China - Shanghai Urban Environment Project

Page 1 Document of The World Bank Report No: 23567-CHA FOR OFFICIAL USE ONLY PROJECT APPRAISAL DOCUMENT ON A PROPOSED ADAPTABLE PROGRAM LOAN IN THE AMOUNT OF US$200 MILLION TO THE PEOPLES REPUBLIC OF CHINA FOR THE SHANGHAI URBAN ENVIRONMENT PROJECT IN SUPPORT OF THE FIRST PHASE OF THE SHANGHAI URBAN ENVIRONMENT PROGRAM May 20,2003 Urban Development Sector Unit China Country Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Page 2 CURRENCY EQUNALENTS (Exchange Rate Effective May 1,2003) Currency Unit = Yuan (Y) Y 1.00 = US$0.12 US$l.OO = Y 8.3 FISCAL YEAR January 1 -- December 31 ABBREVIATIONS AND ACRONYMS APL Adautable Program Loan CEIC DFV EA FWPC GDP HDG ICB JOOC MOF NCB NSDC PO RAP SCAESAB SCC SDRC Shaghai Chengtou Environment Industry Development Company Limited District Financing Vehicle Environmental Assessment Fengjing Water Purification Company Limited Gross Domestic Product Hongkou District Govemment Intemational Competitive Bidding Jinshan Ocean Outfall Engineering General Company Limited Ministry of Finance National Competitive Bidding Nanpai Sewage Disposal Company Limited Project Office Resettlement Action Plan Shanghai City Appearance & Environmental Sanitation Administration Bureau Shanghai Construction & Management Commission State Development & Reform Commission SEPB Shanghai Environmental Protection Bureau SFB Shanghai Finance Bureau SHUEP SM SMG SMSC SMWC SOE SPC SSPl SSP2 SSPCC SWA SWAOD SWEC TFYP UDIC WTO Shanihai Urban Environment Project Shanghai Municipality Shanghai Municipal Govemment Shanghai Municipal Sewerage Company Shanghai Municipal Waterworks Company Limited Statement of Expenditure Shanghai Development Planning Commission Shanghai Sewerage Project Second Shanghai Sewerage Project Shanghai Sewerage Project Construction Company Shanghai Water Authority Shanghai Water Assets Operation and Development Company Shanghai Water & Environment Construction Company Limited Tenth Five-Year Plan Shanghai Urban Development and Investment Company World Trade Organization WWTP ~~ Wastewater Treatment Plant Vice President: Jemal-ud-din Kassum, EAPVP Country Director: Yukon Huang, EACCF Sector Director: Keshav Varma, EASUR Team Leader: Geoffrey Read, EASUR Co-Team Leader Mats Anderson, EASUR Page 3 FOR OFFIW USE ONLY CHINA SHANGHAI URBAN ENVIRONMENT PROJECT CONTENTS A. Program Purpose and Project Development Objective 1. Program purpose and program phasing 2. Project development objective 3. Key performance indicators B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2. Main sector issues and Government strategy 3. Sector issues to be addressed by the project and strategic choices 4. Program description and performance triggers for subsequent loans C. Program and Project Description Summary 1. Project components 2. Key policy and institutional reforms supported by the project 3. Benefits and target population 4. Institutional and implementation arrangements D. Project Rationale 1. Project alternatives considered and reasons for rejection 2. Major related projects financed by the Bank andor other development agencies 3. Lessons learned and reflected in the project design 4. Indications of borrower commitment and ownership 5. Value added of Bank support in this project E. Summary Project Analysis 1. Economic 2. Financial 3. Technical 4. Institutional 5. Environmental 6. Social 7. Safeguard Policies F. Sustainability and Risks Page 3 5 6 6 7 8 11 17 17 18 18 20 21 23 24 24 25 26 27 27 28 29 30 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Page 4 1. Sustainability 2. Critical risks 3. Possible controversial aspects G. Main Conditions 1. Effectiveness Condition 2. Other H. Readiness for Implementation I. Compliance with Bank Policies Annexes Annex 1: Project Design Summary Annex 2: Detailed Project Description Annex 3: Estimated Project Costs Annex 4: Cost-Effectiveness Analysis Summary Annex 5: Financial Summary Annex 6: Procurement and Disbursement Arrangements Annex 7: Project Processing Schedule Annex 8: Documents in the Project File Annex 9: Statement of Loans and Credits Annex 10: Country at a Glance Annex 11: Project Implementation Schedule Annex 12: Environmental Assessment and Mitigation Measures Summary Annex 13: Resettlement Annex 14: Project Financial Management System Annex 15: Financial Policy Objectives and Financial Innovations 31 31 31 32 32 34 34 35 45 57 61 75 78 92 93 95 99 101 102 115 118 127 MAP(S) IBRD 31659R Page 5 CHINA Shanghai Urban Environment Project Project Appraisal Document East Asia and Pacific Region EASUR Date: May 20,2003 Sector Managermirector: Keshav Varma Country Managermirector: Yukon Huang Project ID: PO70 19 1 Lending Instrument: Adaptable Program Loan (APL) Team Leader: Geoffrey Read Sector(s): Sewerage (73%), Solid waste management (20%), Sub-national government administration (7%) Theme(s): Other urban development (P), Pollution management and onmenta mental health (p), Access to urban services for the poor (P), Environmental policies and institutions (P) US$ m % US$ m US$ m Date Date- APL 1 200.00 39.0 3 12.20 512.20 07/01/2003 03/3 1/2009 People's Republic of China ' Load Credit APL 2 300.00 50.0 300.00 600.00 07/01/2005 09/30/2010 People's Republic of China ' Loan/ Credit lAPLL30an/ Credit 200.00 50.0 200.00 400.00 07/01/2007 09/30/2011 People's Republic of China ~~ Total 700.00 812.20 [XI Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Others: Amount (US$m): 200 Borrower Rationale for Choice of Loan Terms Available on File: Yes Proposed Terms (IBRD): Variable-Spread Loan (VSL) Grace period (years): 5 Commitment fee: 0.75% Years to maturity: 20 Front end fee (FEF) on Bank loan: 1.00% BORROWER 0.00 0.00 0.00 IBRD 82.50 117.50 200.00 LOCAL GOVTS. (PROV., DISTRICT, CITY) OF BORROWING 293.80 18.40 312.20 COUNTRY Total: 376.30 135.90 512.20 Page 6 Borrower: PEOPLES REPUBLIC OF CHINA Responsible agency: SHANGHAI MUNICIPAL GOVERNMENT principally through the Development Planning Commission, the Municipal Finance Bureau, and the Municipal Construction and Management Commission of Shanghai. Address: Shanghai Municipal People's Government, 200 Renmin Da Dao, Shanghai 200003 Contact Person: Mr. Han Zheng, Mayor Tel: 86 21 6355 9829 Fax: 86 21 631 1 9462 Email: Other Agency(ies): Shanghai Municipal Finance Bureau Address: 60, Jiu Jiang Road, Shanghai, China, 200002 Contact Person: Ms. Liu Hong Wei, Director Tel: 86 21 6321 9610 Fax: 86 21 6321 3896 Shanghai Development & Planning Commission; Shanghai Municipal Construction Commission; Shanghai Water Authority (SWA); Shanghai Municipal Sewerage Company (SMSC). Address: Shanghai Municipal People's Government, 200 Renmin Da Dao, Shanghai 200003 Contact Person: Mr. Jiang Yin Shi, Vice Director, Development Planning Commission of Shanghai; Mr. Xiong Jian Ping, Vice Chairman and Administrator, Shanghai Municipal Construction Commission; Mr. Ma De Rong, General Manager, Shanghai Municipal Sewerage Company (SMSC). Tel: 86 21 5652 8200 Email: smftbwb @public 1 .sta.net.cn Fax: 86 21 5652 9502 Email: xgf@public3.sta.11et.cn Estimated Disbursements Bank FY/US$m): Annual 20.00 31.00 43.70 56.60 30.90 17.80 Cumulative 20.00 51.00 94.70 151.30 182.20 200.00 Project implementation period: July 2003 to September 2008 Expected effectiveness date: 01/01/2004 Expected closing date: 03/3 1/2009 -2- Page 7 A. Program Purpose and Project Development Objective 1. Program purpose and program phasing: The Shanghai Municipal Government (SMG) has adopted an ambitious and forward-looking Five-Year Development Plan (2001-2005) in which it seeks to enhance the economic, financial, trade and manufacturing stature of Shanghai, with the objective of Shanghai becoming a sustainable, global and competitive Municipality and an international economic, trade and shipping center at the heart of the Yangtze River Delta economic region. China