women were able to use the water supplies and time freed from gathering water to grow courtyard gardens or begin cottage industries as a way of supplementing their family income. Environmental Aspects 18. The project is proposed as environmental Category B. The proposed physical investments in village water supplies are not expected to disrupt the landscape or otherwise have major environmental impacts. Chinese water supply construction practices call for source protection and other environmental good practice. No sub-project proposes to transfer water from one watershed to another, or to undertake work with a similarly large impact, so no environmental impact assessment would be required. The land used for the village supply is typically in one of the collectives benefiting from the water, and would average an estimated 0.08 ha per water supply facility. A resettlement framework will be confirmed at appraisal and resettlement inventories or resettlement - 6 -  action plans prepared, depending on the number of people resettled. 19. Program Objective Category: Environmentally Sustainable Development. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington, D.C. 20433 Telephone No.: (202) 458-5454 Fax No.: (202) 522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. Processed by the Public Information Center week ending June 6, 1997. - 7 -  Annex Environment Managing Plan (prepared by the borrower) The implementation of the national rural water supply project will provide safe, hygienic and reliable domestic use of water for farmer beneficiaries, reduce the incidence of water-borne and endemic diseases, enhance health level and living quality of farmer beneficiaries. It would lead to further remarkable improvement of sanitation and living qualities of beneficial villages through improvement of sanitation facility, health education, publicity and training of good hygienic habits. The principal positive effect of the project sanitation should be fully in the affirmative. However, should it not pay special attention to some links during the project design and implementation, the potential negative effect would still exist. Therefore, the appropriate measures for the relative links should be taken. Water Supply Engineering (1) National, provincial and county project offices should be fully aware of and earnestly share responsibility for environment potential effect, pay particular attention to water source quality, conduct water source hygienic evaluation, raise water source hygienic protection requirement, have surface water be in comply with "Surface Water Environment Quality Standard" (GB3838-88) and raise water treatment and disinfection requirements and enable the water supply quality reach the State "Dom3estic Drinking Water Hygienic Standard" (GB5749-85) For medium and large piped system, County Environment Protection Bureau must put forward certification that project environment evaluation are in compliance with requirements of state environment protection regulation. (2) Detailed, accurate analysis on evaluation of water source hydrology, hydrogeological materials, allowable extraction rates and design water supply volume are undertaken in order to ensure reliability of long-term sustainable water supply. (3) For water well construction (tube well, large-mouth well) and use of underground water, it is forbidden to use sewage for irrigation and to use toxic pesticides within the area having an impact on the wells of water source. Well undertake well sealing (seal with water impermeable coat and surface course) and well mouth, well stand construction to prevent surface water contamination. Within a range of 10 m, domestic residence, poultry- livestock farm, seepage latrine, excreta-garbage dumping are not allowed for maintaining good health condition and whole greening and constructing water source protection zone. Measures will be taken to strengthen village education and to prevent animal intrusion. For fluoride water district, the water yielding aquifer must be isolated from other aquifers prevent saline, high concentration - 8 -  fluorides, arsenic water and other potential toxic matters to intrude into the water extraction aquifer. Efforts should be made to undertake evaluation, water quality monitoring and analysis. (4) For water supply piped system which use surface water as water source, when choosing water source, it should prevent sewage impact. When extracting water from rivers, sewage, garbage, excreta transfer wharf and harmful material warehouse are not allowed to be constructed within 1000 m of upstream and 100 m downstream. The installation of notice board indicating water source protection zone should be made in above protection district by local government. Within the range of water works surrounding 10 m, there should be listed as major protection district, its requirement similar to water works of underground water. (5) Latrines in water plants and such domestic sewage should be discharged into septic or purification tanks. The sludge and filter backwashing water of surface water-water works should be collected separately and discharged outside of water intake downstream protection zone. (6) All piped water supply should have special disinfecting and chlorination facilities. Water chlorine content from water works should be periodically tested and the residual chlorine value in pipe ending should be no less than 0.05mg/l. The chlorinating room should have good ventilation. When using liquid chlorine for disinfection, the chlorinator should be hermetically sealed. To guard against chlorine discharge accidents, the chlorination room should have alarm and chlorine installations to avoid environment surrounding contamination due to such accidents. (7) Water extraction and distribution noise nuisance: Generally, water extraction pump house is located far away from the production district. Distribution pump house is usually constructed in the purification house. When pumping units are selected, it should select low noise facility as fully as possible. Between pump house and control room, there should be double layered glass observation window for sound insulation to reduce the noise effect to operators. But it should have no impact outside the room environment. (8) In areas where hand pumps are major means for water supply, water wells are dispersed, so the water is very easily contaminated by surface water, animals or latrines. Therefore, the design and hygienic protection of deep well hand pump system including pipe well, well stand and hand pumps should be in compliance with the requirements of "Rural Water Supply Design Standard." Handpumps must be installed on strong concrete base and established well stand which is higher than well mouth by 100-200 mm. The slop of well stand base is 1:30 sloping to a discharge channel. The discharge channel should extend at least 30 m to a seepage pit. The well stand should be enclosed by a fence. (9) Water supply by means of rain water catchment. When roof or - 9-  constructed surface water catchment site are used for the rain water runoff to water catchment tank, the material quality of roof rainfall pipe, rain water catchment surface should be non-toxic and harmless. Also, house holder should be advised to discard the first rainfall and add bleaching powder in water catchment tank for disinfection to prevent bacterial infection. Also, they should boil their drinking water. The water catchment tank should be in compliance with requirements of "Rural Water Supply Design Standard." The county Epidemic Prevention Stations should check water quality in the water catchment tank once every half year to ensure the safe water quality. Sanitation (10) The project will provide certain amount of household and school complex latrine of which the design should ensure enough time and enough high temperature for excreta and urine storage to require killing, eliminating large amount of pathogens (ascaries ova, bacillus coli). Sealed latrine can prevent pathogen to infiltrate into soil so as not to endanger surface water or underground water when fertilizer used in the filed. Also, rational latrine design can reduce insects interacting into the latrine, reduce pathogen vehicle, eliminate the bad odor. To construct this kind of latrine, strengthen the management, sweep off rubbish and maintain clean condition will have good impact for improvement of environment quality. Health and Sanitation Education (11) Health and sanitation education are mainly to improve the villager behavior, foster good health habits. To ensure safe drinking water and improve sanitation in other aspect will lead to remarkable environment improvement. - 10 -