China - Liaoning Urban Transport Project

Report No. PID3812 Project Name China-Liaoning Urban Transport Project (@) Region East Asia and Pacific Sector Transportation, Urban Transport Project ID CNPE41890 Borrower People's Republic of China Implementing Agency Liaoning Urban Construction and Renewal Project Office (LUCPRO) Mr. Zeng Juequn, Director No. 282 Danan Shenhe Shenyang 110015 Liaoning Province Tel: (86 24) 481 2920 Fax: (86 24) 481 2392 Projected Appraisal December 1998 Projected Board Date March 1998 Country and Sector Background Liaoning Province has proposed a project to support urban transport development in the three cities of Shenyang, Anshan and Fushun, all located in the center of the Province within 1-2 hours drive of each other. The cities have urban populations of approximately 3.9, 1.6 and 1.4 million respectively, which rank them all among the largest cities in China. 2. All three project cities of Shenyang, Anshan and Fushun face common issues with respect to the development of their urban transport systems. These include: Inadequate Road Network. A major obstacle in each city's road network is the division of the central area by rail lines. Other factors include: underdeveloped primary road system within the road hierarchy; missing links in the road network causing poor network connectivity; and inadequate budget and institutional arrangements for road maintenance. Loss of Public Transit Mode Share. Several factors contribute to declining mode shares for public transit including increasing motorization of travel with rising affluence. Other issues facing public transport include: slow bus operating speeds (slower than bicycle travel, ranging from 5-8 km/hr); poorly developed route networks and transfer points; popularity and growth of minibus services which have poor operational discipline causing congestion at stops; underdeveloped regulatory capacity to manage competition and the entry of new participants; and ongoing reform of operations within a context of fixed public operating subsidies and fare structures. Chronic and Recurrent Congestion. Slow operating speeds and safety incidents are caused by a number of factors including lack of proper control and management of mixed traffic; inadequate mode segregated facilities; limited enforcement of road use. Moreover, there is insufficient technical capacity to undertake needed traffic impact analysis, circulation plans, and safety analysis.  Fragmented Policy-Making. Policy-making within the sector suffers from poor institutional coordination and low technical capacity to support decision- making. The urban transport problems found in Liaoning are not uncommon in China. In many cities, the main issues facing the urban transport sector in China stem from increasing motorization of the vehicle fleet, (fueled by rising incomes and industrial policies which promote the development of the domestic auto industry), combined with rapid urbanization and inefficient public transport. Increasing motor vehicle use is leading to worsening traffic congestion, environmental degradation and increases in accidents in urban areas. In response to the need to address these conditions comprehensively, a symposium was held in Beijing in late 1995, to discuss China's Urban Transport Development Strategy\1, sponsored by the Ministry of Construction, Ministry of Finance, the People's Bank of China, the World Bank and the Asian Development Bank. Considerable agreement resulted from this event bout the actions and reforms needed to promote balanced and sustainable development of China's urban transport systems. Project Objectives The overall objective of the project is to improve urban transport system quality and productivity to facilitate economic and social development. Within this overall objective, the project will focus on more limited, but achievable, targets, including (a) the alleviation of infrastructure bottlenecks, (b) improved road maintenance, (c) improved safety and operational efficiency of the road network, (d) increased efficiency and effectiveness of public transport services, (e) environmental sustainability of project investments and and (f) strengthened local capacity in urban transport system planning, development and management. Specific and monitorable objectives will be developed during preparation. Project Benefits Benefits are expected to accrue to the project in four principal ways: (a) improved passenger and freight traffic conditions and reduced traffic congestion in and around the city centers, (b) improved environmental conditions (including safety), (c) improved quality and operating efficiency of public transport services resulting from priority treatment and improved management of bus services, and (d) increased institutional capacity to manage the city transport system. The economic evaluation would focus on changes in travel time and cost brought about by the project for motorized users and the quality of the travel environment for non-motorized users. Project Risks Three main project risks are identified in the project, along with actions to mitigate them. First, to counter the risks of generated traffic in the project, studies of parking and vehicle emissions control will be undertaken to develop appropriate policies and strategies in these areas. Next, to ensure the balanced and successful implementation of project investments, public transport and traffic management studies will commence at the start of the implementation period. Finally, commitments will be sought, and technical assistance offered, on the continued reform of public transport and road maintenance arrangements. Project Description Six project components have been provisionally identified with Liaoning for further preparation, as follows: - 2-  Infrastructure construction. All three cities have identified specific highway components for inclusion in the project based on city development plans, as a means to address existing congestion and develop capacity for future growth. These include development of high-grade facilities in the road network, improving connectivity through the provision of missing links and better rail crossings, and general road upgrading, . Traffic Management and Safety (TMS). This component seeks to improve the amenity, efficiency, and safety of the road systems in the three cities. A major emphasis of this component is to separate modal traffic and develop integrated bus priority, non-motorized and general road networks. As such, the component includes activities in road channelization, junction re-design, signalization and control, enforcement, bus corridor development, and road safety. Public Transport Improvements. The objectives of this component are to improve the quality and financial viability of public transport services, principally the existing municipal bus systems but also the Anshan trams. Municipal public transport services are the subject of much debate in China at the present time, and municipal experiments in reform and restructuring, including the introduction of private sector competition, are being encouraged from Beijing, and undertaken in all three project cities. This component seeks to develop public transport services and guide the reform process in the three cities, through investments in bus corridors, equipment, and construction of depots and terminals, as appropriate. Street Maintenance. All three cities suffer from inadequate street maintenance to the extent of impeding the smooth and safe flow of traffic. Poor street maintenance also leads to economic losses through eroded infrastructure. A component combining institutional development and investment in improved equipment with technical assistance and training is proposed to provide the necessary support to sustain adequate street maintenance levels. The establishment of appropriate funding for street maintenance programs is viewed as a pre-condition for project investment in major highway infrastructure. Technical Assistance. Technical assistance (TA) would be required to support the implementation of all project components identified above. In addition, other TA is proposed to assist (a) project tendering and construction management, (b) development of a motor vehicle emissions strategy, and (c) planning public transport priority and traffic control schemes, and (d) development of a parking control strategy, and (e) studies to support sustainable maintenance and public transport development. Project Financing A World Bank loan of $150 will be made to finance total project costs of $386 million. Project Implementation The local arrangements for, and local ownership of, the project development and preparation process are particularly strong. On behalf of a Liaoning Project Leading Team, LUCRPO have overall responsibility for organizing the project preparation. They are very familiar with Bank requirements since they are administering two other Bank projects in Liaoning Province, and enjoy strong support at the highest level of the provincial government. Special project offices, each with some technical staff, have been set up in each of -3 -  the three cities to coordinate the inputs of all the city agencies involved. These local agencies are represented on the Project Leading Team, and include: Planning Committees, Financial Bureaus, Construction Commissions, Environmental Protection Bureaus, Auditing Bureaus and Public Security Bureaus. The project offices have also established links with the Public Utility Bureaus (public transport). Transportation Management Committees have additionally be established to guide urban transport policies during implementation. Project Sustainability Project sustainability will depend on the quality of project implementation, including project impact mitigation measures, the success of institutional reforms and the adequacy of available finance to support ongoing project operating and maintenance costs. Continued reforms in public transit, road maintenance and sector coordination are especially critical to ensure long- term benefits of the project. Sustainability will also depend in part upon the compatibility of local land use planning and pricing policies, which are outside of the project's direct scope. Lessons Learned from Past Operations Bank-wide, the following lessons from previous urban transport assistance have been identified: (a) institutional reform is critical to obtaining sustainable improvement, and demonstrated commitment to these reforms must be obtained prior to project implementation; (b) there must be a commitment to an overall transport strategy; (c) counterpart funding must be assured; (d) financial mechanisms must be identified to support proposed Government expenditures and/or subsidies; (e) capacity building is important through a combination of appropriate training and technical assistance; and (f) an integrated approach to transport planning is required. Issues of financing [items (c) and (d) above] have not arisen on urban transport projects in China, but the other points do apply. More specifically, implementation of previous Bank-financed urban transport projects in China has indicated that: (a) municipalities have strong capability in civil works design and construction, often requiring little Bank assistance; (b) involuntary resettlement is normally well planned and managed, (c) techniques for environmental analysis are fairly well developed, but there is little experience in carrying the findings through into civil works design or the design of coherent motor vehicle pollution reduction strategies; (d) techniques for transport planning and investment evaluation (operational, environmental, economic and financial) are in their infancy and as yet provide an uncertain foundation for transport development programs; (e) traffic management is mostly seen in terms of equipment installation (traffic signals and monitoring cameras) with little recognition of the importance of traffic management planning (defining road hierarchies, defining and designing road user priority schemes, designing junction layouts) or the need for inter- agency coordination; and (f) reform and restructuring of municipal bus operations is complex and must be managed as part of the overall municipal reform process. The overall characteristics of project implementation -- strong on civil works, weaker on institutional aspects -- are shared with many other infrastructure projects in China. In particular, the move to the market, municipal reform, rapid economic growth, and the recent advent of the motor car in large numbers, is confronting urban planners and city leaders with a range of unprecedented problems which make institutional reforms both pressing but also hard to accomplish. -4-  Poverty Category Not applicable. Environmental Aspects The project is proposed as environmental Category A with environmental impact assessments (EIAs) required for all infrastructure construction subcomponents. EIA and EAP have been prepared for all three project cities. Some of the components would involve involuntary resettlement for which Resettlement Action Plans have been prepared. Program Objective Category The Program Objective Category is environmentally sustainable development. The Poverty Category is not applicable to this project. Contact Point: The InfoShop 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 activities and/or components may not be included in the final project. Processed by the InfoShop week ending December 4, 1998. - 5 -