Documentof The World Bank FOR OFFICIAL USEONLY ReportNo: 31449-CHA PROJECTAPPRAISAL DOCUMENT ON A PROPOSED LOAN INTHEAMOUNT OF US$100MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A FUZHOUNANTAIISLANDPERI-URBANDEVELOPMENT PROJECT November 18,2005 Transport Sector Unit East Asia and Pacific Region This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March2005) Currency Unit = Y u a n Y 8.3 US$1 US$O.l2 Y 1.00 F I S C A L YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS 3RR Third Ring Road South, Phase I1 I C B International Competitive Bidding ADB Asian Development Bank IDA International Development Association CQS Consultants' Qualifications km Kilometer EIA Environmental Impact Assessment LIBOR London Interbank Offered Rate EIRR Economic internal rate o f return m Meter EMP Environment Management Plan MBD Model BiddingDocuments FFB Fuzhou Finance Bureau M I S Management Information System FBS Fixed-Budget Selection MOF Ministryo f Finance FDRC Fuzhou Development and Reform mu A traditional unit o f land area inChina Commission approximately equal to 1/15 hectare or 667 square meters FEB Fuzhou Environmental Bureau N C B National Competitive Bidding FFB Fuzhou Finance Bureau N J B L NanJiang BinLu FMG Fuzhou Municipal Government NO2 Nitrogen dioxide FNUDP Fuzhou Nantai Peri-Urban N P V Net present value Development Project FPFB FujianProvincial Finance Bureau N S National Shopping FPTC Fuzhou Group Public Transport P M O Project Management Office Company FSL Fixed-spread loan PTS Passengertime savings FUCDC Fuzhou Urban Construction QCBS Quality- and Cost-Based Selection Development Company FWPMO Fuzhou World BankProject R A P Resettlement Action Plan Management Office GDP Gross domestic product SEPA State Environmental Protection Administration GIS Geographic Information System SOE Statement o f Expenditures GPS Global Positioning System sq km Square kilometer GREO Guangzhou Road Extension Office sq m Square meter ha Hectare TA Technical Assistance IBRD International Bank for voc Vehicle operating cost Reconstruction and Development I C Individual Consultant V S L Variable -spread loan Vice President: Jemal-ud-din Kassum, EAPVP Country ManagedDirector: David Dollar, EACCF Sector Manager: Jitendra N.Bajpai, EASTR Task Team Leader: Shomik Raj Mehndiratta, EASTR CHINA FuzhouNantaiIslandPeri-UrbanDevelopmentProject CONTENTS Page A. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 1. Country and Sector Issues................................................................................................... 1 2. Rationale for Bank Involvement......................................................................................... 2 3. Higher-Level Objectives to Which the Project Contributes ............................................... 3 B. PROJECT DESCRIPTION ................................................................................................. 3 1. Lending Instrument............................................................................................................. 3 2. Program Objective and Phases............................................................................................ 3 3 . Project Developmnt Objective and Key Indicators........................................................... 3 4. Project Components ............................................................................................................ 4 5. Lessons Learned and Reflected in the Project Design........................................................ 4 6. Alternatives Considered and Reasons for Rejection........................................................... 6 C. IMPLEMENTATION .......................................................................................................... 6 1. Partnership Arrangements................................................................................................... 6 2. Institutional and Implementation Arrangements ................................................................ 6 3. Monitoring and Evaluation of Outcomes/Results ............................................................... 8 4. Sustainability and Replicability .......................................................................................... 8 5. Critical Risks and Possible Controversial Aspects ............................................................. 8 6. Loan Conditions and Covenants ......................................................................................... 9 D. APPRAISAL SUMMARY ................................................................................................. 10 1. Economic and Financial Analyses .................................................................................... 10 2. Technical........................................................................................................................... 11 3. Fiduciary ........................................................................................................................... 12 4. Social................................................................................................................................. 13 5. Environment...................................................................................................................... 13 6. Safeguard Policies............................................................................................................. 14 7. Policy Exceptions and Readiness...................................................................................... 15 ANNEX 1: COUNTRY AND SECTOR OR PROGRAM BACKGROUND ........................ 16 ANNEX 2: MAJOR RELATEDPROJECTSFINANCED BY THE WORLD BANK AND/OR OTHER AGENCIES ................................................................................................. 25 ANNEX 3: RESULTS FRAMEWORK AND MONITORING .............................................. 26 ANNEX 4: DETAILED PROJECT DESCRIPTION .............................................................. 30 ANNEX 5: PROJECT COSTS .................................................................................................. 35 ANNEX 6: IMPLEMENTATIONARRANGEMENTS ......................................................... 37 ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS 39 ANNEX 8: PROCUREMENT ARRANGEMENTS ................................................................ 44 ANNEX 9: ECONOMIC AND FINANCIAL ANALYSIS ...................................................... 50 ANNEX 10: SAFEGUARD POLICY ISSUES ......................................................................... 60 ANNEX 11: PROJECT PREPARATION AND SUPERVISION .......................................... 73 ANNEX 12: DOCUMENTS INTHE PROJECT FILE .......................................................... 75 ANNEX 13: STATEMENT OF LOANS AND CREDITS ...................................................... 77 ANNEX 14: COUNTRY AT A GLANCE ................................................................................ 82 MAP IBRD 33943: China: FuzhouNantai IslandPeri-Urban Development Project CHINA FUZHOU NANTAI ISLANDPERI-URBAN DEVELOPMENT PROJECT PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASTR Date: November 16,2005 Team Leader: Shomik Raj Mehndiratta Country Director: David R. Dollar Sectors: General transportation sector (100%) Sector ManagedDirector: Jitendra N.Bajpai Themes: Other urban development (P) Project ID: PO70519 Environmental screening category: Full Assessment LendingInstrument: Specific Investment Loan Safeguard screening category: Limited impact [XI Loan [ ] Credit [ ] Grant [ 3 Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 100.00 Proposed terms: FSL DEVELOPMENT Total: 163.07 161.39 324.46 Borrower: People's Republic o f China, represented by Ministry o f Finance ResponsibleAgency: Fuzhou Development and ReformCommission, #21 Douxi Road, Fuzhou, Fujian 350005, China. Tel: +86 591 83367591 Fax: +86 (0) 591 334 6094 Does the project depart from the CAS in content or other significant respects? Re$ PAD A.3 [ ]Yes [XINO Does the project require any exceptions from Bank policies? Re$ PAD D.7 Have these been approved by Bank management? N.A I s approval for any policy exception sought from the Board? [ ]Yes [XINO Does the project include any critical risks rated "substantial" or "high"? Re$ PAD C.5 [ ]Yes [XINO Does the project meet the Regional criteria for readiness for implementation? Ref: PAD D.7 [XIYes [ ] N o Project development objective Re$ PAD B.2, TechnicalAnnex 3 The objective o f the project i s to support sustainable perkurban development in Fuzhou (as it expands to include Nantai Island) with the provision o f strategic transport infrastrwture and by strengthening the city's decision support system on land development and management. Specifically, the project supports perkurban development in Nantai Island with: (a) investments intransport access to Nantai Island (road and public transport); and (b) TA that would help the city to strengthen the manner in which the development i s planned (to encourage development patterns that promote public transport while integrating environmental concerns upstream in the planning process), and the manner in which the development i s implemented (to improve urban design, preservation o f sensitive and historic neighborhoods, and to increase the city's capacity to phase and stage development in a market environment while increasing the quality and competitiveness o f public transport). Project description [one-sentence summary of each component] Re$ PAD B.3.a, Technical Annex 4 A strategic road infrastructure component (US$248.64 million) that includes construction o f key road infrastructure to facilitate the urbanization o f Nantai Island. A public transport component (US$20.50 million) that facilitates the development o f public transport in Fuzhou and enhances the accessibility o f Nantai Island to public transport. An institutional development and technical assistance component (US2.90 million) that includes: development o f public transport plans, capacity building for regulation, planning and operations o f public transport, and capacity building to support development management. Which safeguard policies are triggered, if any? Re$ PAD 0.6, TechnicalAnnex 10 1, Environmental Assessment (OP/BP/GP 4.01) 2. Cultural Property (OPN 11.03, being revised as OP 4.11) 3, Involuntary Resettlement (OP/BP 4.12) Significant, nonstandard conditions, if any, for: Re$ PAD C.7 Boardpresentation None Loadcredit effectiveness: The Loan Agreement specifies that the Project Companies Subsidiary Loan Agreements shall have been executed by Fuzhou and each o f the Project Companies in a manner satisfactory to the Bank. Covenants applicable toproject implementation: Fuzhou shall: - by not later than March 1 in each year, commencing on March 1, 2006, and thereafter, untilthe completion o f the Project, exchange views with the Bank on its proposed road maintenance plan and a budget for the following fiscal year, and thereafter approve and implement such plan and budget, taking into account the Bank's comments, if any; - by not later than October 1, 2008, prepare and furnish to the Bank for its review and comments, an operations and maintenance plan, for the operation and maintenance o f the roads constructed under the Project, and thereafter, implement, or cause to be implemented, said plan taking into account the Bank's comments, if any; and - retain the services o f a team o f construction supervision experts, whose qualifications, experience, and terms and conditions o f employment shall be acceptable to the Bank for carrying out the supervision o f each Civil Works contract. A. STRATEGIC CONTEXT AND RATIONALE 1. Countryand Sector Issues The CentralRole of Chinese Cities As inthe last two decades, urbanization and urban development are likely to remain central pillars o f China's overall development strategy in the foreseeable future.Inthe last 25 years, China's per capita gross domestic product (GDP) denominated in U.S. dollars has more than quadrupled, with more than 400 millionpeople lifted out o f absolute poverty (incomes lower than US$1 a day), an achievement without parallel in the annals o f development. Both the Government o f China and the World Bank have continually recognized the central role o f China's cities inthis transformation, and recognized the need for them to continue to grow and function efficiently and effectively. China's Tenth Five-Year Plan (2001-06) characterized the period as a transition from a rural to an urban economy. Cities, particularly the fast-growing urban centers in the coastal regions, added 150 million residents just in the period between 1995 and 2002. The urban centers o f four coastal provinces-Fujian, Guangdong, Jiangsu, and Shanghakhave attracted 50 percent o f all foreign direct investment. The trend toward increased urbanization is expected only to accelerate. Inrecommendations for China's upcoming 1lthFive-Year Plan, the Bank has identified continued urbanization and the concentration o f rural labor in fewer major urban centers in the coastal areas as important contributors to future growth. Forecasts suggest that as many as 200 million people could move from rural to urban centers between 2000 and 2020, which would be the largest such migration in human history. SpatialGrowth, a Key Urban Priority These unprecedented economic and social transformations are placing severe demands on urban infrastructure and a traditionally dense urban spatial structure. Even as cities are preparing for unprecedented population inflows, increased incomes are also creating a demand for urban expansion Like their urban counterparts around the world, increasingly prosperous current . residents want to live in larger dwellings in lower-density settings. This transformation has resulted in a large demand for more urban land inthe aggregate, particularly in the fast-growing coastal cities. Inresponse, peri-urban development has become a key element o f the urbanization strategy for Chinese cities. Primarily by way o f leading investments in infrastructure, particularly strategic transport investments to facilitate access, cities are urbanizing agricultural and mixed-use land on the periphery. Adequate DecisionSupport Systems Are Essentialto Success Necessary and inevitable though this process o f expansion is, its success is dependent on adequate planning and implementation systems. The challenges are formidable, however, and local decision makers and planning professionals alike are still exploring ways to deal effectively with issues such as the following: 0 Access:No more than 20 percent o f urban residents are expected to have access to personal transport by 2020, but this figure represents enough automobiles to completely congest any area not designed carefully from an urban transport perspective. Key challenges include planning and buildingtransit-oriented cities, adapting public transport - 2 - to the needs o f expanding cities, and causing the transformation from "building" to "managing" transport assets. Planningmechanisms:It is important to develop planning mechanisms that successfully integrate a variety o f priorities, suchas preserving sensitive environmental assets, integrating transport and land use planning, and incorporating urban livability concerns into the urban planning process. Implementationmechanisms:Developing implementationmechanisms to effectively monitor development and market response i s critical, so that the timing o f development responds to demand in a decentralized market-driven economy with a dynamic completely different from the old central planning framework in a manner that minimizes the fiscal exposure o f urban expansion Recent global experience suggests that the risks o f "not getting it right" are significant. Transit- oriented development, preservation o f historic neighborhoods, and other essential characteristics o f livable cities need continuous careful planning and implementation efforts. Similarly, unless urban growth i s directed around relatively dense clusters along well-defined corridors, the competitiveness o f public transport suffers, which usually leads to interminable congestion, poor air quality, and ultimately degradation in the quality o f urban life. Additionally, municipal investments in infrastructure that are too far in advance o f demand expose cities to significant financial risk. 2. Rationalefor Bank Involvement Inthe context o f urban expansion and per%urban development, the Bank can provide valuable support by financing strategic infrastructure investments and by supporting the development o f institutions, policies, and mechanisms to encourage environmentally, socially (transit-oriented, clustered development, and effective public transport service), and fiscally (demand-driven) sustainable urban expansion. Fuzhou, the capital o f Fujian Province, has asked the World Bank to support the construction o f three major road projects and associated public transport infrastructure to facilitate the urbanization o f Nantai Island. This would constitute the bulk o f the short-term program for major transport infrastructure on this partially urbanized island, which is located immediately south o f the city center. (In 1999 the 142-square-kilometer island had 344,000 residents, half o f whom lived in the urbanized 12-square-kilometer area. Fuzhou's master plan and other island-specific plans envision that by 2020, 121.3 square kilometers will be urbanized and will house 800,000 residents. See Annex 1 for more details.) The Bank is helping to ensure that these investments are made in ways that support public transport use, encourage the use o f n o nmotorized modes, and thus assist the low- income population and reduce dependence on private vehicle use. Fuzhou has also asked the Bank for assistance on issues related to management o f the peri-urban development. This coastal city i s growing rapidly (at an annual rate o f 13-16 percent in the last decade) and i s relatively prosperous (the city's expectations are that per capita income o f US$1,070 per year (2002) will increase to US$lO,OOO per year by 2020, and the urban population o f 1.58 million (2002) will grow to more than 2.4 million by 2020). Available plans provide a conceptual vision for development, focusing on Nantai Island development as a - 3 - centerpiece, and outline an ambitious construction agenda for roads, power, water supply, and sewerage facilities. The systems, institutions, and processes needed to implement such a plan successfully need strengthening. Through technical assistance (TA), training, and exposure to global experience with urbanization, the Bank is supporting Fuzhou buildcapacity to plan and implement their peri-development strategy. Inthis context, the city is revising its urbantransport and urban development master plans (the current 1995-2010 master plan i s due to be revised in2006) and has asked the Bank to assist in the revision process. This i s the first time the Bank has been asked to play such a role in China. Inparticular, the Bank is providing assistance indeveloping a new public transport master plan The Bank i s also supporting the city in strengthening its capacity to monitor and implement important elements of their expansion strategy. Finally, Bank assistance also provides the city an opportunity to gain from the Bank's extensive experience with institutional development, procurement, and financial management, both globally and with China. Even though Fujian Province has worked with the Bank, this i s the first project that has beenprepared and implemented by Fuzhou Municipality. The city has already benefited from the analytical rigor o f Bank project preparation and appraisal to achieve optimal project design. Value-added during implementation would include cost savings through procurement under Bank guidelines, as well as improved project management and construction quality. 3. Higher-LevelObjectives to Which the ProjectContributes The Bank's Country Assistance Strategy recognizes the magnitude o f China's urban development challenge, and supports China in making two transitions: 0 From a rural, agricultural society to an urban, industrial society; and 0 From a centrally planned economy to a more globally integrated, market-based economy. B. PROJECTDESCRIPTION 1. LendingInstrument The Bank will finance the project through a Specific Investment Loan The Borrower has selected the variable-spread loan (VSL) option in which the spread over the London Interbank Offered Rate (LIBOR) i s reset every semester. The Borrower's main reason for selecting a V S L rather than a fixed-spread loan(FSL) i s because FSL charges are slightly higher than V S L charges and because the Borrower does not foresee usingthe conversion option o f the FSL. V S L repayment terms are governed by standard country terms. 2. Program Objective and Phases Not applicable. 3. Project DevelopmentObjectiveand Key Indicators The objective o f the project i s to support sustainable perkurban development in Fuzhou (as it expands to include Nantai Island) by providing strategic transport infrastructure and by strengthening the city's decision support system on land development and management. Specifically, the project supports perkurban development in Nantai Island with (a) investments intransport access to Nantai Island (road and public transport) and (b) TA that would help the - 4 - city to strengthen the manner in which the development i s planned (to encourage development patterns that promote public transport while integrating environmental concerns upstream in the planning process), and the manner in which the development is implemented (to improve urban design, preservation o f sensitive and historic neighborhoods, and to increase the city's capacity to phase and stage development in a market environment while increasing the quality and competitiveness o f public transport). Key outcome indicators (details in Annex 3) are indicators measuring the urban activity in Nantai Island (population and size o f manufacturing industry), the reduction in travel times between locations in Nantai Island and the central city o f Fuzhou, and the adoption o f the recommendations o f the TA leading to outcomes, such as more effective transit-oriented development and more effective public transport service. Key output indicators are implementation o f selected priority investmentsand successful completion o f the TA. 4. Project Components The project has three components: 0 A strategic roadinfrastructurecomponent (US$248.64 million), which includes construction o f key transport infrastructure to facilitate the urbanization o f Nantai Island. Completion o f the southern section o f the third ring road (3RR) will open up significant new areas o f development and-together with the KuiqiBridge-will improve the linkages between the island and the existing urban area and port. Construction o f Nan Jiang BinLu (NJBL) will stimulate the redevelopment o f older industrial areas in the northern part o f the island and improve public access to the MinRiver bank. This component will also include consulting services for construction supervision. 0 A public transport component (US$20.50 million) that facilitates the development o f public transport in Fuzhou and enhances the accessibility o f Nantai Island to public transport. This component includes construction o f an overnight parking and maintenance depot for buses, a passenger interchange terminal, and a dispatch center. In addition, enhancement o f orrstreet operation and general management i s sought through the introduction o f modern technology, increased computerizatioq and on-street priority for transit on a key corridor. An institutionaldevelopment and TA component (US$2.90 million) to maximize the benefits and sustainability o f investment components, and to support capacity-building efforts to strengthen Fuzhou agencies. Specific issues that this component will focus on include the development o f public transport plans, capacitybuilding for regulation, planning and operations o f public transport, and capacity buildingto support development management. 5. LessonsLearned and Reflectedin the ProjectDesign Ingeneral, the Operations Evaluation Department (OED) and the Quality Assurance Group (QAG) assessments of the Bank's infrastructure portfolio in China have confirmed satisfactory project implementation, outcomes, and project management. Experience from a full range o f projects financed by the Bank in the transport and urban sectors points to the importance o f borrower ownership (particularly of institutional development components) and appropriateness o f capital investments, as well as financing and institutional arrangements for proper operations and maintenance. This project has been designed to incorporate these lessons: institutional - 5 - development and sustainability are important project objectives. Specific design issues incorporating learning from past operations include the following: Integratedvs. focused approaches.Inthe past, the Bank has favored an integrated approach inperi- urbanprojects, and has invested indifferent areas of infrastructure, including transport, water, wastewater, and energy. Although such a multisector project has the advantage o f facilitating some cross-sectoral interchange and dialogue, it makes for complicated "Christmas tree" projects that are difficult to implement and that test the client's capacity. Eschewing comprehensiveness, this project has focused on strategic investments in one sector complemented by institutional strengthening measures and TA to support peri- urban development management. Rapid growth and unprecedentedmotorizationrate.Rapid economic growth is being accompanied by an unprecedented growth in motorization rates in Chinese cities. Demand forecasts and economic analyses relyingon traditional growth indicators have repeatedly been found to be overly conservative. The project economics takes account o f current trends and uses realistic growth assumptions in the economic analysis. MaximizingBank's value-added on upstreamplanningdecisions. Inprinciple, the highest value the Bank can provide to a client i s in mainstreaming good practice principles duringthe conception and identification o f investmentprojects andprograms. However, the requirements of the Chinese domestic planning process limit the flexibility in the choice o f investment components. InFuzhou, as with other Bank-financed projects in China, the Bank was presented with a project proposal inwhich key investment components were already predefined. As with past projects, the task team appraised the proposed investments, evaluating their scale and design. Broader issues relating to programming and prioritizing infrastructure are being discussed with the client as part o f the capacity-building process with focus on the city's future downstream investment program. Inaddition, dialogues with national authorities stress the importance o f upstreamprocesses o f selection and conceptual design. Participationof decision makers.The mayor and the directors o f the major government agencies concerned have a very important decisiorr makingrole in any urban transport project. Therefore, one o f the main tasks for the Bank has been to maintain a close dialogue with, and gain the support of, municipal government, especially the key decision makers. This was particularly true in Fuzhou where the political leadership plays a bigger hands-on role in transport planning decisions in contrast withother Chinese cities the Bank has worked in.The Bank worked closely with the mayor and the standing vice mayor ofFuzhouduring preparation. Disbursement. Disbursement lags have been an issue with projects inChina as a result o fa combination o f factors, including delays inpreparation o f procurement packages, contract awards that are significantly lower in value than expected, and complicated and time- consuming processes for fund withdrawal. The project team has worked carefully to ensure that the investment compollents are fully prepared (the possibility o f retroactive financing also exists for a road subcomponent). In addition, implementation arrangements, funds flow, and unit costs have been reviewed to minimize the possibility o f disbursement delay. - 6 - 6. Alternatives Considered and Reasonsfor Rejection ProjectObjectives Instead o f developing an integrated project that addresses urban transport issues in Fuzhou, the focus o f this project i s to address perkurban development issues for Nantai Island. This decision directed the choice o f investments and had a key role in defining the institutional development component o f the project. InvestmentComponents Inaddition, for each proposedinvestment component, "with" and "without" project options were analyzed, and components were confirmed only after the analysis confirmed their economic benefits. Alternative scale and design options for individual components were also considered (details in Annex 10). Inparticular, the city decided to drop one investment (a dyke along t k MinRiver)and significantly modified another component (a 5-kilometer section ofNJBL was dropped) that would have encroached on some locally significant wetlands. The current proposals maintain a balance between technical, economic, social, and environmental considerations. C. Implementation 1. PartnershipArrangements The project i s free-standing, and does not have any other cofinanciers. 2. Institutionaland ImplementationArrangements The project will be executed by the Fuzhou Municipal Government (FMG). The Fuzhou Municipal Government has established the Fuzhou World Bank Project Management Office (FWPMO) under the Fuzhou Developmnt and Reform Commission (FDRC) to coordinate project preparation, authorize disbursements, manage procurement, and monitor implementation progress. The director o f the Fuzhou Development and Planning Commission i s the designated head o f the FWPMO. Besides a deputy, the FWPMO comprises a resettlement specialist, a financial staff, and a procurement coordinator (see below for procuremnt arrangements). A leading group has been established to take the lead on technical issues and oversee project implementation. The leading group includes representatives from the following agencies: the Fuzhou Municipal Government, Fuzhou Development and Planning Commission, Fuzhou Urban Planning Bureau, Fuzhou Land Management Bureau, Fuzhou Environmental Bureau (FEB), Fuzhou Construction Bureau, Fuzhou Financial Bureau (FFB), and Fuzhou Cultural Heritage Bureau. Responsibility for implementation o f the individual components will be as shown in Table 1, - 7 - Table 1:Responsibility for Implementationof the IndividualComponents Component Responsible Agency Road Component Fuzhou Urban Construction Development Company (FUCDC) Public Transport Fuzhou Group Public Transport Company (FPTC) Technical Assistance FWPMO will sign contracts, and specific agencies o f the leading group will take the lead on technical issues (see Annex 6 for more details). Specific project management activities include the following: Environment.The Fuzhou Environmental Bureauwill be responsible for environmental management duringproject implementation. An independent agency has been selected as the environmental monitoring agency. 0 Resettlement. The Fuzhou Municipal Government has established a multilevel organizational framework to plan and implement resettlement. This framework has resettlement offices at different levels o f government, including project level, prefecture and city level, and district level. They have been staffed with experienced experts, and their responsibilities have been specified in the Resettlement Action Plan (RAP). 0 Procurement.All procurement will be carried out by the FuzhouUrbanConstruction Development Company and the Fuzhou Group Public Transport Company for their respective components with the coordination and assistance o f the FWPMO. With the exception o f the NJBL subcomponent of the strategic road infrastructure component (see below), the companies and the FWPMO will also be assisted by three procurement agents hired by Fuzhou for this purpose. The three agents are the China Far-East International Tendering Company, China International Tendering Company (CITC), and CNCCC International Tendering Company. These agents have more than 20 years o f handling Bank-financed procurement. Procurement agents will assist with the preparation and advertisement o f bidding documents, bid opening, bid evaluation, and so forth Inthe case ofNJBL, to facilitate advance works that will be partially financed via retroactive financing, it was decided that the procurement process would be primarily managed by the Fuzhou Urban Construction Development Company with the assistance o f FWPMO. A contract for advance works for this subcomponent has been signed (after it was found to be consistent with Bank guidelines duringa prior review). 0 Financialmanagement. The special account will be managed by the Fujian Provincial Finance Bureau (FPFB), and financial statements will be consolidated with the assistance o f the FWPMO. The FWF'MO will be kept fully informed o f all withdrawals from the special account. 0 Funds flow The Bank loan will be signed between the People's Republic o f China through the Ministry o f Finance (MOF) and the Bank. Onlending arrangements for the loan will be signed between the MOF and the Government o f Fujian Province through the Fujian Provincial Finance Bureau, then between the Fujian Provincial Finance Bureau and the Fuzhou Finance Bureau, and finally between the Fuzhou Finance Bureauand two o f the implementing entities (the Fuzhou Urban Construction Development Company and the Fuzhou Group Public Transport Company). The loan's special account will be established and managed by the Fujian Provincial Finance Bureau - 8 - 3. Monitoring and Evaluation of Outcomesmesults Annex 3 lists the main outcome indicators for the project, as well as the principal results indicators for each component. Additional indicators are listed in the various documents in the project files (for example, the Environmental Management Plan (EMP)). FWPMO and Project Implementation Units will regularly collect the data requiredfor monitoring and evaluation o f outcomes. The Fuzhou Municipal Government and FWPMO will review the results on the basis o f various progress reports, and take appropriate corrective action where needed. 4. Sustainability and Replicability Based on the Bank's experience with the transport sector in China, the physical assets are expected to be constructed to high-quality standards and completed on schedule. Moreover, detailed designs and construction implementation will be closely supervised. Long-term sustainability, particularly o f the road assets, will depend on effective and timely maintenance. Road maintenance budgets in Fuzhou are comparable to those o f other cities with similar networks. Budgets have increased 30 percent in the last three years, in response to the increase in the size o f the network. The Bank's assessment i s that although the budget for basic maintenance appears to be available, a fundamental issue is that budget estimates are based on coarse standardized estimates o f cost and not based on any real estimate o f the state and needs o f the system. The city has started to adopt a maintenance management system which, if properly used, would allow the maintenance agency to build more credible ,transparent budget estimates. Such estimates could be a basis for discussions between various city agencies to ensure that adequate resources are available for the real maintenance needs o f the city's roads. A loan covenant requiring an annual review o f the Fuzhou Municipal Government's road maintenance budget and planhas been agreed upon. The goal o f the discussions will be to understand the city's road maintenance needs and identify ways in which road maintenance needs can be better forecast and provided for. The other key issue relating to sustainability i s the realization o f Fuzhou's urban development plans. Although Fuzhou i s committed to the development o f Nantai Island, successful realization of these plans will depend on adequate planning, institutional coordination, and implementation. The institutional capacity-building component has been designed to strengthen the city's capacity in this regard. Ultimately long-term sustainability will depend on the success the city has in developing the following: 0 A planning process that adequately integrates the impacts o f different sectors, incorporates environmental and social considerations, and i s supported by prudent fiscal planning. 0 Effective institutions to implement plans, and particularly to manage and react to the demands o f a market economy. An attractively built urban environment inNantai Island and high-quality access bypublic transport. 5. Critical Risks and Possible Controversial Aspects The factors affecting sustainability also pose risks in achieving the project's development objectives. Critical risks to implementation o f the investments are related to procurement and quality o f construction. A procurement assessment has been conducted and an action plan i s in place to reduce procurement-related risks. TA related to construction supervision i s included to address risks related to construction quality. The risk in the successful implementation o f the institutional strengthening component i s lack o f ownership and acceptance. This component has - 9 - been carefully designed from project inception to be responsive to the needs and demands o f concerned Fuzhou agencies, and the progress o f the component will be closely monitored during implementation to ensure that the component remains flexible enough to retain ownership. Critical exogenous risksare related to continued economic and population growth o f Fuzhou and its perkurban areas. Continued growth depends on the state o f the global economy and on Fuzhou's ability to continue to attract capital investment and jobs to its light industryeconomic base. Also important will be government policies and macro-trends relating to ruraLto-urban migration. However, this risk is lessened since Fuzhou i s an important coastal industrial center and i s likely to remain an important element o f China's urbanization and industrialization strategy. 6. LoanConditionsand Covenants EffectivenessConditions Apart from standard legal issues, the Loan Agreement specifies that the Project Companies Subsidiary Loan Agreements shall have been executed by Fuzhou and each o f the Project Companies in a manner satisfactory to the Bank. Stipulationof the LegalCovenants The legal covenants specify the following stipulation: The proceeds o f the loan will be onlent to Fuzhou Municipality on the same terms and conditions as the Bank loan, with the municipality bearing the foreign exchange risk. ImplementationCovenants Fuzhou shall 0 by not later than March 1 ineach year, commencing on March 1, 2006, and thereafter, untilthe completion o f the Project, exchange views with the Bank on its proposedroad maintenance plan and a budget for the following fiscal year, and thereafter approve and implement such plan and budget, taking into account the Bank's comments, if any; 0 by not later than October 1, 2008, prepare and furnishto the Bank for its review and comments, an operations and maintenance plan, for the operation and maintenance o f the roads constructed under the Project, and thereafter, implement, or cause to be implemented, said plan taking into account the Bank's comments, if any; and 0 retain the services o f a team o f construction supervision experts, whose qualifications, experience, and terms and conditions o f employment shall be acceptable to the Bank for carrying out the supervision o f each Civil Works contract. Reportingand Monitoring The following reports shall be submitted to the Bank for its approval and comments: 0 Monitoringreports:The Fuzhou Municipal Government is to monitor the implementation o f the Environmental Management Planand Resettlement Action Plan and submit twice- yearly monitoring reports to the Bank, by February 15 and August 15 of each year, starting on February 15,2006, covering the periods JanuaryJune and July- December, respectively. 0 Progress reportingand midprojectreview: The Fuzhou Municipal Government is to submit a semiannual progress report on project implementation, by February 15 and - 1 0 - August 15 o f each year, starting with February 2006 and untilthe project is completed. The reports will cover the periods JanuaryJune and July-December, respectively. Audit The Fuzhou Municipal Government shall maintain a financial management system, and shall cause the Fuzhou Urban Construction Development Company and Fuzhou Group Public Transport Company to do the same. The Fuzhou Municipal Government shall also provide annual audit report and project consolidated financial statements in accordance with accounting standards acceptable to the Bank within six months after the end o f each calendar year. The Fuzhou Municipal Government shall meet standard annual auditing requirements, and shall cause the Fuzhou Urban Construction Development Company and Fuzhou Group Public Transport Company to do the same. D. AppraisalSummary 1. Economicand FinancialAnalyses EconomicAnalysis EIRR= 15.5 percent, NPV (12 percent ) =U S 5 9 million An economic evaluation was conducted for the strategic road infrastructurecomponent. This accounts for about 88 percent o f the loan (91 percent o f total project cost) and includes three road investments: NJBL, the second phase o f the 3RR (the third ring road), and the KuiqiBridge. The principal measured benefits o f the project are savings invehicle operating costs, reduced congestion, and passenger-time savings. The estimated overall economic internal rate o f return (EIRR) for the project is 15.5 percent. The overall economic net present value (NPV), based on a 12 percent discount rate, i s estimated at Y 489.3 million (US$59.0 million). (See Table 2.) The breakdown o f EIRR and NPV for each component i s as follows. An analysis o f the evaluation results and a description o f the method used to derive them are provided in Annex 9. Table 2: Summary of Economic EvaluationResults EIRR (in YO) NPV (US$ m, 12%) NJBL 24.4 34.7 3RR 13.5 16.3 KuiqiBridge 12.8 8.0 Total project 15.5 59.0 The design o f the first phase of the bus depot (planned on land already available for the bus company) has been optimized from a cost-effectiveness perspective. The depot will reduce dead mileage and will eliminate the need for onstreet overnight parking of buses in the area. The improved maintenance facilities should result in a higher quality o f service for passengers as a result o f higher productivity, lower breakdown rates, and better bus availability. In the longer term, it should help reduce unit operating costs. Implementation o f the bus priority measures will benefit passengers in time savings, as well as operators in higherbus productivity, which translates to lower operating costs. Global experience suggests that measures that give priority to public transport over private cars have great - 11- aggregate and distributional benefits inurbanenvironments, particularly insituations where most trip-makers do not have access to private vehicles (as i s the case in Fuzhou). FinancialAnalysis The Bank conducted an assessment of municipal financial capacity to provide counterpart funds for the project. The scope of the assessment included the current and projected fiscal income and expenditure, urban infrastructure revenue and expenditure, and the capacity remaining for capital investment outside the Bank project. The revenue available to Fuzhou Municipality has grown from about Y 5.00 billion in 1999 to Y 8.36 billion in2003. Like other Chinese cities, the municipality finances infrastructureby combining budget revenues with off-budget sources from a variety o f "funds." The capital investment funding for the municipality was Y 385 million in 2003 (about 5 percent o f revenues). At their highest level, the counterpart funds requiredo f the city would be more than three-quarters o f the revenues available for capital investment for 2003. The Fuzhou Finance Bureauanticipates considerable growth both in total available revenues and inrevenues available to finance capital investments inthe coming years. However, no reliable projections o f revenue and expenditure for future years are publicly available, and it i s difficult to determine whether the city's financial capacity in the coming years would be adequate to fund the ambitious infrastructure construction program that i s planned (see details in Annex 9). At the same time, the Bank-financed project will represent only a small fraction o f the infrastructure- related annual expenditure that has been incurred in the last three years (details in Annex 9). Additionally, consistent with common practice, the municipality has decided to use domestic bank loans to finance about half (54 percent) o f the counterpart funding to supplement municipal investment funds. (The municipal government has provided the Bank with all signed lending agreements for the domestic bank loans.) Finally, in the absence o f credible estimates o f future municipal revenue and expenditure, the Fujian Provincial Finance Bureay after consultation with Fuzhou, has guaranteed the availability o f adequate counterpart funds to implement the project. An analysis o f the available data indicates that the counterpart funding requirements, including interest during construction, commitment fee, and interest for the domestic bank loan, will not pose a hurdle to implementation. 2. Technical RoadComponent The proposed components were studied and designed by high-quality, well-qualified, and experienced Chinese design institutes. Project designs are technically sound, represent the most appropriate cost-effective alternative, and are based on sound engineering practice. An extensive analysis of conceptual and design alternatives has been conducted (summarized in Annex 10). The detailed project description i s contained in Annex 4. Given the Bank's experience with urban roads in other projects in China, particular attention was given to the following: 0 Planning issues: (a) Analysis o f alternative alignments to minimize adverse social and environmental impacts; (b) Integration o f major road proposals with local road networks, including design o f appropriate intersections and provision o f access to adjacent development sites; (c) Provision o f pedestrian and nommotorized transport facilities, traffic management, and road safety arrangements; - 12- (d) Public transport compatibility inthe provision o f bus stops and lay-bys as appropriate; (e) Phasing o f construction based on scale and timing o f traffic demand; and (0 Appropriate review of cost estimates. 0 Detailed design issues: (a) Sufficient geological investigation and appropriate design solutions for clay soils; and (b) Street furniture and accessibility. The resulting designs generally are in accordance with international good practice. PublicTransport Component Inthe case o fthe depot and interchange, the feasibility studypreparedby the Fuzhou Planning and Design Research Institute was revised several times to reflect agreed-upon improvements in design. Particular attention was paid to the following: (a) Analysis o f options to minimize adverse social and environmental impacts; (b) Making more intensive use o f the land area, enabling the depot to achieve efficiency standards higher than those officially specified; (c) Minimizing conflicts between pedestrians and buses; (d) Facilitating ease o f transfer betweenroutes; and (e) Facilitating multidirectional bus access and egress to the site. Details o f trunk and feeder routes and the optimum stand layout will be reexamined as part o f the associated TA. In addition, a feasibility study for the bus priority corridor i s currently being finalized. 3. Fiduciary FinancialManagement The Bank concluded, on the basis o f guidelines issued by the Financial Management Sector Board on October 15, 2003, that the project meets minimumBank financial management requirements, as stipulated in BP/OP 10.02. The project's implementingagencies are taking the necessary actions to ensure that the project will have inplace an adequate financial management system that can provide, with reasonable assurance, accurate and timely information on the status o f the project in the format required by the Bank (see Annex 7). Procurement The Bank concluded, on the basis o f appraisal, that the project's implementing agencies are taking the necessary actions to ensure that the project will have in place an adequate procurement capacity that can implement procurement as required by the legal documents and the Bank's procurement guidelines (see Annex 8). An action plan to strengthen the procurement capacity o f the implementing agencies has been discussed with FWPMO and agreed on. As already mentioned, FWPMO has hired three procurement agents with extensive experience o f Bank procurement guidelines to assist in procurement management. The plan also calls for the preparation and dissemination o f a project- specific procurement manual, training workshops, and measures to avoid excessive cost overruns and improve procurement economy and efficiency. Ways in which the Tendering and Bidding Law o f China differs from Bank guidelines were addressed inthe procurement assessment, and clarifications for the procedures to be followed for Bank-financed National Competitive Bidding (NCB) procurement have been included in the Project Agreement. - 13- 4. Social The project supports the development of public transport, pedestrian, and bicycle facilities, all o f which have desirable distributional benefits. However, the project has adverse impacts related to the need for land acquisition and involuntary resettlement. A Resettlement Action Planhas been developed by the Guangzhou Road Extension Office (GREO) for NJBL and the 3RR components. According to the Resettlement Action Plan, these components o f the project will affect a residential committee and 11 villages in 3 townships o f Chanshan District in Fuzhou by permanent land acquisition of 744 mu (50 hectares) o f land (54 percent collective agricultural land, 30 percent orchards, and 16 percent uncultivated). Intotal 1,122 households (3,379 persons) are affected, of which 603 households (2,040 people) are in rural areas. Demolition will be carried out o n 229,748 square meters o f structures (30 percent urban and the rest rural). A Catholic church (the Fanchuanpu Cathedral) will also be affected. The Resettlement Action Planhas been developed in accordance with local laws and policies o f the World Bank OP 4.12 on Involuntary Resettlement, and is based on consultations with the affected people. The plans (details inAnnex 10) describe in detail the impacts, affected populations, consultation process, rehabilitation measures, budget, and implementation and monitoring arrangements. The final Resettlement Action Planwas adopted formally by the Fuzhou Municipal Government on March 18, 2005, and disclosed locally and in the Bank's Infoshop (with the authorization o f the Fuzhou Municipal Government) in March 2005 (Infoshop March 30, 2005). The exact alignment o f KuiqiBridge has not been finalized. The scale and exact location o f the second phase o fthe bus depot has also not been finalized. These investments are scheduled for construction after the first two years. The Resettlement Action Plandoes not cover these components. As a result, a Resettlement Policy Framework has been drafted to cover these components and treat any unexpected resettlement issues. The bus priority component does not entail any resettlement. The first phase of bus depot will use municipal land that was acquired by the municipality in 2002. 5. Environment The project is classified as Category A under OP 4.01 Environmental Assessment, because o f the disruption that will be caused by the constrmtion o f new roads in an urban setting. The Guangzhou Environmental Science Institute, a State Environmental Protection Administration (SEPA) Class A accredited agency for Environmental Impact Assessments (EIAs) in China, has prepared the Environmental Impact Assessment and Environmental Management Planthrough the required two-step consultation (details in Annex 10). These documents were disclosed locally and in Washington, D.C., in January 2005. The final Environmental Management Planwas formally adopted by the project owners on April 8, 2005. The final Environmental Impact Assessment reports were disclosed locally and in the Bank's Infoshop (with the authorization o f the Fuzhou Municipal Government) in April 2005 (Infoshop April 26, 2005). This project facilitates an increase in the effective urban area o f Fuzhou. Both the investment components o f the project (by supporting the development o f public transport, pedestrian, and bicycle ways) and the TA component (by supporting the development o f transit-oriented compact development), encourage environmentally desirable growth patterns that support and encourage alternatives to private motor vehicles. The TA component includes a subcomponent that supports Fuzhou in developing a strategic, rather than the current transactionoriented approach to environmental assessment. Inaddition, all the project components have been - 14- designed to minimize any adverse impact on the physical environment. None o f the components encroach on any environmentally sensitive terrain (Annex 10 includes a discussion o f the alternatives considered). That said, as with the construction and operations o f any urban transport infrastructure, negative environmental impacts are associated with constructiorrrelated disruption (such as temporary land occupation, generation o f dust, soil erosion, waste disposal, disruption o f local traffic, sanitation o f construction camps), noise (construction machinery and traffic), possibility o f increased air pollution, and treatment of wastewater (primarily from the bus depot). However, a comprehensive Environmental Impact Assessment has been conducted and an appropriate Environmental Management Planhas been developed (details in Annex 10). It i s concluded that the project will not have significant environmental impacts, and whatever adverse environmental impacts there may be, can be avoided, reduced, or minimized, provided the mitigation measures developed in the Environmental Management Plancan be properly implemented. 6. Safeguard Policies Table 3 provides details o f the safeguard policies triggered by the project. Table 3: Safeguard Policies Triggered by the Project Safeguard policies triggered by the project Yes No Environmental Assessment (OP/BP/GP 4.01) [XI 11 Natural Habitats (OPBP 4.04) [I [XI Pest Management (OP 4.09) [I [XI Cultural Property (OPN 11.03, being revised as OP 4.11) [XI [I Involuntary Resettlement (OP/BP 4.12) [XI 11 Indigenous Peoples (OD 4.20, being revised as OP 4.10) 11 [XI Forests (OPBP 4.36) [I [XI Safety o f Dams (OP/BP 4.37) [I [XI Projects in Disputed Areas (OP/BP/GP 7.60) * [I [XI * Projects on International Waterways (OP/BP/GP 7.50) [I [XI By supporting the proposed project, the Bank does not intend to prejudice the final determination o f the parties' claims on the disputed areas. OP 4.01 and 4.12 apply to the project and are complied with as discussed in sections D 5 and 6 above. One o f the project components (covered by the ResettlementAction Plan), NJBL, will encroach on the property o f a locally significant cultural relic; the FanchuanpuCathedral. Extensive consultations have been conducted with the cathedral and relevant government agencies, and various alternatives have been considered to minimize the land occupation. The chosen alignment and associated mitigation measures reflect a consensus among the various stakeholders. Though the cathedral building itself will not be affected, an adjacent office building on the cathedral property will need to be relocated. Fuzhoucommissioned the Fuzhou Ancient Architecture Institute to develop the relocation and rehabilitation planfor this office building, which was accepted by the cathedral. A key concern discmsed inthe Environmental Impact Assessment i s the potential impact o f vibration during construction on the cathedral - 1 5 - building, which is over 70 years old. A strengthening plan has been developed based on a thorough assessment o f the structure and foundation o f the cathedral. Official approval for the relocation and strengthening plan from the Provincial Cultural Relics Bureauwill be required, and implementation of the strengthening will be completed, before any construction activity commences in this section. Since this is the first Bank-financed project in Fuzhou, the city has limited experience with the Bank's safeguards policies. However, the city i s committed to environmental protection and has demonstrated its capacity in implementing national environmental policies. The project will provide TA with regard to institutional capacitybuildingand training, which will strengthen the city's capability to manage and implement the Bank's project. In addition, close supervision will be planned to ensure smooth implementation and full compliance with applicable safeguards policies. 7. Policy Exceptions and Readiness The project complies fully with Bank policies. The project meets regional criteria for implementation. - 16- Annex 1:Country and Sector or ProgramBackground CHINA:FuzhouNantaiIslandPeri-UrbanDevelopmentProject Urban Transport in China Issuesand Trends Duringthe last 10years, major cities inChina have experienced changes inthe nature and magnitude o f urban transport problems. Car ownership has been increasing rapidly, with 24 million motor vehicles were registered in 2004 (about 20 percent are estimated to be privately owned cars). Car sales, which have increased at more than 30 percent annually in recent years, are forecast to continue to see annual double-digit growth for the foreseeable future. Most cars are owned and used in urban areas, especially the more affluent major cities in the coastal areas. There are almost 2 million motor vehicles in Beijing, o f which 1.5 million are cars. Traffic congestion, pollution, and the highrisk o f traffic accidents have become part o f the daily life for urban population, and are fast reducing the quality o f urban life and the efficiency o f urban economy. The mjority o f the urban households are car-less; they are the losers o f the past policy and practice that focused on auto transport. They are experiencing more o f the following problems: Cities make ways for car driving at the expense o f bicycles and pedestrians. Many cities have dismantled bicycle rights-of-way, pedestrian sidewalks, and even strips o f land for roadside trees to make space for cars. The increasing dominance o f auto traffic on roads marginalizes non-motorized transport and pedestrians and reduces their travel safety. The mobility requirements o f the car-less population have been ignored for the past 10 years. Much o f the urban transport investment has been spent on multilevel interchanges and expressways built mostly in advance of demand. As the current central leadership places a new emphasis on people-centered development, municipal governments will face increasing political and financial pressure for the improvement o f mobility for all, especially for the low-income groups. The mobility benefit enjoyed by the car-owning population i s short-lived, and many motorists find themselves sitting in gridlock. Various benefits o f greater mobility are certainly enjoyed by the car-owning population (when the roads are not congested), but the benefits are fast eroding because o fincreasing gridlock and other problems associated with autos. Despite declining benefits, however, auto-dependent lifestyle and culture are taking shape in a few major cities, and could be developed to a point soon that it i s politically difficult and costly to reverse. In addition, demand for more road infrastructure capacity for cars i s putting significant political and financial pressure on the municipal governments. Public transport is fragile, since efficiency gains achieved in recent years are seriously threatened by increasing road congestion and gradual modal shift to passenger cars. Thanks to a combination o f factors, including bus enterprise reform, increased investment in capacity, implementation o f bus priority schemes, and urban population growth, many cities have - 17- witnessed gains inbus transport operating efficiency and ridership, especially during the second half o f 1990s. These gains, however, are beingreducedby growing road congestion and a gradual modal shift to private cars. Most cities will have to rely on bus transport for the foreseeable future. Although many cities aspire to a metro system, only a few have the financial capability in the short to medium terms to build such a system as the central piece o f the efficient urban transport system. International experience demonstrates that efficient and effective bus service i s a prerequisite for the effectiveness of rail-based or any fixed right-of-way systems. Even inthe mega cities, experience over the last 10 years shows that implementation o f a metro systemtakes a long time and incurs large public debt. Alternatives to a metro system, such as bus rapid transit, are needed inthe short to mediumterm inmega cities. Inpursuito f GDP growth and the associatedland development, local governments tend to deviate from the urban master plan from time to time, a tradeoff tkt often exchanges the future environment and livability for short-term economic and political gains. Inthe pursuit o f annual GDP maximization, the behavior o f mayors i s typically focused on immediate objectives. When their decisions that are oriented toward short-term goals contradict long-term development objectives set by the urban master plan, mayors tend to find ways to deviate from the plan. Many local governments engage excessively in land acquisition and land concessions, which distorts the planned land use and transport structure, and causes excessive conversion o f agricultural land and underutilization o f urban land. Inaddition, most cities fail to guide transit-oriented land use development. Bus operations and future guided systems are given little consideration in road design. The peri-urban poor are not served adequately with public transport services. Not only do local governments fail to build out o f congestion, but they also incur enormous financial liabilities from massive transport infrastructure investment. Despite enormous input to road construction, no cities have built out o f congestion. Massive investment in urban expressways, ring roads, and metro systems results in traffic improvement only for a few years before traffic growth againbecomes overwhelming. Money i s being spent too much in advance of demand on elaborate interchanges and bridges where simpler solutions could be adequate, but i s not being spent on road maintename, traffic management, or public transport. The primary funding sources come from the lease o f land-use rights, which are being exhausted, and from quasi. fiscal instruments, which incur enormous contingent liabilities in the forms o f local government guarantees and borrowing by government-owned urban infrastructure investment companies. The lesson (earned from international experience that there is no quick fix (that is, one mega- project to solve all problems) that applies to China. Yet, during the last 10 years, some cities have completed their first mega-projects and continue to the second and third mega-projects, largely without a sustainable financial mechanism in place. The perceived crisis o f long-term energy security, once remote, i s becoming a real concern, China has become the world's second largest oil consumer and has changed from an exporter o f crude oil to an importer. Although petroleum consumption by motor vehicles is still a small share of the total consumption, it i s growing fast. Hence, the future o f national energy security has become a serious issue at a time when world oil prices have surpassed US$50 a barrel. The contribution o f motorizationto the greenhouse gas effect i s an international concern, because increasing motorized travel in China will certainly contribute more greenhouse gas - 18- emissions, Although the aggregate contribution o fChina's motorization to greenhouse gas emissions i s a subject for debate, it i s nonetheless an international concern. The rapidly changing urban context has significantly shaped the current urban transport problems ina number o f the following ways: 0 Urbanization faster than expected: The rapid growth o f urban manufacturing and service sectors continues to attract the influx o f rural surplus labor (floating population). Recognizing the role o f urbanization in national economic growth, the Chinese government has quietly relaxed various policies designed to limit ruraLto-urban migration. However, the urban planning process largely fails to give adequate considerationto the service needs and affordability o f the floating population, many o f whom are the poorest residents. 0 Increasingly diversified urban population: The rapid growth o f a middle-income class, the aging o f the urban population, and the influx o f low-income young laborers in major cities pose an increasingly diversified range o f demand for urban transport services in relation to quality, destination, and affordability. 0 Motorization faster than expected: Urban motorization was anticipated to grow rapidly. It turns out that motorization has grown faster than expected because o f the fast reduction o f car prices, availability o f car loans, and the heavy highway investment that was made possible by the proactive fiscal policy in recent years. The demand for car ownership and use continues to concentrate in the major urban areas. 0 Structural changes in urban land-use patterns:Duringthe last 20 years several trends have been associated with the breakdown o f the joint work-residential location arrangements under the centrally planned economy: declining gross residential population density at the city centers, increasing job density in city centers, and the general decline o f overall population density across urban areas. Other new trends are now emerging, for example, residential locations by income sorting, large-scale residential development at suburban areas for middle- to high-income groups, large informal residential settlements for the floating population in the urbarrrural fringe areas, and perhaps most importantly, the emergence o f cross-jurisdictional metropolitan areas and even urban conglomerations. 0 Fiscal decentralization and weakening of central control: Reform in the tax administration structure in 1994 clarified that municipal governments are the functional and fiscal domain o f urban infrastructure, including urban transport. The role o f central government has since been limited to the approval o f urban master plans and mega- project investment (including mass rapid transit) proposals, and the development o f high- levelpublic transport policy. However, the decentralization process i s not complete, and the development o f sustainable municipal tax revenue base will take longer. A sustainable municipal finance framework is needed, but has yet to be developed. Enormous effort has been made for urban transport development, with some notable achievements. A few major cities, such as Guangzhou and Shanghai, adopted urban transport strategic planning process and integrated it into the mainstream urban master planning process. A significant amount of capital investment has been made, mostly through innovative financing, to improve the capacity for the urban transport infrastructure. A k w cities, such as Shenzhen, have developed an innovative urban transport policy coordination model. Public bus transport enterprise reform continues, and various market structure models have emerged. Some cities, for - 19- example, Shenzheq have developed a viable bus transport industry.Others have started to develop, with initial success, a bus rapid transit system, but industry reform i s still in its infancy. Traffic management has received greater emphasis, and modern traffic management techniques are increasingly adopted. In addition, all major cities have developed motor vehicle inspection and maintenance programs. Urban transport problems, however, are not being addressed on a strategically sound and financially sustainable basis. The ad hoc, piecemeal approach results from the fundamental weaknesses in the planning, policy coordination, and financing mechanism. The approach adopted to deal with motorization varies city by city. Shanghai appears to have adopted, with some degree o f success, a more comprehensive approach emphasizing the control o f car ownership and use. Beijing appears to have adopted a "build out o f congestion" approach, but the situation there seems to be getting worse. With private car ownership reaching 1.3 million, Beijing i s suffering from road congestion that has been increasing surprisingly fast (although it has not been unanticipated). It was recognized inthe mid-1990s that urbantransport should be treated primarily as a local issue, and that national government should limit its role to providing policy guidance and promoting knowledge exchange and capacity building. However, with national budget no longer available for urban transport, the national government has generally stayed away from urban transport matters. Hence, it does not have the financial leverage to play the above limited role. An exception is that the National Development and Reform Commission has tightly controlled the size of mega-projects, such as investment inmetro systems. Municipalities are left on their own. Most cities have neither the mandate nor technical capacity for urban transport strategic planning, even though urban transport problems are growing in complexity and are long-term innature, and even though urban transport strategic planning tools are readily available. No sustainable financing mechanism exists for urban transport, which seriously weakens the linkage between planning and financing. The floating population has grown to 20-40 percent o f the total population in the largest cities, especially those in the coastal areas. Their transport needs have been totally neglected. This i s partly a result o f the piecemeal approach adopted by many municipal governments in urban transport interventions. As demonstrated by the dominance o f short-term behavior on the part o f the municipal governments, the central issue i s the lack o f an effective policy coordination mechanism to ensure the consistency o f short-term actions and long-term development objectives. The search for solutions to a host o f complex, interrelated urban transport problems should start with the resolution o f this central issue. The Way Out: A Policy and Strategic Framework A new way of thinkingis needed, because the urban transport problems and their spillover effects are much more complicated now than before. Urban transport i s not only a local issue, but also a national issue. With increasing recognition o f the energy and environmental problems (including loss o f agricultural land) associated with rapid urban motorization, the central government has a role to play in urban transport. Apart from the ongoing analytical review, the Bank i s working with the Government o f China to develop a program cofinanced by the Global Environmental Facility, which would support a range of urban transport investment and policy initiatives, including the possible development o f a National Urban Transport Development Strategy. - 20 - Urban transport policy i s not only for the motorized population, but for everyone, particularly for those with no access to private motorized vehicles. With increasingpolicy emphasis on poverty reduction by the central government, the transport needs o f the poor should be addressed explicitly in urban transport development strategy. This project i s designed to support public transport and the development o f public pedestrian and bicycle facilities as integral elemnts o f the roads financed in the project. How to develop a viable public transport industryis an urgent issue. Industrial organization o f public transport provision varies city by city, ranging from the continuation o f traditional publicly owned and operated monopoly to full-fledged privatization, with highly mixed results. Most reform actions were implemented at the enterprise level. There i s a need to provide guidance to public transport industry reform. Although Fuzhou i s relatively advanced on this front in that most service i s contracted out to private operators, the TA component o f the project will address this issue as part o f the public transport masterplan development. Urban transport i s not only a city issue, but also a multijurisdictional metropolitan issue. This has happened faster than expected, mainly in the Pearl River Delta and the Yangzi River Delta Regions. Guided by the national government, the first experiment o f metropolitan master planning is under way in the Pearl River Delta. International experience gained from the provision and management o f metropolitan service can be highly relevant to the current search for a solution in China. Urban transport i s a technical issue, but more an institutional capacity issue. Most cities do not ha% adequate institutional and professional capacity for urban transport strategic planning. Most urban transport problems facing these cities are traceable to the lack o f carefully and professionally formulated urban transport strategies. The Bank has provided significant value- added to client cities mainly through the preparation o f lending operations, but the impact has so far been limited to the project cities. Most other cities do not benefit from the Bank assistance, and the central government has failed to develop a mechanism for professional capacity building at the local level. This i s also an issue that largely limits the coverage o f Bank lending operations to about one city per year. Professional capacity building for strategic planning will be a win-win for both the government and the Bank. Development o f such capacity i s a central focus o f this project. FuzhouNantaiIsland Development Plan The central city o f Fuzhou, which i s dense and full o f historic and traditional buildings, i s surrounded by muntains inthe west, north, and east o f the city. The master plan for Fuzhou (1995-2010) approved by the State Council in M a y 1999 envisioned an ambitious urban development strategy, namely dong kuo xi j i n or eastward strengthening and southward expansion The centerpiece o f this strategy i s the development o f Nantai Island, located to the south o f the city center while crossing MinRiver. Focusing on Nantai Island i s also a geographical necessity for the city o f Fuzhou if it to expand; the city i s surrounded by mountains on three sides, and Nantai Island on the South i s the only direction available for urban expansion A master plan for Nantai Island (2005-2020) was therefore developedby Fuzhou Urban Planning Institute and Fuzhou Urban Planning Bureau in 2003. Urban Growth Fuzhou's economy, which had suffered because o f Taiwarrrelated tensions in the past, has been growing at an annual rate o f about 13 percent in the last decade. The urban population is - 21 - expected to grow from 1.4 million in 2000 to more than 2.0 million by 2010. More than half the population growth will be realized inNantai Island (as shown inTable Al,1). Table A1.1: Trends in Population, Fuzhou Urban Area and Nantai Island 2000 2002 2010 2020 Population in 1,400,000 1,580,000 2,000,000 2,400,000 Fuzhou Population in 344,000 (1999) 480,000 690,000 800,000 Nantai Nantai Island i s currently being transformed from rural to urban, which has resulted ina GDP grow rate of more than 16 percent inthe past five years. Among five subdistricts inNantai Island, Cangshan and Jinshan are considered peri-urban Cangshan is close to the central city, and Jinshan has accommodated the biggest industrial park of the city. Gaishan has some small urban areas with highpopulation density along the MinRiver, and Jianxin and Chengmen are still largely rural. Five industrial parks have been established in the island since the mid-1990s to attract light industries,such as mobile phone, computer, automotive accessories, shoes, clothing, and toys. A number ofnew residential areas were also developed-mostly inthe north andthe west of the Island-to provide housing for employees of the industrial parks and residents relocated from the central city. In 2003, the total industrial production in Nantai Islandreached Y 14.56 billion in 2003. It increased 19.8 percent from 2002, the actual foreign direct investment reached US$50.05 million (an annual increase o f 8.3 percent), and the total local revenues were Y 199 million(an annual increase of 11.8 percent). PlannedDistributionof Populationand Land Uses The master planprojects that the built-up areas inthe island will increase from 43 square kilometers in2005 to 94 square kilometers in 2020. The master plan also proposes the geographic distribution of population and land uses given in Table Al.2 by 2020. - 22 - Table A1.2: 1 mtai Island Land Jse Populationdensity Population (thousandsof (thousands of Built-up areas personsper District' persons) (sq km) hectare) Main land uses 2002 2020 2002 2020 2005 2020 Jinshan 84.10 166.60 7.00 18.21 120 92 Residential area, education, and industrypark Cangshan 242.10 221.70 15.95 16.95 152 131 Downtown, education, and residential Gaishan 78.50 142.40 7.00 24.45 112 59 Industrial park, airport, and dock Jianxin 33.60 167.60 3.50 18.92 96 89 Education and residential Chengmen 41.70 101.70 9.55 15.47 44 66 Industrial park, tourism and entertainment zone, and residential Total 480 800 43 94 110 85 Infrastructure The master plan also proposes a comprehensive infrastructure system for Nantai Island, including roads, power, water supply, sewerage, landscaping, and flood control facilities. The investments Fuzhou proposed for Bank financing, (that is, construction o f the eastern section o f Nanjiangbin Road, the eastern section of the third ring road (3RR) and the associated Kuiqi Bridge connecting the 3RR to the port and the central city, and a bus depot) are priority projects proposed in the master plan. The eastern section o f Nan Jiang Bin Lu (NJBL) will connect urbanized Cangshan and Gaishan, which i s still mainly rural. The 3RR and KuiqiBridge, connecting Jinshan Industrial Parks and the port and the central city, will cross the rural subdistricts o fJianxin and Chengmen. Implementationof the Master Plan The city has started to implement some o f the infrastructure proposed by the master planby utilizing funds from either value-capture from the development o f peri-urban land or from financial institutions. For example, the Asian Development Bank i s presently supporting development of water supply systems on the island. The China Development Bank has provided funds for the local road network. The city itself has financed the bulk o f the short-term investment program for important transport infrastructure, including the southern section o f the second ring road, west section of the 3RR, and the west section o f NJBL. Based on the master plan for Nantai Island and existing land development projects, a detailed land use plan was drafted in 2004 by Fuzhou Urban Planning Institute for the northern waterfront areas o f the island along NJBL. Meanwhile, several land plots o n the island were sold out in - 23 - 2004 at prices of Y 1-1.5 million per mu.A number o f new land and housing development projects have been approved. Assessmentof FuzhouMaster Plan The Bank concurs that Nantai Island is a strategic location and perhaps the only available place outside central Fuzhouthat i s able to accommodate most o f the expected rapid growth o f the city inthe coming 10-20 years. The island has witnessed many developments during the past 10 years, such as 5 industrial parks, 6 newly constructed bridgesacross MinRiver, and a greater number o f housing units. The master planprovides a long-term and comprehensive vision for Nantai Island. However, to successfully achieve this vision, the systems, institutions, and processes to implement such a plan successfully need strengthening. First, there are no clear institutional arrangements for coordination o f implementation o f the master plan. The planning bureau that i s in charge o f the master plan lacks the authority and resources to implement the plan consistently and thoroughly because the implementation i s carried out by other parties, which include not only the public agencies, such as the land bureau or construction bureaus, but increasingly also the private investors, who often have different agendas and priorities. Second, the current planning system does not have effective mechanisms and tools to address the gaps between the master plan, which focuses on visions o f long-term development, and detailed construction plans proposed for individual investments, which are driven by investors and implementing agencies for short-term objectives. One example o f this i s the initial detailed plan proposed for the waterfront areas along NJBL, on which there was only the primary road grids with no service road intersections, no clear vehicular access strategy, and no urban design requirements for public space or pedestrian access. Third, the rigid preparatio n and approval process for the master plan also makes it difficult to adapt to market change. It normally takes two or more years to develop or modify a master plan and then other two or more years to get approval from different levels o f government, while the land market currently i s changing rapidly because o frapid urbanization and economic growth. Finally, the current planning process i s still a closed-door exercise controlled by a small number of planning experts and government officials. This often tends to simplify or exclude social and environmental concerns o f the public ingeneral and therefore lacks broad support to or even creates troubles for its implementation. The Bank has provided guidance to Fuzhou to optimize the design o f these two roads so as to ensure that these investments are made in ways that support public transport and noltmotorized transport use, as well as proposed land use along the road, and thus assist the low-income population and support local economic growth. Inaddition, a TA program that addresses urbanplanning and management issues inFuzhou has been developed, and outline terms o f reference have been drafted. The TA is expected to help establisha market-oriented participative urban planning process, which will be more responsive to changing needs and evolving market conditions. Second, the TA will support for an integrated environment, urban transport, and land-use management process that fosters development o f a sustainable city that i s able to function and grow amid increasing incomes and motorization. Third, the TA will introduce some state-of-the-art urban planning concepts, methods, and tools to Fuzhou to strengthen its planning capacity. Finally, the TA is expected to provide technical - 24 - inputsto the new Urban Master Plan for Fuzhou and the 1lth Five-Year Plan, which is currently under development and for which the city has requested the Bank's assistance. - 25 - Annex 2: Major RelatedProjectsFinancedby the World Bank and/orOther Agencies CHINA:FuzhouNantaiIsland Peri-UrbanDevelopmentProject Latest supervision (PSR) Sector issue Ongoing projects ratings Develop- Implementa- ment tion progress objective Bank-financed (IP) (DO) Addressing urban transport needs inShanghai Metropolitan S S a comprehensive manner: Transport Project I Selective road investments to (completed) enhance capacity and relieve Shanghai Metropolitan s . S bottlenecks. Transport Project I1 Public transport investments (completed) and support to policy, Guangzhou City Center S S operations, and planning. Transport Project Traffic management safety. (ongoing) Development o f a motor Liaoning Urban Transport S S vehicle emission control Project (ongoing) strategy. UrumqiUrban Transport S S Road maintenance. Project (ongoing) Training and capacity Shijiazhuang Urban S S building. Transport Project (ongoing) Wuhan Urban Transport S S Project (ongoing) Other development agencies ADB (US$64 M loan): To improve Fuzhou Urban Project the urbanenvironment through (under preparation) constructionand rehabilitation o f sewer networks, rehabilitation o f the inland river system, and strengthening o f governance in water resource management. PSR, Project Supervision Report. S, Satisfactory. - 26 - Annex 3: ResultsFrameworkand Monitoring CHINA:FuzhouNantaiIslandPeri-UrbanDevelopmentProject ResultsFramework Project development objective Outcome indicators Use of outcomeinformation To support FuzhouCity's Transport Investments: Supportingdecisionmakers in the development as it expands to include 1. Traveltimes (for autos andpublic urban developmentof NantaiIsland NantaiIslandby financing transport) from key points in Nantai on an ongoingbasis. (a) Investments intransport to to centralFuzhou. improve access to Nantai Island InstitutionalDevelopment: (roadandpublic transport) and 2. Adoption o f recommendations (b) TA that would improvethe from Strategic Planning TA. manner in which the development is 3. Incorporationo f mechanism to planned (transport andpublic coordinate landuse and transport transport masterplan, integrationo f planningin masterplanupdate. transportand landuse planning),and 4. Increasein level o fpublic the manner in which the transport coverage. development is implemented 5. Adoption o f a GIS-basedsystem (improving urban design, to monitor landvalues. preservationof sensitiveand historic neighborhoods, and increasingthe city's capacity to phase and stage development in a market environment). Intermediateresults, Resultsindicatorsfor each one per component component Use of resultsmonitoring Component One Component One Component One Road infrastructure component: Progressrate o fworks Monitoring of implementation Completionof physicalworks and progress and actionplanto address ................................... the beginni ....................................................... Component Two Component Two Component Two Publt'c transport component Buspriority:completion of works Progressrateof works. Monitoring of implementation and commencemento f operations. progress and actionplanto address Jinshandepot: completionof works Progress rateof works. possibledelays. and commencemento f operations. Equipment:successfulprocurement, Procurementprogress. installation,andcommencementof ........................................... operations. ............................................................................................................................................................................................................. Component Three Component Three Component Three TA: Completionof TA. Study conducted. Monitoring of implementation Computerization. Management systemprocured,data progress and actionplanto address Training. collected, and staff trained. possibledelays. Numberof staff trained, skills Ez 4 2 P s, 4"8 c3 7 j < I I , I i - 3 0 - Annex 4: Detailed Project Description CHINA: Fuzhou NantaiIslandPeri-UrbanDevelopmentProject Strategic RoadInfrastructureComponent (US$248.64 million) The projectwill support the development of three transport infrastructure subcomponents, along with a construction supervisionsubcomponent, which together constitutethe bulk of the short-termprogram for major transport infrastructure on Nantai Island: 0 R1.Nan Jiang BinLu (NJBL) (NW1.1-1.3, NW2, NW3) 0 R2.PhaseI1of the 3RR (South) (TW1.1-1.5, TW2.1-2.2) 0 R3. Kuiqi Bridge (KW1) 0 R4. ConstructionSupervision(TC1, TC2, KC1) R1. NanJiang Bin Lu(NWl.1-1.3, NW2, NW3) The NJBLproject comprises the constructionof a 4.1 kilometer lengthof riversideroad along the south bank of the MinRiver between the fourthMinRiver Bridge and the line of the proposedQian HengBridge, coupledwith a 1.1 kilometer lengtho f the southern approach roadto the Qian HengBridge. An earlier easterly extension(5 kilometers) of NJBL along the riverbankto the KuiqiBridge has been abandoned. The function of the roadis to provideaccess to, and enable the redevelopmentof, significant areas o f derelict land adjacent to the river, as well as forming an important element of the roadnetwork of Nantai Island.The Qian HengBridge Approachprovides a link betweenthe eastern end of NJBL and the remainder of the Nantai roadnetwork at Lingpu Lu. The project i s divided into three sections: 0 NJBL betweenthe 4thMinRiver Bridge and Jiefang Bridge (km 0 -km 1 114) + 0 NJBLbetweenJiefangBridgeand the location of the proposedQianHengBridge (km 1+ 114-km4+091) 0 Qian HengNanLubetweenNJBL and LingpuLu(km0 - km 1 + 121) The first section involves the upgradingand limited widening of the existingroad within a 40 meterright of way with minimal resettlementor disruption. The second section, which is beingundertakenas advance works, involves new construction and extensive resettlement o f mostly derelict industrial properties.The projectwill incorporate the existing flood defensive wall over most of its length. The third sectio-which also involves substantialresettlementof existingresidentialand small-scaleindustrial properties-is requiredto connect NJBL with the local road network. R2. PhaseI1of the Third RingRoad (South) (TWl.1-1.5, TW2.1-2.2) Phase I1o f the third ringroad (south) (3RR) connects the northernend of the Wanbian Bridge with the southern approaches to the KuiqiBridge. The road i s proposed as a six- lane (dual three-lane) expressway, with grade-separatedjunctions and full control of access. Separate frontage roads with segregated non-motorizedtransport lanes and - 31 - pedestrian footways will be provided. The total length o f the project i s 11.6 kilometers and it will be constructed in two stages: Wanbian Bridge to Fuxia Highway (km 0 + 726 -km8 + 736) and Fuxia Highway to KuiqiBridge Approach (km 8 + 440 - km 11 + 600)`. The first stage will be constructed within a 79-meter right o f way, including six expressway lanes, four frontage road lanes and segregated facilities for non-motorized transport and pedestrians. The initial 850 m of the second stage will comprise a six-lane elevated expressway built over the at-grade frontage roads and within a 50 meter right o f way: the remainder will have a 79 mter right o f way. Construction o f the second stage (Fuxia Highway to KuiqiBridge)will be deferred to coincide with the construction o f the KuiqiBridge, since the traffic demand for this section is heavily dependent upon the bridge's being operational. The elevated section o f 3RR crossing the Fuxia Highway will be constructed in the second stage. The function o f the proposed section o f the 3RR is twofold: first as an important element inthe overall city transport network, providing mobility betweenthe various outer districts in the city and inparticular connecting Nantai Island to the remainder o f the urban area; and second as a major development spine passingthrough the south side o f Nantai Island with the objective o f improving accessibility and stimulating development on adjacent land. R3.KuiqiBridge(KW1) The KuiqiBridge is a key element o f the 3RR, linking the south section o f the ring road (on Nantai Island) with the main urban area, the port area o f Mauwei and the proposed Airport Expressway on the north bank o f the MinRiver. The chosen solution is for a double-pylon, double-plane, cable-stayed bridge with a main span of 240 meters and two side spans o f 105 meters, coupled with a 10-span, 500 meter approach viaduct on the south and a 3-span, 150 meter approach viaduct on the north. On the north bank, the KuiqiBridge will connect initially with the existing Jiang Bin Lu and, in the future, with the proposed Airport Expressway (Phase 11) and the northern section o f the 3RR (not a part o f the project). Designs for these roads are presently under preparation, and construction i s expected within a similar timeframe as the KuiqiBridge. Designs for the northern interchange connecting the KuiqiBridge to the local road network north o f the river will be finalized in conjunction with the detailed design o f the bridge. R4. Construction Supervision (TC1, TC2, KC1) Construction supervision for all works other thanNJBL will be financed by the project. These three important transport infrastructure subcomponents will support a sustainable urban and economic development o f Nantai Island, the centerpiece o f Fuzhou's expansion strategy. ' The initial726 meters o f the 3RR is within the Wanbian Bridge NorthernApproach Interchangeand i s being constructedunder the bridge-interchangecontract; the elevatedsectiono f 3RR crossingFuxia Highway will be constructedin Stage 2-hence the respective starts of works at km 0 + 726 and km 8+ 440 (involving a 300 meter "overlap" inthe junction). - 32 - Public Transport Component (US$20.50 million) The main subcomponents of the public transport component are the provision o f bus priority on a major trunk route in Fuzhou, a depot, an interchange and dispatch center, and equipment to facilitate more efficient planning and operations. PT1.Jinshan Depot,Interchange,and Dispatch Center (JW1, JW2, JGl.1-1.3, JG2.1) The depot, interchange, and dispatch,center are all located at the Jinshan site, which is situated between Pushang Road, Hongwan Road, the planned Hongjiang Road, and Jianxin Transformer Substation in the northern part o f Nantai Island. The total site area i s 122,880 square meters or 183.6 mu. It i s proposed that the site be developed in two stages. Inthe first stage an area o f 3.56 hectares would be developed as Jinshan Depot Phase I. The depot i s necessary for efficient operations in Nantai and provides an operational center for all routes in the area. The second stage development contains three items: Jinshan Depot Phase 11, Jinshan Interchange, and a Dispatch Center. All these items are provisionally agreed, but are subject to final approval following the outcome o f the public transport planning study. Phase I Current plans for Jinshan Depot Phase Ishow that it can provide 196 parking bays, 36 maintenance bays, 10 refueling lines, and some office and workshop space (see Table A4.1). This accommodation, together with that provided at the existing Hongshan Bridge Depot, should be sufficient to meet demand for the immediate future. TableA4.1: Jinshan Phase I Major facilities Maintenance bays and pits 36 Parking spaces 196 Refueling 5 lines, 2 pumps per line Buswashing machines 5 lines, 1 machine per line Busstops and interchanges 2 lines, 3 bays per line Office space 480 sq m Maintenance and workshop 2,460 sq m Phase II Phase I1would include three subcomponents: additional parking space, a passenger interchange facility, and a dispatch center office building. The Phase Irefueling facilities are anticipated to be adequate for the long term. The interchange as currently designed can accommodate 10 individual route stands and holding space for about 15 waiting buses. A large central island for passenger movement inthe designprevents interchanging passengers from having to cross any bus movement paths. The interchange i s required if the proposed trunk and feeder network concept i s introduced for connections between Nantai-College Town and the city center. PT2. Equipment Three items are proposed, all o f which are related to increased use o f modern technology inbus operations: - 33 - A GlobalPositioningSystem (GPS)-based vehicle locationsystem This will be used to improve dispatching from termini and achievement o f regular midroute headways. It i s also planned to use this to provide real time bus arrival information at bus stops. Geographic InformationSystem(GIs)-based database:This system will be used to provide a geographic database for public transport infrastructure and operational performance statistics. ComputerizedManagementInformationSystem(MIS): This system is intended to greatly increase the use o f computers in the management o f the bus services. Under this system a number o f applications will be developed to computerize activities that are currently being done manually or not at all. It will also provide for better communications between the group company and the operating companies. PT3.Bus Priority Corridor Two alternatives are still under consideration for a first phase demonstration: The north-south Wuyi-Wusi road corridor between the Provincial Sports Center and Jiangbin Road. The east-west corridor Gongye Guoho Corridor from the second ringroad inthe west to Lianjiang Middle Road. PT4. ConstructionSupervision(JC1, JC2) Construction supervision for all works at Jinshan Depot will be financed by the project. PT5. TechnicalSpecificationsand OperationalIntegrationPlanfor GPS andM I S Equipment(JC3, JC4) This includes support for the development o f specifications and integrationplans for the proposed GPS and M I S to be undertaken for the Fuzhou Group Public Transport 'Company (technical manager). Outline terms o f reference for both pieces o f consulting services have been agreed upon and are available in the project file. There will also be a number o f pieces o f TA related to public transport. InstitutionalDevelopment andTechnicalAssistance Component (US$2.90 million) The TA component finalized with city agencies focuses on strengthening agencies involved in planning and implementing urban development plans. Outline terms o f reference for the consulting services have been agreed upon and are available in the project file. A summary follows. TA1. StrategicPlanningTA (Cl) The strategic planning undertaken for the Urban Planning Bureau (technical manager) with the active involvement o f the project leading group, the Planning Commission, the Land Bureau, the Environmental Protection Bureau, the Cultural Relic Bureay and other relevant agencies will support efforts to implement the urban plan effectively in a dynamic market-oriented environment. The scope o f work will include (a) identification of a broad array o f stakeholders, including business and citizen groups, and development of an understanding of their concerns and priorities for urban development in Fuzhou; (b) the development o f a GIs-based system for ongoing monitoring o f land use and land - 34 - values, the development o f analytical techniques to support the city planning department to assess the impact o f policy and regulation on short-term urban development; (c) the development o f a strategic framework for evaluating environmental impacts and opportunities in Fuzhou's future urban development (that would conform with Chinese domestic requirements on a Strategic Environmental Assessment), development o f policy recommendations on physical investment and policies consistent with an environmentally sustainable growth policy; (d) the development o f a short-term strategy for urban heritage management in Fuzhou; and (e) development o f urban design guidelines that promote a livable transit-orientedbuilt environment. TA2. Support for Public Transport (C2, C3) This includes two studies: TA2.1, Support for a Long-Term Public Transport Plan, and TA2.2, Development o f a Five-Year Forward Planning Program (C3). On TA2.1, Support for a Long-Term Public Transport Plan(C2), the UrbanPlanning Bureauis responsible for taking a longer view o f the manner in which transport influences urban development in the city has been identified as the lead technical manager for this work. The scope o f work will include support for the dexlopment o f a transport model that will facilitate integrated land-use- transport modeling, the examination o f a series o f long-term options for key public transport corridors, highlightingeconomically viable technology options, recommendations on preferred options, and the development o f land-use scenarios and recommendations that would support and strengthen the viability o f preferred options. The work will also include training to support city staff to be familiar with the models and their use. On TA2.2, Development o f a Five-Year ForwardPlanning Program (C3), the development o f a five-year forward planning program, undertaken for the Public Transport Division o f the Construction Bureau (technical manager) as the agency responsible for ensuring that bus services, is meeting the needs o f the city to plan for new and modified routes, decidingbus purchases, and identifying depot and terminus requirements. The objective o f this TA i s to contribute toward achieving these targets by supporting the preparation o f rolling five-year plans for the development o f bus services. These plans will complement the longer public transport development plan being prepared as TA 2.1. The scope o f work includes the preparation ofnetwork development plans, including changes to existing routes and introduction o f new routes. It would also include analysis to strengthen the justification for additional depot, interchange, and dispatch facilities. This could either be done globally for the entire fleet or locally in the event that the distribution o f space did not match the operating pattern. TA3. Training Training for various city agencies, including study tours, twinning arrangements, and formal study programs. TA4. Equipment (Gl) This includes equipment for the FWPMO. - 35 - Annex 5: ProjectCosts CHINA: FuzhouNantai Island Peri-Urban DevelopmentProject Bank- Local financed Total Project cost by component andlor activity US$millionUS$millionUS$ million I.RoadComponent I.INanjiangbinRoad (Phasesl,II,andIII) -- Civilworks 3.58 5.36 8.94 Construction supervision 0.13 0 0.13 - Landacquisition and resettlement 19.79 0 19.79 - Other 2.26 0.015 2.275 I.IIThirdRingRoadSouth (PhasdI) - Civil works 38.15 57.54 95.69 - Construction supervision - 0 0.72 0.72 Land acquisition and resettlement 42.53 0 42.53 - Other 19.48 0.15 19.63 LIIIKuiqiBridge - Civil works 15.90 23.98 39.88 - Construction supervision 0 0.39 0.39 - Landacquisition and resettlement 10.39 0 10.39 - Other 7.98 0.065 8.045 11. Public Transport Component IIJJinshanDepot (PhasesIandIZ) - Civil works 2.42 3.64 6.06 - Equipment and installation 0 4.89 4.89 -- Technical Construction supervision 0 0.16 0.16 specifications for GPS and MIS 0 0.16 0.16 - Land acquisition and resettlement 6.13 0 6.13 - Other 1.85 0.02 1.87 II.IIZBus Priority Corridor 1.21 0 1.21 111. TA - Strategic planning 0 1.70 1.70 - Support to public transport 0 0.90 0.90 - Training and project implementation support 0 0.30 0.30 Total baseline cost 171.80 100.00 271.80 Physical contingencies 22.62 0 22.62 Price contingencies 30.04 0 30.04 Total project costs (1) 224.46 100.00 324.46 - 3 6 - Notes: 1.Major categories includedinthe "other" categoryare front-endfee (US$0.25 million), preparationof the preliminary and final designs, data collection,training, various administrativeexpenditures, and interest during construction.Exceptfor the front-endfee, all these costsare non-Bank-financed. 2. The Fuzhou Municipal Governmenthas usedquotapricesto estimate civil work cost estimates(since they are requiredto under Chineselaw). Basedon experiencein China, these unit pricesare higher than existing marketrates (usually about 15-20 percent), reflecting a significantprice contingency.Base costs were obtainedby adjustingthe quotapricesto bring them in line with current marketprices.The difference (US$30.04 million) reflects a price contingencyo f 11.09percent.This i s higher than a conventionally calculatedprice contingencyestimatedusingannual inflation rates of 3 percent (which was calculatedto be 6.21 percent). 3. Physicalcontingencies were calculatedby the FuzhouDesignInstitute at 8 percent o f all engineering costs (engineeringcosts include all costs except financialcosts, such as static investment, interestduring construction,and commitmentcharges). 4. In line with current practicebased on the experiencewith recent Bank-financedprojectsin China, where significant cost savings havebeenthe norm, the Bank i s not financing any contingencies. - 37 - Annex 6: Implementation Arrangements CHINA FuzhouNantaiIsland Peri-UrbanDevelopmentProject The project will be implementedby the Fuzhou Municipal Government. The FWPMO under the Fuzhou Development and Planning Commission, staffed by permanent city employees, has coordinated project preparation and will review disbursements, manage procurement, and monitor implementation progress. The Fuzhou Urban Construction Development Company, Fuzhou Group Public Transport Company, and FWPMO will respectively implement the road component, the public transport component, and the TA component. Both municipal companies will manage construction works with the assistance o f domestic supervision firms. The Road Maintenance Division o f the Construction Bureau will be responsible for the maintenance o f the road component, and the Fuzhou Group Public Transport Company will operate the Jinshan Depot after its construction. A leading group has been established to take the lead on technical issues and oversee project implementation. The leading group includes representatives from the Fuzhou Municipal Government, Fuzhou Development and Planning Commissio n, Fuzhou Urban Planning Bureau, Fuzhou Land Management Bureau, Fuzhou Environmental Bureau, Fuzhou Construction Bureau, Fuzhou Finance Bureau, and Fuzhou Cultural Heritage Bureau. The design studies for the road and public transport components have been carried out by the Fuzhou Planning and Design Research Institute. With respect to resettlement, the Fuzhou Municipal Government has established ajoint team for the preparation o f the Resettlement Action Plan, involving the local government and consultants. The plan has been developed in line with local laws, policies, and World Bank OP 4.12. The Resettlement Action Plandescribes in detail the resettlement implementation arrangements. The Fuzhou Municipal Government has established a multilevel organizational framework to plan and implement resettlement. This framework has resettlement offices at different levels o f governments, including project level, prefecture and city level, and district level. They have been staffed with experienced experts, and their responsibilities have been specified in the Resettlement Action Plan The project management office (FWPMO) has designed both internal and independent monitoring mechanisms for implementing the Resettlement Action Plan Internal monitoring will be conducted through the resettlement offices at various levels o f government, It will mainly focus on the physical progress o f the implementation o f the ResettlementAction Plan Independent monitoring o f NJBL project subcomponent will be carried out by Hohai University and, independent monitoring o f other project components will be carried out by qualified institutes. The independent monitoring will be conducted every six months. On environment, the FuzhouMunicipal Government has prepared an Environmental Management Planfor the road and public transport components that includes practical and cost-effective measures necessary to mitigate the project-related impacts by incorporating them in the design and by implementing them during the construction and - 38 - operation phases. The Environmental Management Planalso specifies the appropriate monitoring plans, training, institutional arrangements, implementation schedule, budget needs, and so forththat are necessary to implement the mitigation measures and strengthen the borrower's capacity. The Fuzhou Environmental Bureauwill be responsible for environmental management duringproject implementation. An independentagency will be hired to monitor compliance. The FWPMO will sign all contracts for the TA component, and deal with daily management o f the entire TA program, whereas specific operating agencies will take the lead on technical issues for each TA task as described in Table A6.1. Table A6.1: ImplementationArrangementsfor TA Studies Name Operating agency Other involvedagencies Strategic PlanningTA UrbanPlanning Bureau Land Bureau, Cultural Relic Bureau, Environmental Protection Bureau Long-Term Public Transport UrbanPlanning Bureau Public Transport Division o f Plan Construction Bureau Preparation of Initial Five-Year Public Transport Divisionof Urban PlanningBureau, FPTC Forward Planning Program Construction Bureau Technical Specifications for FPTC Public Transport Divisiono f Management Information Construction Bureau System Technical Specifications for FPTC Public Transport Division o f Global Positioning System Construction Bureau Training various The special accqunt will be managed by the Fujian Provincial Finance Bureay and financial statements will be consolidated by the FWPMO. All withdrawals from the special account will require the FWPMO's prior authorization. - 39 - Annex 7: FinancialManagementand Disbursement Arrangements CHINA: FuzhouNantai Island Peri-Urban DevelopmentProject Summary of the FinancialManagement Assessment An assessment of the adequacy o f the project financial management system of the Fuzhou Nantai Peri-Urban Development Project has concluded that the project meets minimumBank financial management requirements, as stipulated in BP/OP 10.02. The project will have in place an adequate project financial management system that can provide, with reasonable assurance, accurate and timely information on the status o f the project in the reporting format agreed with the project and as required by the Bank. Fundingsources for the project include the Bank loan and counterpart fknds. The Bank loan proceeds will flow from the Bank into the project special account to be set up at and managed by the Fujian Provincial Finance Bureauto the Fuzhou Finance Bureau, to the project implementing entities, and finally to contractors or suppliers. There are three implementing entities :the Fuzhou Urban Construction Development Company, Fuzhou Group Public Transport Company, and FWPMO. The FWPMO, established in the Fuzhou Development and Planning Commission, will provide overall management and coordination for the project. The FWPMO will assist the Fuzhou Finance Bureauto review reimbursement requests fromthe Fuzhou Urban Construction Development Company and Fuzhou Group Public Transport Company for eligible expenditures. The Bank loanwill be signed between the Bank and the People's Republic o f China through the MOF, and onlending arrangements for the Bank loan will be signed between the M O F and the Government o f Fujian Province through the Fujian Provincial Finance Bureau, then between the Fujian Provincial Finance Bureauand Fuzhou Finance Bureau, and finally between the Fuzhou Finance Bureauand two o f the implementing entities, the Fuzhou Urban Construction Development Company and Fuzhou Group Public Transport Company. The project will use traditional disbursement techniques and will not be using report-based disbursements in accordance with the agreement between the Bank and MOF. The counterpart hnds will be loans from local banks and government appropriations. Audit Arrangement The project financial statements will be audited in accordance with standards acceptable to the Bank. In line with other Bank-financed projects in China, the project will be audited in accordance with International Auditing Standards and the Government Auditing Standards o f the People's Republic o f China (1997 edition). The Fujian Provincial Audit Office has been identified as auditors for the project. Annual audit reports will be issued in the name o f Fujian Provincial Audit Office. The annual audit report o f project consolidated financial statements will be due to the Bank within six months after the end o f each calendar year, as stipulated inthe loan agreements. The responsible entity and timing i s summarized in Table A7.1. - 40 - TableA7.1: AuditedProjectFinancialStatements Comnonent Submissionentity Due date Consolidated project FWPMO June 30 financial statements Inaddition, annual audit reports on financial position and operatingresults o fthe Fuzhou Urban Construction Development Company and Fuzhou Group Public Transport Company, inboth Englishand Chinese, will be due to the Bank within six months after the end o f each calendar year. The financial statements for these entities are not fiduciary requirements, but rather will be used for sustainability purposes. FinancialManagementand ReportingArrangements Implementing Entity The FWPMO has been established under the Fuzhou Development and Planning Commission Under its overall control and management, the Fuzhou UrbanConstruction Development Company will be the implefienting entity for the Road component, and the Fuzhou Group Public Transport Company will be the implementing entity for the Public Transport component. The Technical Assistance component includes contracts that support different municipal agencies, and will be coordinated by FWPMO. The costs related to the component will be borne by Fuzhou Municipal Government. Funds Flow Funds flow for the Bank loan will follow Bank and MOF requirements. One special account will be established and managedby the Fujian Provincial Finance Bureay which has been competent in processing withdrawal applications and overseeing fund flows through its previous Bank-financed projects, which will benefit this project implementation. The funds flow will be as follows: The World Approval Approval FUCDC, Contractors Bank by FPFB -b byFFB -+ FPTGC,or -b and 4 FWPMO suppliers t Accounting Organization and Staffing Qualified project accounting staff who have educational background and work experience commensurate with the work they are expected to perform are in place. To strengthen financial management capacity and achieve consistent quality o f accounting work, a project financial management manual (the Manual) has been prepared. The Manual provides detailed guidelines on financial management, internal controls, accounting procedures, fund and asset management, and withdrawal application procedures. The Manual has been finalized by the Fuzhou Finance Bureauand distributed to all the relevant financial staff. Most o f t k financial or accounting staff o f the implementing entities lack prior experience with Bank projects. To ensure that staff recruited for the project have a good - 41 - understanding ofthe Bank's policy and requirements, it has been further agreed that a well-designed and focused training program will be provided by the Fujian Provincial Finance Bureaubefore loan effectiveness to all relevant staffs. The training program will include, but not be limitedto, the following: Bank's financial management policy and disbursement procedures; Fund, asset, and contract management; Format and content o f project financial statements; and 0 Audit requirements. Accounting Policies and Procedures The administration, accounting, and reporting o f the project will be set up in accordance with Circular no. 13, "Accounting Regulations for World Bank-Financed Projects," issued inJanuary 2000 by the MOF. The circular provides in-depth instructions o f accounting treatment o f project activities and covers the following: 0 Chart o f accounts; 0 Detailed accounting instructions for each project account ; 0 Standard set o f project financial statements; and 0 Instructions on the preparation o f project financial statements. The standard set o f project financial statements mentioned above has been agreed to between the Bank and MOF and applies to all Bank projects appraised after July 1, 1998, and includes the following: 0 Balance sheet; 0 Statement o f source and use o f fund by project component; 0 Statement o f implementation o f loan agreement ;and 0 Special account statement. Each o f the implementing entities will be managing, monitoring, and maintaining respective project accounting records. Original supporting documents for project activities will be retained by originating implementing entities. Inaddition, each implementing entity will prepare financial statements, which will then be submitted to the FWPMO, Subsequently, the FWPMO will then prepare a consolidated project financial statements for submission to the Bank for review and comment on a regular basis. Reporting and Monitoring of Financial Statements Inline with the newly issuedFinancial Monitoring Report guidelines, the unaudited project financial statements will be submitted as part o f the Financial Monitoring Report to the Bank on a semiannual basis (prior to August 15 and February 15 o f the subsequent year). Internal Audit All implementing entities have their own internal audit department or division, which will also verify the financial status and expenditures o f the project. However, this will not be performed on an annual basis. The Bank has not and will not assess the competency o f the various internal audit departments, because it would be too costly. As a consequence, reliance will not be placed on these internal audits. Instead, the FWPMO's monitoring and annual external audit will serve as a mechanism to emure that financial management controls are functioning appropriately. - 42 - Information System The Fuzhou Urban Construction Development Company will use the computerized financial management system User Friend (Yong You), a well-established accounting software package approved by the MOF for this project. Processing o f accounting work will be monitored closely, especially inthe initial stage, to ensure that complete and accurate financial information will be provided in a timely manner. Disbursement Arrangements Inline with the agreement between the Bank and MOF, the project will use traditional disbursement techniques and will not use report-based disbursement. Bank loan proceeds would be disbursed against eligible expenditures as follows: (a) civil works-59.95 percent o f all expenditures in the case o fN J B L and 60.14 percent o f all expenditures for other civil works; (b) Goods-100 percent o f foreign expenditures, 100 percent o f local expenditures (ex factory) and 75 percent o f other items procured locally; (c) consultant services-100 percent o f expenditures; (d) training-1 00 percent o f expenditures; and (e) front-end fee, 100 percent o f expenditures. Disbursement methods, such as replenishment, reimbursement, direct payment, and special commitment, will be available to the project. The statement o f expenditures (SOE) limits will be set up in line with procurement prior review thresholds inTable A7.2. Table A7.2: Disbursement Arrangements-SOE Limits Contract amounts less than US$ Expenditurecategory equivalent (US$) Civil Works US$3,000,000 Goods US$300,000 Consulting Firms us$200,000 Individual Consultants US$50,000 Training N o limit; all eligible A special account will be established in the Fujian Provincial Finance Bureau The authorized allocation o f the special account will not exceed US$7 million equivalent to about four months o f eligible expenses reimbursable via special account. The initial authorized allocation from the Bank will be US$4 million until the aggregate withdrawals and outstanding special commitments equal or exceed US$30 million equivalent. The Bank funds will be disbursed from the special account set up at the FujianProvincial Finance Bureauto the Fuzhou Finance Bureau, then to the project implementing entities andor to suppliers and contractors. The Fujian Provincial Finance Bureau will be directly responsible for the management, monitoring, maintenance, and reconciliation o f the special account activities o f the project. Supporting documents required for the Bank's disbursements will be prepared and submitted by respective project-implementing entities to the FWPMO, then to the FuzhouFinance Bureauand FujianProvincial Finance Bureau for final verification and consolidation before submission to the Bank. The flow o f the withdrawal application will be as follows: - 43 - - FPTGC by b FFB b byFPFB FWPMO Allocationof Loan Proceeds Proceeds o f the loan will be disbursed against expenditure categories, as shown in Table A7.3. Table A7.3: Allocation of Loan Proceeds Amount in US$ Expenditurecategory million Financingpercentage Civil Works 90.53 59.95% for NJBL and 60.14% for all other civil works Goods and Equipment 4.89 100% of foreign expenditures, 100% o f local expenditures (ex factory cost) and 75% o f local expenditures for other items procured locally Consultant Services and Training 4.33 100% Total project costs 99.75 Front-end fee 0.25 FinancialManagementAction Plan The Financial Management manual specifies a training schedule that will ensure that all relevant project staff are fully trained before any disbursements are made. Supervision Plan A detail supervision plan for this project will be included as part o f the China Audit Strategy document. This document takes into consideration o f the size o f project and the FMriskrating o f this project. - 44 - Annex 8: ProcurementArrangements CHINA: Fuzhou NantaiIslandPeri-UrbanDevelopmentProject General Procurement for the proposedproject will be carried out in accordance with the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits dated May 2004 and Guidelines: Selection and Employment o f Consultants by World Bank Borrowers dated May 2004, and the provisions stipulated in the Legal Agreement. For each contract to be financed by the loan, the different procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame have been agreed between the Borrower and the Bank and are documented in the Procurement Plan. The Procurement Plan will be updated at least annually or as requiredto reflect the actual project implementation needs and improvements in institutional capacity. Procurement of Works (US$150.57 million) Works will be procured under this project for both the road and the public transport component: NJBL, 3RR, Kuiqi Bridge, and Jinshan Bus Depot. The procurement will be done using the Bank-approved Chinese Model Bidding Documents (MBDs) and the Bank Standard Bidding Documents for all International Competitive Bidding(ICB) and NCB. All new revisions to the Bank's Standard BiddingDocuments since 1997 will be incorporated into the existing Model Bidding Documents. Civil works contracts estimated to cost above US$15 millionwill be prequalified and procured through ICB; NCB will be wed for contracts estimated to cost less than US$15 million; and for contracts estimated to cost less than US$lOO,OOO, the National Shopping (NS) procedure will be used. Procurement of Goods (US$4.89 million) Goods procured under this project will include the equipment under the public transport component and the FWPMO's office equipment. The procurement will be done using the Bank-approved Chinese Model Bidding Documents and the Bank Standard Bidding Documents for all ICB and NCB. All new revisions to the Bank's Standard Bidding Documents since 1997 will be incorporated into the existing Model Bidding Documents. Goods contracts estimated to cost above US$500,000 will be procured through ICB; NCB will be used for contracts estimated to cost less than US$500,000; and for contracts estimated to cost less than US$O.l million, the N S procedure will be used. Selection of Consultants (US$4.33 million) Consultants are expected to be hiredto provide services inthe following areas: (a) construction supervision; (b) strategic planning TA, (c) support for a long-term public transport plan; (d) development o f a five-year public transport plan; and (e) technical specifications for the MIS and the GPS. Quality- and Cost-Based Selection (QCBS) and Fixed-Budget Selection(FBS) methods will be used for contracts estimated to cost above US$200,000; the contract estimated to cost less than US$200,000 per contract may use the Selectionbasedon Consultants' Qualifications (CQS). Individual Consultants (ICs) may also be hired to review the technical specifications for the GPS and MIS systems. - 45 - Short lists of consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. Assessment of the Agency's Capacity to ImplementProcurement All procurement will be carried out by the Fuzhou Urban Construction Dev,elopment Company and the Fuzhou Group Public Transport Company for their respective components with the coordination and assistance o fthe FWPMO. With the exception o f the NJBL subcomponent o f the strategic road infrastructure component (see below), the companies and the FWPMO will also be assisted by three procurement agents hired by Fuzhou for this purpose. The three agents are the China Far-East International Tendering Company, China International Tendering Company (CITC), and CNCCC International Tendering Company. These agents have more than 20 years o f handling Bank-financed procurement. Procurement agents will assist with the preparation and advertisement o f biddingdocuments, bid opening, bid evaluation, and so forth Inthe case o f NJBL, to facilitate advance works that will be partially financed via retroactive financing, it was decided that the procurement process would be primarily managed by the Fuzhou Urban Construction Development Company with the assistance of FWPMO. A contract for advance works for this subcomponent has been signed (after it was found to be consistent with Bank guidelines duringa prior review). The Bank assessed the capacity o f the implementing agencies to implement procurement actions for the project inNovember 2004. The assessment reviewed the organizational structure for implementing the project and the interaction between the project's staff responsible for procurement and the relevant provincial and municipal units for administration and finance. The overall project risk for procurement is average. ProcurementPlan The FWPMO, at appraisal, developed a procurement plan for project implementation, which has been approved by the Bank. This plan is available with the FWPMO, as well as inthe project's database and inthe Bank's external Web site. The Procurement Plan will be updated in agreement with t k Bank annually or as required to reflect the actual project implementation needs. Frequencyof ProcurementSupervision Inaddition to the prior review supervisionto be carried out from Bank offices, biannual supervision missions to visit the field to carry out post review o f procurement actions are recommended. Detailsof the ProcurementArrangements(includingthose involvingInternationalCompetition) Goods,Works, and NonconsultingServices Table A8.1 contains a list o f works contracts to be procured, and Table A8.2 contains a list o f goods contract packages to be procured. - 46 - Table A8.1: Works Expected Domestic Review by bick Ref. Contract Procurement P- preference bank opening no. (description) method Q (yedno) (prior/post) date Comments NWl.l Nanjianbin NCB N N Prior Nov 04 Advance Lu-Phase I: Works Civil Works NW1.2 Nanjianbin NCB N N Post Apr 06 Lu-Phase I: Lighting Works NW1.3 Nanjianbin NCB N N Post Apr 06 Lu-Phase I: Greening Works NW2 Nanjianbin NCB N N Post May 06 Lu- Phase 11: Civil Works NW3 Nanjianbin NCB N N Post May 06 Lu- Phase 111(Qianheng Lu): Civil Works TW1.l Third Ring NCB N N Prior Jun 06 RoadPhase 11-km 0+726 to km 3+ 600: Civil Works TW1.2 Third Ring NCB N N Prior Jun 06 RoadPhase 11-km 3+600 to km 6+400: Civil Works TW1.3 Third Ring NCB N N Prior Jun 06 RoadPhase 11-km 6+400 to km 8+736: Civil Works TW1.4 Third Ring NCB N N Prior Dec 06 RoadPhase 11-km 0+726 to km 8+736 (8.01 km): Lighting Works TW1.5 Third Ring NCB N N Post Dec 06 Road Phase 11-km 01-726to km - 47 - Expected Domestic Review by bid- Ref. Contract Procurement P- preference bank opening rior/ ost date Comments 8+736 (8.01 km): Greening Works TW2.1 Third Ring ICB Y N Prior Apr 07 Road Phase 11-km 8+350 to km 10+150 (1.8 km) Fuxia Interchange: Civil Works TW2.2 Third Ring ICB Y N Prior Apr 07 Road Phase 11-km 10+150 to km 11+600 (1.45 km) Fuquan Interchange: Civil Works KW1 Kuiqi Bridge: ICB Y N Prior Apr 07 Civil Works JW1 Jinshan NCB N N Prior Feb 07 Depot- Phase I:Civil Works JW2 Jinshan NCB N N Post Dec 07 Depot- Phase 11: Civil Works P-Q, prequalified. S, satisfactory. - 48 - Table A8.2: Goods Expected Domestic Review by bid- Ref. Contract Procurement P- preference bank opening no. (description) method Q (Y eslno) (prior/post) date Comments JG1.l Jinshan ICB N Y Prior Aug 07 Depot- PhaseI: Maintenance Equipment JG1.2 Jinshan NCB N Prior Aug 07 Depot- Phase I:Gas Station Equipment JG2.1 Jinshan ICB Y Prior Aug 08 Depot- Phase 11: Maintenance Equipment JG2.2 Jinshan NCB N Post Aug 08 Depot- Phase 11: Gas Station Equipment JG2.3 Jinshan ICB Y Prior Aug 08 Depot- Phase 11: GPS Equipment JG2.4 Jinshan ICB Y Prior Aug 08 Depot- Phase 11: GIS and MIS Equipment JG3 Jinshan NS N Prior Depot- Phase I: Office Equipment G1 FWPMO- NS N Post Office P-Q,prequalified. ICB and NCB contracts estimatedto cost above US$3,000,000 per contract for civil works and US$300,000 for goods per contract will be subject to prior review by the Bank. Inaddition, the first NS, NCB, andICB contracts for civil works and goods for each component, regardless of the contract value, shall be subject to prior review. Consulting Services Table A8.3 provides a list of consulting assignments. The following is noted: - 49 - (a) The first QCBS, FBS, CQS, and I C contracts, regardless o f the contract value, shall be subject to prior review. (b) Consultancy services estimated to cost above US$200,000 per contract for firms and above US$50,000 per contract for individual consultants, and all single- source selection o f consultants for assignments will be subject to prior review by the Bank. Terms o f Reference for all consultancy contracts will be subject to prior review by the Bank. (c) Short lists o f consultants for services estimated to cost less than US$300,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisions o f paragraph2.7 o f the Consultant Guidelines. Table A8.3: List of Consulting Assignments Expected Review by proposals Ref. Selection Bank submission Contract no. Description of assignment method (Prior/Post) date duration TC 1 Third Ring Road Phase 11-km OCBS Prior Jul 06 0+726 to i m 8+736 (8.01 km): Construction Supervision TC2 Third Ring Road Phase 11-km QCBS Prior Apr 07 8+350 to km 11+600 (3.25 km): Construction Supervision KC1 Kuiqi Bridge: Construction QCBS Prior Apr 07 Supervision JC1 Jinshan Depot-Phase I: CQS Post JulO6 Construction Supervision JC2 Jinshan Depot-Phase 11: CQS Post Feb 07 Construction Supervision JC3 Technical Specifications for IC Prior Apr 06 MIS JC4 Technical Specifications for IC Prior Oct 06 GPS c 1 Strategic Planning TA QCBS Prior Aug 06 c2 Long Term Public Transport QCBS Prior Dec 06 Plan c3 Preparation o f Initial Five- QCBS Prior Dec 06 Year Forward Planning Program c 4 Training RetroactiveFinancing Inaccordance with paragraph3 o f Schedule 1ofthe Loan Agreement, only payments for expenditures made after February 1,2005, are eligible for retroactive financing, and the ceiling for such payments i s limited to US$2.5 millionfor civil works (for NJBL) and training. - 50- Annex 9: Economicand FinancialAnalysis CHINA: FuzhouNantaiIslandPeri-UrbanDevelopmentProject Economic Analysis Overview An economic evaluation was conducted for the strategic road component. This accounts for about 88 percent o f the loan (91 percent o f total project cost) and includes three road investments: NJBL, 3RR (the Ringroad), and the KuiqiBridge. The design o f first phase of the bus depot has been planned on land already available for the bus company and has been optimized from a cost-effectiveness perspective. The depot is expected to result in lower costs and higher quality o f service for passengers as a result o f higher bus productivity (lower breakdown rates, higher utilization) from enhanced routine and nonroutine maintenance. Implementation o f the bus priority measures will benefit passengers intime savings, as well as operators (higher bus productivity translating to lower operating costs). Global experience suggests that measures that provide public transport priority over private cars have very highaggregate and distributional benefits in urban environments particularly in situations (as in Fuzhou) where most trip makers do not have access to private vehicles. Both costs and benefits reflect February 2005 prices, and a project life o f 20 years i s assumed, The financial costs have been converted to economic costs by the elimination o f price contingency, taxes, custom duty on imported materials and by the application o f shadow price factors.* The resulting overall economic cost i s about 88.5 percent o f the financial cost. Methodology Empirical evidence across the world suggests that, as incomes increase and facilitating technologies become available, urban residents have repeatedly exhibited a preference for consuming more housing (available at lower costs outside the city center) in exchange for longer (and sometimes costlier) travel commutes. As a result, when the choice i s offered to them, many residents (both existing residents and new migrants) when choosing where to live, choose to consume (relatively high amounts of) lower-cost, lower-density housing outside the city center with a greater travel (time and cost) burden. In other words, a road facilitating urban expansion generates three kinds o f benefits: savings in travel times and costs for residents already located near the new road, net welfare enhancement from consuming the new housing at the new location for residents who choose to locate near the road because o f the newly offered access, and potential congestion relief for residents inthe dense "old" part of the city that stayed where they were. An estimate o f transport user benefits, that is, savings invehicle operating costs and passenger travel time derived from an urban transport network analysis, i s the standard methodology used to estimate the ecommic benefits o f urban transport investments. Conceptually these benefits can be measured in two ways, either as transport benefits to Financial cost estimates were converted t o economic costs by shadow pricing major cost components and by applying aggregate conversion factors estimated in previous Bank-financedprojects and studies. The impact o f these conversions was less than 5 percent. Detailed calculations are in the project file. - 51 - users (time savings and vehicle cost savings) and nonusers (time savings from congestion relief) or in terms of the appreciation in land values derived from increases in access quality. The two streams of benefits are not independent, in that appreciation in land value reflects a capitalization o f transport benefits. The transport benefits are easier to estimate ex ante and are the primary source o f analysis for the road components reported here. For this project, the Fuzhou Designand Planning Instituteused a standard urban transport planning software package, EMME/2, which was calibrated with data from household and citywide vehicle travel origin-destination surveys, and traffic counts at various locations. The model was then used to simulate network traffic performance under different scenario-with and without the project. The simulation results, mainly in the form of travel distance, time, and speeds for each personal or vehicular trip, were usedto estimate travel time and cost savings that constitute the transport user benefits. Inaddition to the alternatives discussed inAnnex 10, the initial project proposedby the Fuzhou Municipal Government did not include the KuiqiBridge. The bridge was added to the project in response to concerns about the economic viability o f the eastern sections o f the ring road in the absence o f the bridge. This analysis was conducted using fixed origin destination tables that assume that the planned levels o f population growth forecast for Nantai Island would be achieved even in the absence o f the project investments. To the degree that such an assumption overstates the willingness o f people to move to Nantai Island in the absence o f quality transport links to the central city, this assumption understates the benefits o f the investments and is conservative. Specifically, such an analysis understates the net welfare increase associated with the move to lower-density living in NantaiIsland. Conversely, the road investments may induce higher levels o f population growth, with greater individual benefits. Ultimately, although the local government retains control over population movements through the residence permit or hukou system, actual growth will likely reflect a combination o f economic and regulatory influences. Summary of Benefits and Costs The quantified benefits include both savings in vehicle operating costs and personal travel time, which represent the major share o f the total project benefits. Other project benefits, such as improved traffic safety, reduced the road congestion and auto emission, and intracity freight transport time savings were considered, but not in monetary terms because o f the lack o f reliable data. The EIRR and N P V were estimated on the basis o f savings in vehicle operating costs and personal travel time against the total project costs. Since other benefits were not included in the calculation, the EIRRand N P V presented in this Annex can be considered somewhat conservative. The cost o f each component included costs for physical works, detailed engineering design, implementation supervision, and physical contingencies. Annualized operations and maintenance costs were also included in the evaluation. Main Assumptions Population forecasts (see Table A9.1) for the Fuzhou urban area and Nantai Island were based on future population growth projected in Fuzhou's economic planning. These reflect an annual growth rate for Nantai Island o f 2.9 percent inthe period 2002-2020. The population o f the Fuzhou urban area is forecast to increase by 2.9 percent annually - 5 2 - through 2010 and 2.5 percent for the subsequent 10 years. These population growth estimates are certainly reasonable, given the larger expectations of urban migration concentrating on large coastal economic centers. Table A9.1: Trends in Population,Fuzhou Urban Area and Nantai Island Area 2000 2002 2010 2020 Population in Fuzhou Urban 1,400,000 1,580,000 2,000,000 2,400,000 Area Population in Nantai Island 344,000 480,000 600,000 800,000 (1999) Total person trips are expected to grow with the population. GDP per capita in Fuzhou Municipality was US$2,200 per capita in 2001. GDP is forecast to continue growing between 8 and 10 percent per year, which i s slightly lower than the rate o f growth recorded in the past 10 years. Incomes o f urban residentsin Fuzhou City are considerably higher than rural incomes and are growing at a faster rate. Motor vehicle ownership is forecast to grow at a rate slightly higher than the GDP (at 13.5 percent a year) through 2010 and at a lower rate (8.9 percent annually) in subsequent years. Actual motor vehicle growth in the last two years in Fuzhou has been considerably higher (a 27 percent annual increase in2002 alone) after past regulatory restrictions for vehicle registrations were lifted. Vehicle operating cost (VOC) savings by vehicle type and passenger travel time costs by mode were based on locally provided basic cost data. The VOC was calculated usingthe following formula: VOC=(Cw - Cy)x Q x K x 365 where CW = the VOC on the existing road (without the project), CY = the VOC on the existing road (with the project), Q = traffic, and K = the length of the new road. For passenger time savings (PTS), the formula is as follows: PTS = P x Q x K x T x 365 where P= value o f time, Q = traffic, and T = time savings. Following the guidelines suggested inthe World Bank InfrastructureNote No. OT-5, "The Value of Time inEconomic Evaluation of Transport Projects," the values of travel time in Table A9.2 were assumed. - 53 - Table A9.2: Values of Time by Trip Purpose Trip purpose Value Commuting trips 30 percent of household hourly wage, based on international empirical evidence Business trips 130 percent o f household hourly wage, considering cost to employers Other noncommuting and 15 percent o f household hourly income school trips Forecast Volumes and Economic InternalRate of Return Traffic volumes on the three road components at the end o fproject implementation and in 2020 are presented inTable A9.3. Table A9.3: Forecast Traffic Volumes (average daily traffic) Location 2010 2020 NJBL 12,389 26,038 3RR 38,004 67,074 KuiqiBridge 25,386 59,712 The overall EIRR for the three components i s estimated at 15.5 percent, and NPV (at 12 percent discount rate) i s estimated to be Y 489.3 million, as summarized in Table A9.4. Table A9.4: Economic EvaluationSummary NPV (12%, milliomof Location EIRR (in YO) yuan) NJBL 24.4 287.8 3RR 13.5 135.0 KuiqiBridge 12.8 66.5 Total 15.5 489.3 The distribution o f the estimated benefits show that the main beneficiaries are the road users, and that passenger vehicles (including buses) will receive 56.5 percent o f the project benefits, whereas trucks will receive 43.5 percent. The breakdown o f benefits is shown in Table A9.5. - 5 4 - Table A9.5: Distribution of the Net Benefits (millions o f yuan) Road Benefits Road user agency Society Total benefits 9,911.5 (2,557.7)' 7,353.8 By vehicle: Passenger Freight Total 4,154.2 3,199.6 7,353.8 56.5% 43.5% 100.0% * Net benefits for the road agency are negative as a result ofinvestment and maintenance costs. Sensitivity Analysis The basic evaluation of the project, by subcomponent and on the whole, shows that the investments are economically viable, and the sensitivity tests (as shown in Table A9.6) with respect to a one-year delay inproject completion, higher cost, lower benefit, lower passenger time savings, zero growth o f the time value, and the lower traffic projection on the project confirm this result. Table A9.6: Sensitivity Tests on the Economic Evaluation of Project EIRR NPV (12Y0, (YO) millions of vuanl . I (a) Delay the completion by one year 14.2 326.6" Higher capital cost (+lo%) 14.2 335.4 (b) Lower benefits (-10%) 14.1 285.5 Combine (a) and (b) 12.8 122.0 Lower value o f PTS (15%) 14.7 369.0 Zero growth o f time value 14.0 250.6 Lower traffic projection (-10%) 13.6 211.2 Switching values (c) Cost increase to reduce EIRR to 130% 12% (d) Benefit reduction to reduce EIRR 76.5% to 12% Combine (c) and (d) to reduce HRR Cost: 113%; benefits: 87% to 12% Inaddition, the sensitivity tests with variations incosts and benefits o f the project indicate that the conditions for the project's viability to fall below the minimum acceptable-for example, a negative NPV by using 12 percent discount rate or an EIRR lower than 12 percent-are unlikely to occur. Benefits would have to fall to less than 76.5 percent o f those in the base case with no change in costs, costs would have to increase to more than 1.3 times those o f the base costs, or costs would have to increase by 13 percent and benefits fall to 87 percent at the same time. The results of sensitivity tests (EIRR inpercentage) to cost and benefit variation are summarized in Table A9.7. - 55 - Table A9.7: Sensitivity of EIRR to Cost and BenefitVariation (percent) Variation Variationin benefits in cost -50 -40 -30 -20 -10 0 10 20 -40 13.1 15.5 17.8 19.8 21.8 23.6 25.3 27.0 -30 11.1 13.4 15.5 17.4 19.2 20.9 22.6 24.1 -20 9.5 11.7 13.7 15.5 17.2 18.8 20.3 21.8 -10 8.2 10.3 12.2 13.9 15.5 17.0 18.5 19.8 0 7.0 9.1 10.9 12.5 14.1 15.5 16.9 18.2 10 6.0 8.0 9.7 11.4 12.8 14.2 15.5 16.8 20 5.0 7.0 8.7 10.3 11.7 13.1 14.3 15.5 30 4.2 6.1 7.8 9.4 10.8 12.0 13.3 14.4 ProjectRisks All the project components show acceptable economic returns. The Fuzhou Municipal Government has extensive experience inthe construction and operation o f high-grade highways, bridges, and bus terminals, thereby minimizing the technical risks associated with the implementation o f the project. The main tangible risk is that o f prolonged delays that affect the construction schedule. The impact o f uncertainty was tested through the probabilistic risk analysis. ProbabilisticRiskAnalysis for Economic Evaluation To determine the degree o f uncertainty for the project, a probabilistic risk analysis using Monte Carlo techniques was carried out. In a Monte Carlo analysis, each uncertainty factor i s allowed to vary at random between set limits, and all uncertainty factors are allowed to change simultaneously. Monte Carlo simulation provides probability distributions o f the potential outcomes o f decisions. By analyzing these distributions, we can assess the risk associated with making various decisions (or probabilistic risk analysis). The product o f the analysis i s ajudgment on the possible range o f the decision variable, and on the likelihood o f each value within this range. The highest uncertainty factors associated with the economic evaluation o f the project have been identified as (a) traffic growth rate, (b) passenger time savings, (c) the value o f vehicle operating costs, (d) the changes o f capital investment, (e) the growth rate o f passenger time savings, and (f) delay inthe opening by one year. The results o f probabilistic risk analysis show that the EIRR for the most likely scenario i s 17.3 percent, the low scenario is 11.5 percent, and the highscenario is 25.5 percent. The standard error of the mean is 0.5 percent. The detailed results o f the Monte Carlo test and probabilistic riskanalyses are summarized inTable A9.8. - 56- Table A9.8: ProbabilisticRiskAnalyses Summary (percent) Range of EIRR Most likely EIRR Standard error of the mean NJBJ 16.0 33.3 23.8 0.5 3RR 9.7 --23.6 15.6 0.5 KuiqiBridge 10.1 24.8 16.2 0.5 Total 11.5 --25.5 17.3 0.5 FinancialAnalysis As the summary table (Table A9.9) indicates, the Fuzhou Finance Bureauanticipates considerable growth both in total available revenues and in revenues available to finance capital investments, in the coming years. Table A9.9: Summary FiscalAnalysis, 2002-08 investment Actual capital construction 154 247 Note; Amounts inthe shaded areas signify forecasts. Source: FFB, October 2004. The Finance Bureay however, spends most its financial planning effort on year-to-year planning and budgeting, and no systematic financial plan i s available for a longer period. Moreover, the analysis indicates that a large proportion of the existing (and forecast) revenues are derived from one-time sources, such as taxes on construction, property transactions, and new development, with recurring sources providing a relatively low contribution. Finally, as with other Chinese cities, transparent balance sheets based on internationally accepted accounting principles are not available. Thus it is not possible to obtain a full overview o f the city's financial situation. Although 2003 levels o f financing available for capital investments would be adequate to finance the counterpart funds for the Bank-financed project, they in themselves would not be adequate if the city were to simultaneously engage in additional significant infrastructureprojects. Other than the Bank urban transport project, the municipal government i s proposing a wastewater plant project (financed by the Asian Development Bank (ADB)), a major railway bridge and improvements to a new railway station on - 57- Nantai Island (to be partially financed by the Ministry of Railways), and a series of regional expressways (to be partially financed by the Ministry o f Communications) in the next five years. However, although all these projects will make counterpart fund demands on the city, much of the financing will come from external sources, such as the ADB, the Ministryo f Railways, and the Ministry of Communications. Furthermore, evenifthe city's revenue base grows slower than anticipated, the Fuzhou economy i s dynamic and fast growing, and it i s reasonable to expect that significant revenue growth will indeed occur. Inthe context of other similar fast-growing Chinese cities, this level of fiscal aggressiveness is not uncommon. This is best put in perspective by examining the total amount o f funds expended by Fuzhou Municipality (combining own and borrowed funds) inthe period 2002-04 (see Table A9.10).Inthis three-year periodalone, the municipality financed close to US$700 million in infrastructure. - 58- Table A9.10: Trends in CapitalInfrastructureExpenses,Fuzhou Total Fundsspent (millions US$) (millions Project US$) 2002 2003 2004 LuoyuarrChangle Expressway 391.22 85.70 n.a. n.a. Jingfu National Artery Road. Fuzhou Connection (including Jinshan Bridge) 5 1.46 22.77 n.a. n.a. Jiangyin 30,000-ton All Purpose Pier (also good for 50,000-ton Container Pier) 24.04 12.72 n.a. n.a. Fuzhou Yangli Wastewater Disposal Plant 102.87 29.92 n.a. n.a. FugingMinjiang Water- Diversion Project 68.43 4.94 n.a. n.a. Jingfu Expressway, Fuzhou Section 548.80 169.37 117.65 117.65 Fuzhou City 2nd Ring Road Phase III(including the 5th bridge) 149.46 20.36 56.93 16.93 3RR Phase ISection A 25.42 10.84 n.a. n.a. Fuzhou Second Water Supply Project 83.77 8.99 11.42 n.a. Guohuo East Road 16.87 9.64 n.a. n.a. Wulongjiang Thoroughfare Phase I11 5.93 n.a. 3.48 n.a. Gianhengbei Lu 8.43 n.a. 2.84 n.a. Railway Station Remaking Project 16.87 n.a. 8.61 1.69 Urban Main Secondary Street Construction 31.81 n.a. 22.96 n.a. New District Road Viaduct Construction 29.94 n.a. 7.78 n.a. Urban Intercity River Work 6.39 n.a. 2.26 1.64 Airport Expressway Phase I 164.94 n.a. n.a. 26.06 City Civil EngineeringRoad Construction(municipality outside urban area) 97.73 n.a. n.a. 36.44 New Zone Civil Engineering Road. Bridge Construction 65.06 n.a. n.a. 12.29 Urban Civil EngineeringRoad Construction 32.17 n.a. n.a. 12.45 Urban Road Junction Renovation 4.16 n.a. n.a. 13.13 Total n.a. 375.25 186.00 134.58 n.a. Not applicable. Source; FDRC, March 2005. - 59 - These data suggest that the demands o f the proposed Bank-financed project, although significant inabsolute terms, are not particularly large relative to the recent trends in infrastructure investments in Fuzhou. At the same time, the available data suggest that the city's financial planning i s based on a fairly aggressive strategy withpossible long-term debt implications. For the project, risks associated with the availability o f adequate counterpart funds are mitigated by the following: 0 In order to increase their financial capability, the municipality has decided to use domestic bank loans for the counterpart funding. More than half the counterpart funds (54 percent) will come from domestic bank loans, and the rest will come from normal municipal capital investment funds. (The municipal government has provided the Bank with all signed lending agreements for the domestic bank loans.) 0 The Fujian Provincial Finance Bureau has provided the Bank with a guarantee concerning the availability o f adequate counterpart funds to ensure timely project implementation. This information and the analysis of the available data indicate that the counterpart funding requirements, including interest during constructionand commitment fee and the interest for the domestic bank loan, will not pose a hurdle to implementation. - 60 - Annex 10: SafeguardPolicy Issues CHINA: FuzhouNantaiIsland Peri-UrbanDevelopmentProject Resettlement LandAcquisitionandResettlement-RelatedImpacts The project consists o f three components. The first is a road component, including Nan Jiang Bin Lu (NJBL), the 3RR, and the KuiqiBridge (including connections to the urban road network). These investments require land and structures. The second component i s a public transport component, including the development o f a bus priority corridor, a bus depot, and a passenger interchange (to be constructed in two phases). The first phase o f the depot-interchange will use municipal land and the second phase o f bus depot will require land and structures. The third component is institutional strengthening and TA and will not require any land or structures. Starting inNovember 2003 (through the present), the F W P M O hired the Guangzhou Road Extension Office to conduct the field survey work and develop a Resettlement Action Planfor the project. The Guangzhou Road Extension Office, based in Guangzhoy GuangdongProvince, has extensive prior experience with Bank projects, and as a result has a thorough knowledge o f Bank policies. The Resettlement Action Plancovers NJBL and the 3RR and was formally adopted by the Fuzhou Municipal Government on March 18, 2005. This final Resettlement Action Planis consistent with World Bank OP 4.12 on Involuntary Resettlement. The exact alignment o f KuiqiBridge has not been finalized. The scale and exact location o f the second phase o f the bm depot have also not been finalized. These investments are scheduled for construction only after the first two years. The Resettlement Action Plan does not cover these components. As the result, a Resettlement Policy Framework has been drafted to cover these components and treat any unexpected resettlement issues. The bus priority component does not entail any resettlement. The first phase o f bus depot will use municipal land that was acquired by the municipality in 2002. Censusand Socioeconomic Survey The Resettlement Action Planwas based on available preliminary designs, a census o f the displaced population, an inventory o f impactedassets, a socioeconomic survey, and extensive consultations with the displaced population. The census o f the displaced populations was conducted by a survey team that included local government officials and representatives from the affected villages. The census and various different categories o f impacts were identified and recorded in tabular format for each household and village. They were verified and signed o f f by the village committees, the head o f the household, and the investigation team. The Guangzhou Road Extension Office also conducted a socioeconomic survey to analyze the project impacts, understand the socioeconomic background in the project- affected areas, and consult the displaced people for their feedback into the resettlement planningprocess. The socioeconomic survey determined that the average land holding per capita i s about 0.3 mu, with a relatively high average agricultural yield. The survey also found that nonfarm incomes accounted for about 90 percent o f total income on - 61 - average; suggesting that nonfarming positions would be reasonable alternatives that could be considered for the affected people. Project Impact According to the Resettlement Action Plan, construction o f N J B L and the 3RR will affect a residential committee and 11 villages in 3 townships o f Cangshan District in Fuzhou by permanent land acquisition The project will require the permanent acquisition o f 744 mu (50 hectares) o f land (54 percent collective agricultural land, 30 percent orchards, and 16 percent uncultivated). Intotal 1,122 households (3,379 people) are affected, o f which 603 households (2,040 people) are in rural areas; 229,748 square meters o f structures will be demolished (30 percent urban and the rest rural). A Catholic church (the Fanchuanpu Cathedral) will also be affected. As designs get finalized, it would not be unusual to find marginal decreases in these amounts o f land acquisition and structural demolition, as well as small changes in proportion among categories o f affected land and structures. The Resettlement Action Planwas developed in accordance with local laws and the policies o f the World Bank set out OP 4.12 on Involuntary Resettlement, and was based on consultations with the affected people. The plans describe in detail the impacts, affected.populations, consultation process, rehabilitation measures, budget, and implementation and monitoring arrangements. Legal Framework The project adopted the following policies in its resettlement planning and the standing resettlement framework for rural roads (applicable to rural project affected people): 0 World Bank Operative Policy 4.12 on Involuntary Resettlement; 0 Land Administration Law o f the People's Republic o f China; 0 Implementation Regulations o f the Land Law o f the People's Republic o f China; Forest Law o f the People's Republic o f China; 0 Relevant Fujian Province regulations on land, water resoures and forest resources; and 0 Fuzhou Urban Housing Demolition Management Regulation The following policy principles were followed in developing the Resettlement Action Plan: 0 All possible measures muldbe explored to minimize adverse impacts, including engineering, technical, environmental, and economic measures; 0 The objective o f resettlement planning would be to increase or at least restore the living standard o f the affected population; 0 All affected assets muldbe compensated at replacement cost without depreciation; 0 The affected people and local governments would be consulted o nthe compensation rates; 0 Compensation would be paid three months before assets were acquired; 0 As far as possible, resettlement would be land-based and, as appropriate, complemented with on-farm industrial employment and self-employment; 0 Affected people and the host population would be encouraged to participate in resettlement planning; and - 62 - 0 As far as possible, those who needed to be resettled would be relocatedwithin existing villages or production teams. Livelihood Restoration Relocation of Households The project will affect urban residents and rural farmers. For the affected residents, the FWPMO will pay cash and allocate apartments for those whose structures are affected. For rural farmers, the P M O will provide house plots for reconstruction o f houses with up to five or six floors. Livelihood Restoration The rural population densities are relatively highand the size o f the average farm (at 0.3 muper capitabefore acquisition) relatively small. The survey data indicatedthat agricultural income was about 10.7 percent o f annual rural family income. The average rural family could contract 667 square meters o f land from its village, an amount inadequate to support the family. The field survey indicated that the main sources o f income for the rural families were private business, migrant labor and employment in village enterprises. These data suggest that the negative impacts o f project-related land acquisition on farm income are relatively small. Resettlement planning has included a review o f impacts on incomes based on the village impact analysis. Two villages were significantly affected; with proposed land acquisition exceeding 10 percent o f total village farming land. Farmers losing agricultural land have the choice o f being compensated in cash, or some combination o f cash and some land. According to national Chinese law, in cases where farmers have asked for land compensation, village committees are authorized to decide (inconsultation with the affected persons and other villagers) how land compensation will be used for livelihood restoration. Generally, in this situation the farmers affected by land acquisition have three alternatives available to them: 0 Providing pensions by using land compensation; 0 Arranging land for those interested in obtaining alternative land for farming; or 0 Providing large cheap apartments that can be rented for increasing family income, Compensation Standards The P M O consulted and negotiatedcompensation standards with eacho f the involved townships. The actual compensation rates were based on replacement cost for various categories o f affected assets. Inthe case o f agricultural land, compensation rates were based on the highest average annual output value per mu among similar land inthe affected townships. Ineach case, compensation rates will meet or exceed legal requirementsand replacement cost valuation, The compensation rates for agricultural land are Y 70,000 (about US$8,537) per mu for paddy land, and Y 29,600 (about US$3,610) for orchard land. These rates are equivalent to about 25 times the average agricultural output. The compensation rate for nonagricultural land will be Y 4,200 (about US$512) per mu. Compensation rates for affected structures in urban areas are based on replacement cost. The rate for residential structures constructed primarily o f brick and concrete will be Y 1,540 (about US$188) per square meter. For residential structures constructed primarily o f brick and wood, the rate will be Y 1,490 (about US$182) per square meter. - 63 - Local authorities have the authority to increase compensation rates for acquired land and demolished structures in response to local variations in property valuation or to meet other local contingencies. In all cases, however, compensation will meet or exceed standards established inthe Resettlement Action Plan. The project also will affect public infrastructure. Compensation based on replacement cost will be paid to the relevant government agencies or local governments to restore the affected infrastructure and services. InstitutionalArrangements The FWPMO has established a project leading group led bya vice mayor, and comprising representatives from relevant departments and the district government. Meanwhile, the F W P M O has set up a multilevel organizational framework to plan and implement resettlement. This framework has resettlement offices under FWPMO, The office has been staffed with experienced experts, and their responsibilities have been specified in detail in the Resettlement Action Plan Other relevant government agencies are also involved, including planning, finance, communications, and land administration at different levels. A detailed training program has been developed and contained in the ResettlementAction Planfor capacity buildinginthe PMO. ResettlementBudget andDisbursement A detailed resettlement budget has been developed on the basis o f the village inventory and the developed compensation rates. This budget includes the base cost, management fees, and contingencies. The base cost includes compensation fund for land, standing crops, houses, attached structures, facilities, land acquisition tax, resettlement subsidy, fund for land leveling, training, and monitoring. The management fee is about 4 percent o f the base cost. The budget includes physical and price contingencies, each estimated to be 10 percent o f the base cost. The total resettlement budget is Y 132 million (US$16 million), about 5.8 percent o f the total project budget. Resettlement will be financed entirely through counterpart funds. Resettlement funds will be disbursed from the FWPMO to the various entitled units through the Resettlement Offices under the FWPMO. Villages will be compensated for land by the resettlement offices. Compensation for standing crops would be paid to villagers by the resettlement office through local banks.The PMO will open a specific account for each village and allocate land compensation three months before the land is acquired. For the private houses and other private assets, compensation will be paid directly to affected farmers and individuals through,direct payments on individual accounts (this i s quicker and more reliable than the standard Chinese practice o f money flowing through the district agency and township before reaching the affected individuals and villages). Compensation for affected public facilities will be paid to the government entity that owns the facility. ImplementationSchedule Resettlement will follow the following principles for scheduling implementation: 0 House demolition will be phased, and civil works will not start before the relocating houseblds move into their new houses. 0 Demolition notice must be served at least three months before relocation, and relocating households will be given at least three months for new house construction. - 64 - 0 Civil works cannot start before compensation payment and land acquisition are complete. 0 Redistribution o f land will be carried out during breaks between seasons. 0 Village-specific livelihood restoration measures will be developed at the same time as the land redistribution. 0 Reconstruction and rehabilitation o f affected public facilities and infrastructure will be completed before civil works start. PublicConsultationand GrievanceRedress The Resettlement Action Planwas prepared with the active participation o f the displaced population. Local governments, village leaders, and the affected population participated inthe census, inventory, finalization ofthe project design, compensation rates, and relocation and livelihood development schemes. Consultation on asset compensation levels and relevant resettlement policies was conducted in August 2004. Project information and resettlement policies were disseminated among the affected population before and during the consultation process. The affected people were also systematically consulted through the social assessment, and their feedback has been incorporated in the Resettlement Action Plan The final draft Resettlement Action Planwas placed in local libraries and published in local newspapers. The F W P M O has prepared a Resettlement Information Booklet and will distribute it to all the displaced households before loan effectiveness. FWPMO has designed a mechanism to address grievances. Any grievances will be addressed through the resettlement management at different levels. The Resettlement Action Plancontains detailed procedures and timeframes for grievance redress. This mechanism will be described in the the Resettlement Information Booklet. ResettlementMonitoring To ensure the smooth and successful implementation o f the Resettlement Action Plan, the FWPMO has designed both internal and independent mechanisms to monitor Resettlement Action Plan implementation. Internal monitoring will be conducted through the resettlement office and will focus primarily onphysical progress o f the Resettlement Action Plan implementation. Hehai University will be the independent monitor. Independent monitoring missions will be conducted every six months. Apart from physical progress, the independent monitor will evaluate livelihood restoration efforts and their effectiveness. The Resettlement Action Plandescribes in detail the monitoring purpose, responsibility, indicators, methodology, procedures, and reporting requirements. Environment ProjectBackground The proposedproject i s a Category A project according to World Bank OP 4.01, since it requires land acquisition and resettlement, and results in increased local emissions and noise levels along roads financed by the project. Fuzhou retained Guangzhou Environmental Science Institute (with Class A Environmental Impact Assessment accreditation from the State Environmental Protection Administration) to prepare the Environmental Impact Assessment documents. The Terms o f Reference for the Environmental Impact Assessment were prepared in early 2004 and were reviewed by the State Environmental Protection Administration in October 2004. - 65 - Draft Environmental Impact Assessment reports were prepared in October 2004 and revisedbased on the Bank's and State Environmental Protection Administration's comments. The final Environmental Impact Assessment reports were submittedto the Bank in April 2005 and found acceptable. The State Environmental Protection Administration approved the Environmental Impact Assessment reports in May 2005. Regulatory, policy, and administrative requirements for environmental assessments o f development projects in China were.followed duringthe preparation and evaluation o f the environmental assessment reports. Inaddition, the applicable World Bank Safeguard Policies that were followed included OP 4.01 Environmental Assessment, OP 4.12 Involuntary Resettlement, OP 4.11 Cultural Property, and BP 17.50 Information Disclosure. BaselineEnvironment Fuzhou i s the capital city o f FujianProvince on the southeastern coast o f China. The total area o f Fuzhou Municipality i s 12,000 square kilometers with a total population o f 5.9 million. Nantai Island i s one of the five urban districts o f Fuzhou, with an area o f 142 square kilometers and a population of 334,000 as o f 1999. The area features a subtropical ocean monsoon climate, mild and humid, with an annual average temperature of 19.6"C and precipitation between 1,000 and 1,500 millimeters. The main river in Fuzhou is the Mingiiang River, which i s about 2,959 kilometers long with a catchment area of 60,992 square kilometers and annual runoffo f 62 billion cubic meters. Mingjiang i s divided by Nantai Island in the northwest into two branches (Nangang in the south and Beigang in the north), which merge again at the southeast end o f the island. The flow distribution between Beigang and Nangang is 56:44 during flood season, 82:18 for average season, and 1OO:O during the dry season. The river section at Nantai Island i s affected by tides from the Minjiang estuarydownstream, More than 20 canals are scattered through the island. Most are heavily silted, and only about half the canals maintain smooth flows. The topography o f Nantai Island features mainly low hills and flat plains. Vegetation is composed o fsecondary plants, mainly secondary forest, and economic plants. A tree- planting campaign has been inplace for years, and an objective o f 21 percent forestry cover has been set for 2005. An important wetland (Shanyutan wetland) at the Minjiang estuary, 30 kilometers downstream from Nantai Island, i s an important habitat for more than 100 species o f indigenous and migratory birds in East Asia, including 6 endangered species. There are five patches o f smaller wetlands scattered inthe upstream o f the river mouth; two o f them, Xingangzhouand Puxiazhoq are about 2 kilometers downstream from the east end o f NJBL. Although these two sites provide habitat for certain birds during high tide, a detailed biodiversity survey o f wetlands along Minjiang and inthe estuary area, conductedby FuzhouMunicipality in 2003, found them not to be as important as the wetlands in the estuary. The Shanyutan wetland has been included in the National Wetland Protection Plan (2002-30) as one o f 45 wetland protection areas in Fujian Province. Xindangzhou and Puxiazhou are not included in this list. A cultural relics survey has been conducted by Fuzhou, and six sites were identified within the project vicinity. One directly affected property is FanchuanpuCathedral. The cathedral, built in 1933, i s the biggest cathedral in Fujian and also the Catholic center o f - 66 - the province. The cathedral and its subsidiary office buildingproperty were classified as provincial protected cultural properties in 1996. The cathedrali s an important place for Catholics in Fuzhoy where an average o f 4,000-5,000 people attend the weekly mass. EnvironmentalImpact Assessment and MitigationMeasure The potential environmental impact o f the project was comprehensively addressed in the Environmental Impact Assessment reports. The key environmental safeguard issues are discussed below. Noise: The major environmental impact o f the road projects and bus depot will be an increase in noise levels bothduringconstruction and in operation Modeling was conducted to forecast the noise level along both sides o f the project roads. It concluded that the noise level will be above the applicable standards at various sections o f the project roads. Sensitive sites were identified as vulnerable to noise impact, and ventilated sound insulation windows were proposed to be installed for all these sensitive receptors to mitigate the noise impact. Other mitigation measures include adoption o f modified asphalt pavement for sound absorption, better road maintenance, speed limits on sensitive sections, enforcement o fvehicle noise standard, and maintenance and zoning modifications (to prevent construction o f sensitive buildings, such as schools, hospitals, and kindergartens within 100 meters o f the roads). Air pollutionduringoperation:Dispersion modeling results showed that the project will lead to incremental air pollution from carbon monoxide, nitrogen dioxide (N02), and hydrocarbons. However, pollutant concentrations along the roads remain below the applicable standards inthe short term. N O 2 levels may exceed allowable standards within 10 meters o f the 3RR and KuiqiBridge in unfavorable weather conditions. The impact o f Jinshan Depot i s limited to within 100 meters o f the site. Mitigation measures include adequate maintenance.of all buses, minimization o f idle time, installation o f an air ventilation system, enforcement o f inspection and maintenance measures, implementation o f vehicle emission control regulations, and establishment o f a greenbelt along the road. The project will also include the development o f a strategic environmental assessment that will address vehicle emission issues and controls. Wastewater:To minimize adverse impacts to surface water duringconstruction, wastewater from construction camps located in rural areas will not be allowed to discharge to surface water bodies directly. The sewage will be held at the site, transported to treatment facilities regularly, or treated on-site usingmethods such as septic tanks to meet the irrigation discharge standards. Jinshan Bus Depotwill eventually accommodate 500 buses, includingparking and maintenance facilities. A maximum o f 210 cubic meters a day (122 cubic meters o f wastewater and 88 cubic meters o frainwater) will be treated byan oil separation facility, The effluent will meet the Class I11Integrated Wastewater Discharge Standard, which can be discharged into the municipal sewage network. Inthe near future, municipal sewage will be further treated at the Jinshan Waste Water Treatment Plant, a secondary treatment plant expected to be operatioml in 2007. Fanchuanpu Cathedral: NJBL will encroach on the property o f a locally significant cultural relic; the Fanchuanpu Cathedral. Extensive consultation has been conducted with the cathedral and relevant government agencies, and various alternatives have been considered to minimize the land occupation. For the buildingrelocation, Fuzhou - 67 - commissioned the Fuzhou Ancient Architecture Institute to develop a relocation and rehabilitation plan, which was accepted by the cathedral. The relocationand restoration plan has been submitted to the Provincial Cultural Relics Bureau for approval, and civil works will start only after approval is obtained. A key concern discussed in the Environmental Impact Assessment i s the potential impact o f vibration during construction on the cathedral. The cathedral is more than 70 years old, and foundations and the structure are expected to need support in order to successfully withstand the impact o f the adjacent construction. Fuzhou has retained Fuzhou Ancient Architecture Institute to conduct foundation and structural checks, and a strengthening plan has been developed. This plan will be implemented before any construction activities commence in this section. Bridge construction impact: The pillars o f KuiqiBridge will be constructed usingthe cofferdam method. All slurry will be treated before being discharged back into the river to minimize the impact of the increased suspended solids. In-water construction activities will be carefully planned to avoid the November-December and MayJune periods when eels and crabs migrate to and from the sea. Additional juvenile eels and crabs will be released to the river to compensate for any loss in population from the bridge construction activities. Potential impact on birds:As already reported, two locally significant wetlands, Xindangzhou and Puxiazhou, are situated 2 kilometers east ofNJBL and about 300 meters upstream from the KuiqiBridge. The Bank hired ornithologists who conducted a wetland survey and concluded that the impact o fconstruction noise and lighting on migratory birds would be negligible. Other miscellaneous impacts are mainly construction related. These include noise from construction machinery, night-timeconstruction, temporary land occupation, generation o f dust, soil erosion, spoil disposal, disruption o f local traffic, and waste from construction camps. The impact o f these will be minimized by appropriate mitigation measures, for example, by using low-noise equipment and techniques, restrictions on working hours, temporary sound barriers for sensitive sites, a set o f procedures for night- time construction management, water-spraying to suppress dust, and coverage o f material transportation vehicles, timely reclamationand revegetation o f temporarily occupied land, reuse spoil as backfilling material and landfill disposal, healthand safety education for labors and routine medical checks, enclosure o f construction sites and arrangement o f temporary passage ways for pedestrians, and design o f appropriate operational procedures for contractors during construction Risks:Riskassessments were conducted for hazardous material transportation on the project roads, with particular attention to the KuiqiBridge. Buffer tanks are designed at both ends o f Kuiqi Bridge to avoid direct discharge o f surface runoff into the Mingjiang River. Further, regulations concerning hazardous material transportation will be strictly enforced during operation. The risk o f gasoline storage in Jinshan Bus Depot was also addressed, and mitigation measures were included in the design, including underground tank design, leak-proof foundation and anticorrosion coating o f gasoline tank pipelines, proper grounding facility, adequate firefighting equipment, an interception ditch and oil separation facility for collecting surface runoff, establishment o f safe distances, and routine monitoring o f groundwater. - 68 - AlternativesAnalysis Various alternatives were carefully assessed for the project, and comprehensive comparison among these options has been carried out with integratedconsideration o f technical, environmental, social, and economic aspects. The final selection was made based on a series o f criteria, for example, avoidance of environmentally sensitive areas and cultural properties, less social interference, less land occupation, less environmental impact, shorter length, safer operation, easy management, low cost, and compatibility with local development planning, inparticular, the following: Nan Jiang Bin Lu Western section of NJBL betweenthe 4th Min River Bridgeand JiefangBridge.An initial plan to widen the existing road in this section was modified in order to minimize resettlement and disruption to the existing urban environment, such as grown trees. FanchuanpuCathedral.The proposed right o fway (or "red line") encroaches upon the property o f an active Catholic cathedral. According to the current proposal, the main building o f the church would not be affected, although an adjacent office building would need to be relocated, and a square in frori o f the church would also be partially acquired and reduced in size. A range o f different alternatives for this section were considered, including alternatives that would (a) move the road and dyke away from the cathedral and encroach further into the river (rejected because o f the potential hydrological impacts on the river and the subsequent need to obtain very time-consuming approvals from national- level flood control authorities); or (b) reduce the width o f the pedestrianand green areas (rejected because it would not make a material impact on the encroachment needed). Alternatives were also considered to minimize the impact on the church during and after construction. Finally, the current alignment, complemented by a rehabilitation planto minimize disruption to the church was selected after a process that included pubic consultation. Easternsection. The original project proposal submitted to the National Development and Reform Commission called for NJBL to continue for 5 kilometers beyond the approach o f the proposed Qian Heng Bridge (where the road will terminate and connect with the local Nantai Island road network). This eastern section would have entailed encroachment on wetlands in the MinRiver and related land reclamation. A number o f alternative alignments were examined over this section, with varying degrees o f impact on the wetlands and differing amounts o f land reclamation. All would have entailed the construction o f around 5 kilometers o f new dyke along the MinRiver. The Fuzhou Municipal Government favored the easterly extension o f NJBL, together with the maximum extent of land reclamation, because o f the economic development potential o f the reclaimed land. However, because o fenvironmental concerns related to the wetlands, a decision was made to exclude the wetlands section and terminate the road at the line o f the proposed Qian Heng Bridge, with a connection to the local road network. Third Ring Road South Alignment. A number of minor alignment variations were considered for key sections o f the road, including east o f Wanbian Bridge (kmO-km 3) in order to reduce the impact on the local village and between k m 6 and km 10 in an attempt to minimize resettlement and impact on an established factory. Neither variation was considered superior, and both were rejected in favor o f the preferred alignment. Between Fuxia Highwayand Fuquan Expressway (km9-km 11) a minor variation to the initial alignment was adopted to - 69 - minimize impact of earthworks and resettlement. A series o f alternative interchange layouts have been considered for the junction with the Fuquan Expressway and the associated approach to the Kuiqi Bridge. The preferred option will minimize resettlement and accommodate all turning movements (including any necessary toll booths). Additional alignment options east o f the Fuxia Highway were considered in connection with possible alternative locations o f the KuiqiBridge-and the possible construction o f a combined road and rail bridge over the MinRiver. Overall, the preferred alignment was selected because it minimizes the resettlement impact and i s compatible with the city's broader development plans to encourage the urbanization o f the south of Nantai Island. Phasing.Initially it was proposedto construct the road intwo phases, with an initial phase (dual two lanes) designed to allow the early development o f adjacent areas. The subsequent upgrading to full expressway standards would be undertaken once traffic demand had been established. However, in practice, the Fuzhou Municipal Government was only considering a two-year gap between initial and subsequent construction phases, and it was agreed that such a plan would not be cost-effective. Additionally no clear phasing plan could be devised that provided the initial access ina cost-effective manner without unnecessary abortive expenditure. It was, however, subsequently agreed that the construction would be phased in two sections-the first between Wanbian Bridge and Fuxia Highway (kmO-km 8.7) and the second from Fuxia Highway to KuiqiBridge (km 8.7-km 11). Construction of the first phase would achieve the primary objective o f releasing adjacent land for development, while construction of the second phase would be deferred to coincide with the construction o f KuiqiBridge. Inclusionof KuiqiBridge.The original proposal submittedby the FuzhouMunicipal Government included the completion o f the 3RR on Nantai Island only-that is, excluding consideration o f KuiqiBridge. The bridge was included in the master plan, but construction had not been programmed. Traffic and economic analyses suggested that significant additional benefits for the 3RR would accrue from the construction o f the bridge linking with the remainder o f the third ring road north of the Min River, the existing city center, and also with the port and industrial areas o f Mawei to the east. The Fuzhou Municipal Government decided to include the bridge inthe Bank-financed project. Kuiqi Bridge Location. Several alternative locations were considered, including a combination with the proposed rail bridge, before the present location was selected. All the other potential locations were rejected for technical (construction costs, approach routes, or need for a minimumspacing between adjacent bridges) or social (scale o f involuntary resettlement) reasons. Bridgetype. Three alternative bridge types were considered, including both continuous beam and cable-stayed bridge structures. The preferred option-a continuous beam with V-shaped piers-was selected on the basis o f both cost and aestktics. Public Transport Component Location:Two alternative sites were considered. Besides the chosen site at the western end o f the Pushang Industrial Zone, an alternative site at the northwestern end o f the Wanbian Industrial Zone was also considered. Both sites are located in Nantai Island. The chosen site was preferred for the convenience o f the location, less sensitive - 70 - surrounding environment, less resettlement, available infrastructure, and compatibility with the urban plan. Depot scale and size:The initial proposals were to develop a large depot and a dispatch center on the full Jinshan site o f more than 12,000 square meters. After considering the proposals, it was decided to divide the development into two phases with the second stage items being subject to the positive findings o f associated TA. The total area o f the initially proposed depot was larger, but the design made poor use o f the available land. By identifying a Phase Iarea to be developed in Stage 1 and making more intensive use o f the land, it was possible to provide sufficient accommodation for parking and maintenance to meet demand for the immediate future. In addition the access, egress, and circulation patterns were improved to minimize delays. By reducing the size o f the depot, it was possible to include a passenger interchange on the Jinshan site, which would be needed for a trunk and feeder type network for the Nantai-College Town areas. Decisions on the scale o f Phase I1o f the depot, together with the interchange and the dispatch center, will be finalized after the TA i s complete. EnvironmentalManagementPlan A stand-alone Environmental Management Planhas been developed for the project, which addresses in detail the environmental management and supervision organizations and responsibilities, mitigation measures, monitoring and reporting programs, budget estimates, and capacity-building requirement. The Environmental Management Planwas formally adopted by the project owners on April 8, 2005, and will be implemented by contractors and supervisedby the FWPMO, local government agencies, and the Bank. The Environmental Management Planincludes provisions that will be integrated into the technical specifications o f the biddingdocuments and contracts to ensure the contractual obligations of contractors. The Environmental Management Planalso requires that contractors and construction supervisors undergo environmental training before commencement o f construction. The Environmental Management Planoutlines environmental training programs for the staff o f various management and supervision organizations and contractors. The Environmental Management Planincludes environmental monitoring programs for both construction and operation phases. Monitoring reports will be compiled once every six mnths and submitted to the World Bank, and will summarize the findings o f the monitoring. PublicConsultationand InformationDisclosure Public involvement has been an integral element o f the Environmental Impact Assessment process, including social economic surveys, interviews with local authorities, public consultation and information disclosure, and public meetings. Details o f consultation and disclosure are documented in Tables A10.1 and A10.2 below. Local public consultation activities and information disclosure for this project i s summarized in Table A10.1 and Table A10.2, respectively. - 71 - Table A1O.l: Public Consultation Summary By whom and for WB Stage Form whom Time Location policy First Questionnaire By PMO and EA team June 5-20, NJBL neighborhood OP4.01 round Survey for 60 local NJBL 2004 affectedpeople Questionnaire By PMO and EA team June 5-20, 3RR/S neighborhood OP4.01 survey for 120 3RWS affected 2004 residents Questionnaire By PMO and EA team August 3- Lipu, Shaoqi, and OP4.01 survey for 40 Kuiqi Bridge 10, 2004 Kuiqi villages affectedresidents Interview PMO and EA team for June 1I, PMO office OP4.01 priests of Fanchuanpu 2004 Cathedral Group PMO and EA team for June 22, PMO office OP4.01 meeting priests of Fanchuanpu 2004 Cathedral Group PMO, design team, and July 14, Fanchuanpuchurch OP4.01 meeting EA team for the church 2004 community Public PMO, design, RAP, August 2, FuzhouHotel OP4.01 meeting and EA teams for 2004 general public Group PMO, design, RAP, August 18, Fanchuanpuchurch OP4.01 meeting andEA team for the 2004 churchcommunity Group PMO, design, RAP, October 25, Fanchuanpuchurch OP4.01 meeting and EA team for the 2004 church community Second Focused By PMO and EA team Nov 22, Foreign language OP4.01 round interviews for affectedresidents, 2004 school; Anlan Shrine; church, schools and the church; wetland industries authority; Lingpu village; Taipingyang, Canqian, and Hebian residentialareas; commerce school and Jufeng Paper Co. Focused By PMO and EA team Nov.3-5 Wanbian, Shanzhi, OP4.01 interviews for affected residents, 2004 Yangzhi, Wushan, schools, temple Wufeng, Puxiazhou, Oushan, and Duyuan villages; Fushan temple; Yixu water plant; Information College Focused By PMO and EA team Nov.18, Lipu, Shaoqi, and OP4.01 interviews for affected residents, 2004 Kuiqi villages, businessowners Lingpu water plant, Group By EA and designteam Nov 26, Fanchuanpuchurch OP4.01 meeting 2004 - 72 - Table A10.2: Information Disclosure Summary Information Date Locationhedia WB policy Notice to the public about June 2004 FuzhouEveningNews OP4.01 the public meetings and locations and contents Project summary andkey August 3,2004 FuzhouDaily OP4.01 EA information Notice to the public on Nov 15,2004 FuzhouTV stations OP4.01 second round of public FuzhouEveningNews consultation including locations and contents , Advertisement on draft EA January 2005 FuzhouEveningNews OP4.01 report locations Draft RAP, EA report, and January 2005 Fuzhoupublic libmy OP4.01 EMP Project-affectedvillage halls Final RAP March, 2005 Fuzhoupublic library OP4.01 PMO Project-affectedvillage halls Final EA and EMP April, 2005 Fuzhoupublic library OP4.01 PMO Project-affectedvillage halls - 73 - Annex 11:ProjectPreparation and Supervision CHINA FuzhouNantaiIsland Peri-UrbanDevelopmentProject Table All.1: ProjectSchedule Stage of project Planned Actual PCN review February 17,2004 Initial PID to PIC July 1,2004 Initial ISDS to PIC September 9,2004 Appraisal February 28,2005 Negotiations October 24,2005 Board or RVP approval December 15,2005 Planned date of effectiveness March 15, 2006 Planned date of midtermreview August 2008 Planned closing date June 30,201 1 Key institutions responsible for preparation of the project: 0 Fuzhou Planning Commission 0 Fuzhou Construction Bureau 0 Fuzhou Urban Planning Bureau Ministry o f Finance National Dewlopment and Reform Commission 0 Fuzhou Municipal Government Bank staff and consultants who worked on the project are listed in Table A11.2. -74 - Table A11.2: Bank Staff and Consultants Assigned to Project Name Title Unit Shomik Raj Mehndiratta Senior Transport Specialist East Asia Transport Sector and TTL unit Carlos Escudero Lead Counsel East Asia Legal Department Robert O'Leary Senior Finance Officer Financial Management and Disbursement Group 1 K e Fang Social Development Specialist Environment and Social Development Department Edward Dotson Lead Urban Transport East Asia Transport Sector Specialist unit Emmanuel Py Junior Professional Associate East Asia Transport Sector unit Dawei Yang Procurement Specialist East Asia Central Operations Services Unit Yi Geng Financial Management East Asia Central Operations Specialist Services Unit Yi Dong Financial Management East Asia Central Operations Specialist Services Unit Z h e h Liu Social Development Specialist Environment and Social Development Department Peishan Wang Environmental Specialist East Asia Environment Unit Haiyan Wang Finance Officer East Asia Disbursement Unit Hsiao-Yun Elaine Sun Manager Operations China Country Office Graham Smith Sector Leader East Asia Transport Sector unit Rocio Malpica Counsel East Asia Legal Department Daniel R. Gibson Senior Social Scientist Environment and Social Development Department Ani1 Somani Senior Environmental East Asia Environment Unit Specialist Rod Stickland Road Planner Consultant Gordon Neilson Public Transport Specialist Consultant Gladys Frame Traffic Management Consultant Alan Cannel1 UrbanPlanner Consukant Goh Hup Chor UrbanPlanner Consultant Leona Tena Wui UrbanPlanner Consultant Bank funds expended to date o n project preparation: 1. Bank resources: US$480,000 2. Trust funds: TF030429: US$lO,OOO TF030484: US$25,000 3. Total: US$515,000 Estimated approval and supervision costs: 1. Remaining costs to approval: US$lO,OOO 2. Estimated annual supervision cost: US$65,000 - 75 - Annex 12: Documentsinthe Project File CHINA:FuzhouNantaiIslandPeri-UrbanDevelopmentProject 1. Feasibility Study and Preliminary Design for NJBL (Chinese and English versions), March 2005. 2. Feasibility Study and Preliminary Design for 3RR Phase I1(Chinese and Englishversions), March 2005. 3. Feasibility Study and Preliminary Design for KuiqiBridge(Chinese and Englishversions), March 2005. 4. Feasibility Study and Preliminary Design for Public Transport Component (Chinese and Englishversions), February 2005. 5. Feasibility Study for GIS, GPS, and M I S equipment (Chinese and English versions) March 2005. 6. Revised Proposal for the World Bank TA, March 2005. 7. Draft Environmental Impact Assessment Report for FuzhouNantai Peri-Urban Development Project (FNUDP), February 2005. 8. Draft Resettlement Action Planfor FNUDP, March 2005. 9. Fanchuanpu Cathedral Strengthening Plan (dated March 3,2005) submitted to Provincial Cultural Heritage Authorities for approval. 10. Guarantee from Fujian Provincial Finance Bureau, March 2005. 11. Commitment letters from domestic Banksto provide counterpart funds for the Bank-financed projects (detail). 12. Capital Investments in Fuzhou for 2002,2003 and2004. 13. Summary o f Fuzhou Mayor's meeting 2004,47 (dated December 15,2004) concerning the city's agreement to construct LingpuLu. 14. Memo from Fuzhou Water Conservancy Bureau concerning the possibility of changing the alignment o f the dyke and road at Fanchuanpu Cathedral dated August 5,2004. 15. Summary o f Fuzhou Mayor's meeting dated December 26,2004, regarding city's agreement to construct a full junction between the 3RR and the FuquanExpressway as part o f the Bank- financed project. 16. Estimated requirements and actual road maintenance budget for roads owned by Fuzhou Construction Bureau for the years 2001, 2002, 2003, and 2004. Estimated requirements for 2005. 17. Copy of 2002 Road Maintenance Budget estimate for roads owned by the Fuzhou Construction Bureau. 18. Data on Project Baseline Indicators, including calculation o f current travel times by bus and auto and 2010 estimates, estimates o f current andprojected 2010 populations inNantai Island, current estimates and 2010 projections o f value o f the manufacturing sector inNantai Island, current and 2010 projected modal splits for Fuzhou, current and 2010 projected bus routes and route-kilometers serving Nantai Island, and bus passengers inNantai Island. - 76 - 19. Draft procurement plan inChinese: contract packaging andtime schedule for each component, contract packaging for Jinshan depot. 20. Draft Procurement Manualand Project Implementation Plan (PIP) for road component. - 77 - Annex 13: Statement of Loansand Credits CHINA:FuzhouNantaiIsland Peri-UrbanDevelopmentProject Difference between expectedand actual Original Amount in US$ Millions disbursements ProjectID F Y Purpose IBRD I D A SF GEF Cancel. Undisb. Orig. Fm. Rev'd PO85333 2006 Cn-Fifth InlandWaterways 100.00 0.00 0.00 0.00 0.00 100.00 0.00 0.00 PO84742 2006 Cn-Iail Iii 200.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00 PO75732 2006 Cn-Shanghai Urban Apl2 180.00 0.00 0.00 0.00 0.00 180.00 3.33 0.00 PO57933 2005 Cn-Tai Basin Urban Envmt 61.00 0.00 0.00 0.00 0.00 51.09 2.66 0.00 PO67625 2005 Cn-Gef-Renewable Energy 0.00 0.00 0.00 40.22 0.00 40.22 -0.35 0.00 Scale-up Program PO67828 2005 CN-Renewable Energy Scale- 87.00 0.00 0.00 0.00 0.00 87.00 8.88 0.00 Up Program PO68752 2005 Cn-Inner Mongolia Highway & 100.00 0.00 0.00 0.00 0.00 99.50 4.50 0.00 Trade Corrid PO69862 2005 Cn -Agricultural Technology 100.00 0.00 0.00 0.00 0.00 99.50 5.17 0.00 Transfer PO71094 2005 Cn -Poor Rural Communities 100.00 0.00 0.00 0.00 0.00 100.00 12.60 0.00 Development PO72721 2005 Cn-Gef-HeatReform& Bldg 0.00 0.00 0.00 18.00 0.00 16.20 0.67 0.00 Egy Eff. PO75730 2005 Cn-Hunan Urban Dev 172.00 0.00 0.00 0.00 0.00 171.14 10.14 0.00 PO86505 2005 Cn-Ningbo Water & Envmt 130.00 0.00 0.00 0.00 0.00 123.85 -6.15 0.00 PO81161 2005 Cn-Chongqing Small Cities 180.00 0.00 0.00 0.00 0.00 180.00 0.00 0.00 PO81346 2005 Cn-Liuzhou Environment 100.00 0.00 0.00 0.00 0.00 100.00 1.70 0.00 Mgmt PO65035 2004 Cn-Gansu & Xinjiang Pastoral 66.21 0.00 0.00 0.00 0.00 50.72 11.30 0.00 Development PO65463 2004 Cn-Jiangxi IntegratedAgric. 100.00 0.00 0.00 0.00 0.00 93.44 20.56 0.00 Modem. PO66955 2004 Cn-ZhejiangUrbanEnvmt 133.00 0.00 0.00 0.00 0.00 121.82 2.40 0.00 PO84003 2004 Cn-Gef Guangdong PrdUrb 0.00 0.00 0.00 10.00 0.00 10.00 0.83 0.00 Env PO69852 2004 Cn-Wuhan Urban Transport 200.00 0.00 0.00 0.00 1.00 181.06 155.06 0.00 PO81749 2004 Cn-Hubei Shiman Highway 200.00 0.00 0.00 0.00 1.00 153.54 34.54 0.00 PO77137 2004 CN-4th InlandWaterways 91.00 0.00 0.00 0.00 0.46 88.09 8.21 7.71 PO73002 2004 CN-Basic EducationInWestern 100.00 0.00 0.00 0.00 0.00 80.61 44.I5 0.00 Areas PO77615 2004 Cn-Gef-Gansu & Xinjiang 0.00 0.00 0.00 10.50 0.00 9.11 4.17 0.00 Pastoral Develop PO75728 2004 Cn-GuangdongPrd Ur Envmt 128.00 0.00 0.00 0.00 0.64 117.24 1.02 0.00 PO75035 2004 Cn - Gef-Hai Basin Integr. Wat. 0.00 0.00 0.00 17.00 0.00 14.54 3.99 0.00 Env.Man. PO75602 2004 CN-2nd National Railways 200.00 0.00 0.00 0.00 1.00 128.55 -23.78 -24.78 (Zhe-Can Line) PO76714 2003 CN-2nd Anhui Hwy 250.00 0.00 0.00 0.00 0.00 190.20 39.87 0.00 PO58847 2003 CN-3rd Xinjiang Hwy Project 150.00 0.00 0.00 0.00 0.00 66.56 26.56 0.00 PO40599 2003 Cn-Tlanjin Urb Dev I1 150.00 0.00 0.00 0.00 0.00 134.80 16.98 0.00 - 78 - PO67337 2003 CN-2nd GEFEnergy 0.00 0.00 0.00 26.00 0.00 14.13 25.23 0.00 Conservation PO68058 2003 Cn-YixingPumpedStorage 145.00 0.00 0.00 0.00 0.00 127.54 17.58 0.00 Project PO70191 2003 Cn-ShanghaiUrb EnvmtApll 200.00 0.00 0.00 0.00 0.00 165.28 30.41 0.00 PO70441 2003 Cn-Hubei Xiaogan Xiangfan 250.00 0.00 0.00 0.00 0.00 61.88 -I1.45 0.00 Hwy PO68049 2002 CN-Hubei HydropowerDev In 105.00 0.00 0.00 0.00 0.00 45.68 20.35 0.00 Poor Areas Po71147 2002 Cn-TuberculosisControl 104.00 0.00 0.00 0.00 0.00 62.67 24.55 0.00 Project PO64729 2002 Cn-SustainableForestry 93.90 0.00 0.00 0.00 0.00 52.06 2 1.23 0.00 Development PO70459 2002 Cn-Inner Mongolia Hwy 100.00 0.00 0.00 0.00 0.00 50.09 10.76 0.00 Project PO60029 2002 Cn-Gef-Sustain.Forestry Dev 0.00 0.00 0.00 16.00 0.00 10.48 10.47 0.00 PO58846 2002 Cn-Natl Railway Project 160.00 0.00 0.00 0.00 0.00 23.68 20.35 0.00 PO56199 2001 CN-3rd InlandWaterways 100.00 0.00 0.00 0.00 0.00 47.17 16.00 0.00 PO56516 2001 Cn-Water Conservation 74.00 0.00 0.00 0.00 0.00 14.00 8.33 0.00 PO51859 2001 Cn-Liao River Basin 100.00 0.00 0.00 0.00 0.00 38.00 28,60 0.00 PO56596 2001 Cn-ShijiazhuangUrban 100.00 0.00 0.00 0.00 0.00 69.21 66.01 0.00 Transport PO45915 2001 Cn-UrumqiUrb Transpt 100.00 0.00 0.00 0.00 0.00 34.47 34.47 0.00 PO58845 2001 Cn-JiangxiIiHwy 200.00 0.00 0.00 0.00 54.77 30.05 46.49 0.00 PO47345 2001 Cn-Huai River Pollution 105.50 0.00 0.00 0.00 0.00 64.72 63.05 0.00 Control PO45910 2000 Cn-HebeiUrban Environment 150.00 0.00 0.00 0.00 0.00 69.74 44.74 0.00 PO49436 2000 Cn-ChongqingUrban Envmt 200.00 0.00 0.00 0.00 3.70 121.93 102.77 0.00 PO45264 2000 Cn-Smallholder Cattle 93.50 0.00 0.00 0.00 0.00 0.02 -0.28 0.00 Development PO64924 2000 Cn-Gef-BeijingEnvmt Ii 0.00 0.00 0.00 25.00 0.00 22.35 23.51 16.09 PO64730 2000 Cn-Yangtze Dike Strengthening 210.00 0.00 0.00 0.00 0.00 91.20 91.20 49.00 PO56424 2000 Cn-TongbaiPumpedStora 320.00 0.00 0.00 0.00 100.00 51.os 119.68 0.00 PO42109 2000 Cn-Beijing EnvironmentIi 349.00 0.00 0.00 25.00 0.00 244.11 216.19 0.00 PO58844 2000 Cn-HenanProvl Hwy 3 150.00 0.00 0.00 0.00 0.00 25.64 22.97 0.00 PO58843 2000 Cn-Guangxi Highway 200.00 0.00 0.00 0.00 19.70 25.41 35.78 0.00 PO43933 1999 Cn-SichuanUrbanEnvmt 150.00 2.00 0.00 0.00 0.00 65.20 57.16 49.39 PO42299 1999 Tec Coop Credit Iv 10.00 35.00 0.00 0.00 0.00 26.82 25.15 0.00 PO41890 1999 Cn-Liaoning UrbanTransport 150.00 0.00 0.00 0.00 0.00 1.43 1.43 -1.13 PO36953 1999 CN-HEALTH IX (Shiyong 10.00 50.00 0.00 0.00 0.40 22.55 21.79 8.00 Wang, Back-up) PO46564 1999 Cn - Gansu & Inner Mongolia 60.00 100.00 0.00 0.00 13.30 8.93 21.19 -9.66 Poverty Red. PO46829 1999 Cn-Renewable Energy 100.00 0.00 0.00 0.00 0.00 2.62 2.62 2.62 Development PO58308 1999 Cn-Pension Reform Pjt 0.00 5.00 0.00 0.00 0.00 0.42 0.40 0.00 PO57352 1999 Cn-Rural Water Iv 16.00 30.00 0.00 0.00 0.00 7.84 7.59 7.59 PO38121 1999 Cn-Gef-Renewable Energy 0.00 0.00 0.00 35.00 0.00 18.05 34.7 1 19.38 Development PO41268 1999 Cn-Nat Hwy4Hubei-Hunan 350.00 0.00 0.00 0.00 0.00 32.35 32.35 0.00 PO51888 1999 Cn - GuanzhongIrrigation 80.00 20.00 0.00 0.00 0.00 10.75 11.12 0.00 PO51856 I999 Accounting Reform& 27.40 5.60 0.00 0.00 0.00 12.60 12.53 0.00 Development PO51705 I999 Cn-Fujian IiHighway 200.00 0.00 0.00 0.00 0.00 35.41 35.41 3.39 - 79 - PO49665 1999 Cn-Anning Valley Ag.Dev 90.00 30.00 0.00 0.00 0.00 6.35 7.48 -5.85 PO03539 1998 Cn - Sustainable Coastal 100.00 0.00 0.00 0.00 2.06 36.92 38.98 10.77 Resources Dev. PO03566 1998 Cn-Basic Health (Hlth8) 0.00 85.00 0.00 0.00 0.00 19.36 17.01 0.00 PO03606 1998 Energy Conservation 63.00 0.00 0.00 22.00 0.00 17.29 14.77 0.00 PO03614 1998 Cn-GuangzhouCity Transport 200.00 0.00 0.00 0.00 20.00 82.81 102.81 8.64 PO03619 1998 CN-2nd InlandWaterways 123.00 0.00 0.00 0.00 37.00 6.03 43.03 6.03 PO35698 1998 Hunan Power Develop. 300.00 0.00 0.00 0.00 161.90 3.32 165.22 3.25 PO45788 1998 Cn-Tri-Provincial Hwy 230.00 0.00 0.00 0.00 0.00 9.63 9.63 0.00 PO36414 1998 Cn-Guangxi Urban Envmt 72.00 20.00 0.00 0.00 13.48 45.49 58.38 7.95 PO51736 1998 E. ChindJiangsu Pwr 250.00 0.00 0.00 0.00 86.00 19.95 105.95 18.28 PO40185 1998 Cn-Shandong Envronment 95.00 0.00 0.00 0.00 1.40 5.17 6.57 0.50 PO46952 1998 Cn -Forestry Development 100.00 100.00 0.00 0.00 0.00 6.42 -92.01 7.99 PO44485 1997 ShanghaiWaigaoqiao 400.00 0.00 0.00 0.00 0.00 49.56 49.56 49.56 PO03637 1997 Cn-Nat'l Rural Water 3 0.00 70.00 0.00 0.00 0.00 0.22 3.44 3.02 PO03650 1997 Tuoketuo PowerlInner 400.00 0.00 0.00 0.00 102.50 10.79 113.29 10.79 PO36405 1997 Cn - Wanjiazhai Water Tra 400.00 0.00 0.00 0.00 75.00 10.49 85.49 10.49 PO03594 1996 Cn - Gansu Hexi Corridor 60.00 90.00 0.00 0.00 0.00 53.25 53.63 8.19 PO34618 1996 Cn-Labor Market Dev. 10.00 20.00 0.00 0.00 0.00 1.58 3.68 0.00 PO03639 1995 Cn-Southwest Poverty 47.50 200.00 0.00 0.00 0.01 0.15 24.21 24.21 ReductionProject Total: 10,982.07 862.60 0.00 244.72 695.32 5,181.12 2,552.57 291.42 - 80- Statementofthe IFC's Held and DisbursedPortfolio (millions of U.S.dollars) Held Disbursed FY ApprovalCompany Loan Equity Quasi Partic Loan Equity Quasi Partic 2002 ASIMCO 0 I O 0 0 0 10 0 0 2003 Anjia 0 2 0 0 0 2 0 0 2005 BCCB 0 59.17 0 0 0 0 0 0 2003 BCIB 0 0 11.86 0 0 0 0 0 2005 Babei 0 5 0 0 0 5 0 0 Babei Necktie 11 0 0 6 0 0 0 0 1999 Bank of Shanghai 0 21.76 0 0 0 21.76 0 0 2000 Bank o f Shanghai 0 3.84 0 0 0 3.84 0 0 2002 Bank of Shanghai 0 24.67 0 0 0 24.67 0 0 2005 BioChina 0 3 0 0 0 0.15 0 0 2002 CDH China Fund 0 4.95 0 0 0 0 0 0 2005 CDH China I1 0 18 0 0 0 2.59 0 0 2003 CSMC 0 7.86 0 0 0 7.86 0 0 2005 CT Holdings 0 0 40 0 0 0 0 0 2004 CUNA Mutual 0 11.47 0 0 0 0.94 0 0 2005 Changyu Group 0 18.07 0 0 0 0.04 0 0 1998 Chengdu Huarong 4.48 3.2 0 4.69 4.48 3.2 0 4.69 1992 China Bicycles 4.5 0 0 0 4.5 0 0 0 2004 China Green Ener 20 0 0 0 11.5 0 0 0 2004 China I1 28 0 0 0 0 0 0 0 2004 China Re Life 0 0.27 0 0 0 0.27 0 0 1994 China WaldenMgt 0 0.01 0 0 0 0.01 0 0 2004 Colony China 0 16.07 0 0 0 4.6 0 0 2004 Colony China GP 0 0.84 0 0 0 0.22 0 0 2002 Darong I O 1.5 0 8 6.67 1.5 0 5.33 1994 Dynamic Fund 0 5.64 0 0 0 3.99 0 0 2005 FangXin SHMT 7.2 0 0 4.8 7.2 0 0 1.42 2005 Fang Xin Limited 0 5 0 0 0 5 0 0 2005 Fang Xin SHDX 1.8 0 0 1.2 0.6 0 0 0.12 2005 FangXin SZFX 1.2 0 0 0.8 1.2 0 0 0.24 2004 Fenglin 19 0 6 14 12.45 0 6 11.62 2005 Five Star 0 0 7 0 0 0 0 0 2003 Great Infotech 0 2.01 0 0 0 1.31 0 0 2005 HiSoft Tech 0 4 0 0 0 3 0 0 2002 Huarong AMC 9 2.51 0 0 9 0.49 0 0 2004 IB 0 52.18 0 0 0 52.18 0 0 2004 Jiangxi Chenming 60 12.9 0 0 40 12.9 0 0 2001 MaanshanCarbon 6.75 2 0 0 6.75 2 0 0 2005 Maanshan Carbon 11 1 0 0 5 0 0 0 2005 Minsheng 15.75 0 0 0 0 0 0 0 2001 Minsheng Bank 0 23.5 0 0 0 23.5 0 0 2005 Minsheng Bank 0 2.8 0 0 0 2.79 0 0 200 1 NCCB 0 26.58 0 0 0 26.46 0 0 - 81 - 1996 Nanjing Kumho 0 3.81 0 0 0 3.81 0 0 2004 Nanjing Kumho 34 2.23 0 0 34 2.23 0 0 2001 New China Life 0 5.83 0 0 0 5.83 0 0 2005 New Hope 0 0 45 0 0 0 0 0 1995 NewbridgeInv. 0 0.22 0 0 0 0.22 0 0 2005 NorthAndre 15 0 0 0 0 0 0 0 1997 Orient Finance 0 0 3.81 4.16 0 0 3.81 4.76 2003 PSAM 0 1.98 0 0 0 0 0 0 RAK China 13 0 0 0 5 . o 0 0 2003 SAIC 12 0 0 0 12 0 0 0 2000 SEAF SSIF 0 3.89 0 0 0 2.21 0 0 2004 SHCT 40 0 0 30 30.86 0 0 23.14 2004 SIBFI 0 0.08 0 0 0 0.08 0 0 1998 ShanghaiKrupp 22.75 0 0 47.24 22.75 0 0 47.24 1999 Shanxi 12.61 0 0 0 12.61 0 0 0 2002 Sino Gold 0 2.4 0 0 0 2.4 0 0 1995 SuzhouPVC 0 2.48 0 0 0 2.48 0 0 2006 VeriSilicon 0 1 0 0 0 1 0 0 Wanjie High-Tech 12.19 0 0 0 12.19 0 0 0 2004 Wumart 0 3.9 0 0 0 3.9 0 0 2003 XACB 0 20.31 0 0 0 3.25 0 0 2004 Xinao Gas 25 10 0 0 25 10 0 0 2003 Zhengye-ADC 15 0 0 7 11.59 0 0 5.41 2002 Zhong Chen 0 5 0 0 0 5 0 0 Total Portfolio: 411.23 414.93 113.67 128.49 275.35 264.68 9.81 103.97 ~~ ~~ ~ Approvals PendingCommitment Loan Equity Quasi Partic 2004 CCB-MSNPL 0 3 0 0 2004 Chenming LWC 0 0 0 155 2004 China Green 0 0 10 0 2006 Chinasoft 0 0 15 0 2002 HuarongAMC 15 0 0 0 2002 IEC 0 0 5 0 2005 MS Shipping 0 5 0 0 2004 NCFL 0 0 17.88 0 2003 Peak Pacific 2 0 10 0 0 2004 SIBFI 0.26 0 0 0 2002 SML 0 1 0 0 2002 Sino Mining 5 0 0 5 2006 TBK China 4 0 0 0 2002 ZhongChen 0 0 0 32 Total PendingCommitment: 24.26 19 47.88 192 - 82 - Annex 14: Country at a Glance CHINA:FuzhouNantaiIslandPeri-UrbanDevelopmentProject E a s t Lower. P O V E R T Y a n d S O C I A L A s i a 8 m l d d l e - C h i n a P a c i f i c I n c o m e D e v e l o p m e n t d i a m o n d . 2 0 0 4 Population, mid-year (millions) 1,296.5 1,870 2,430 GNI per capita (Atlas method, US$) 1,290 1,280 1,580 Life expectancy GNI (Atlas method, US$ billions) 1,672.5 2,389 3,647 A v e r a g e a n n u a l g r o w t h , 1998.04 Population (%J 0.7 0.9 1I) Labor force (%) 0.8 1.1 0.7 GNI Gross per primary M o s t r e c e n t e s t i m a t e ( l a t e s t y e a r a v a i l a b l e , 1 9 9 8 - 0 4 ) capita nrolIment aoverty (% of population below national poverty line) 5 Urban population (% of total population) 40 41 49 Life expectancy at birth (years) 71 70 70 J. Infant mortality (per 1,000 live births) 30 32 33 Child malnutrition (% of children under 5) 10 15 11 Access to improved water source Access to an improved water source (% ofpopulation) 77 7 8 81 Literacy (% ofpopulation age 15+) 91 90 90 Gross primary enrollment (% ofschool-age population) 115 113 114 =-Chin a Male 115 113 115 -Lower-middle-income group Female 115 112 1Q K E Y E C O N O M I C R A T I O S a n d L O N G - T E R M T R E N D S 1984 1 9 9 4 2003 2 0 0 4 E c o n o m i c r a t i o s ' GD P (US$ billions) 256.1 542.5 1,418.3 1,653.8 Gross capital formationiGDP 34.4 41.2 43.8 45.2 Exports of goods and services/GDP 113 25.3 34.2 39.7 Trade Sross domestic savings/GDP 34.5 42.7 42.5 44.9 - Gross national savings/GDP 35.3 42.7 43.2 46.1 Current account baiancelGDP 0.7 1.9 3.2 4.2 Interest payments1GDP 0.4 0.9 0.5 0.4 Total debt/GDP 4.7 18.5 13.6 10.7 Total debt service/exports 7.3 7.7 7.2 3.6 Present value of debtlGDP 13.3 Present value of debt/exports 36.4 indebtedness 1 9 8 4 - 9 4 1 9 9 4 - 0 4 2 0 0 3 2 0 0 4 2 0 0 4 - 0 8 (average annual growth) GDP 9.4 8.3 9.3 9.5 8.0 --China GDP per capita 7.9 7.4 8.6 8.9 7.3 -Lower-middle-income Exports of goods and services 8.1 17.3 26.8 28.4 14.4 group S T R U C T U R E o f t h e E C O N O M Y 1984 1 9 9 4 2003 2 0 0 4 G r o w t h o f c a p i t a l a n d G D P ( % ) (% of GDPJ hgriculture 32.0 20.2 14.6 15.2 1 nd us t ry 43.3 47.8 52.2 52.9 Manufacturing 35.5 34.4 36.7 37.3 Services 24.7 31.9 33.2 31.9 + Household final consumption expenditure 51.2 44.5 44.9 43.1 89 0 0 0 1 02 0 3 04 Senerai gov't final consumption expenditure 14.2 12.8 12.6 12.0 mports of goods and services 11.4 23.4 31.7 36.7 -GCF -GDP 140 I.: 1 9 8 4 - 9 4 1 9 9 4 - 0 4 2003 2 0 0 4 'average annual mowfh) G r o w t h o f e x p o r t s a n d I m p o r t s ( O h ) 4griculture 4.0 3.3 2.5 6.3 ndustry 123 10.0 12.7 11.1 30 Manufacturing 11.7 10.1 14.9 13.2 Services 9.8 8.2 7.3 8.3 iousehold final consumption expenditure 8.1 7.9 6.1 7.9 3eneral qov't final consumption expenditure 9.4 6.6 4.8 6.8 99 00 0 1 02 0 3 D4 3ross capital formation 9.1 9.5 18.9 13.0 -Exports -Imparts mports of goods and services 9.9 15.5 24.8 22.5 \late: 2004 data are preliminary estimates. ' The diamonds show four key indicators in the country (in bold) compared with its income-qroup average. if data are missi.nq, the diamond will IBRD 33943 100
Группа Всемирного банка · Project Appraisal Document
China - Fuzhou Nantai Island Peri-Urban Development Project
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