China - Liaoning Medium Cities Infrastructure Project

Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC2170 Date ISDS Prepared/Updated: 02/16/2006 I. BASIC INFORMATION A. Basic Project Data Country: China Project ID: P099992 Project Name: China-Liaoning Medium Cities Infrastructure Project Task Team Leader: Shomik Raj Mehndiratta Estimated Appraisal Date: March 21, 2006 Estimated Board Date: June 27, 2006 Managing Unit: EASTR Lending Instrument: Specific Investment Loan Sector: General transportation sector (100%) Theme: Other urban development (P) IBRD Amount (US$m.): 200.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 200.00 200.00 B. Project Objectives [from section 2 of PCN] The overall development objective of the proposed Liaoning Medium Cities Urban Infrastructure Project (LMC) is to contribute to the economic revitalization of medium-sized cities in Liaoning through the provision of infrastructure and improved urban management. The objectives of the urban transport part of the project are to relieve existing transportation bottlenecks, improve the quality of the overall urban transport network and to build capacity for urban transport planning and implementation in a fiscally, socially and environmentally sustainable manner. The objectives of the urban environment part of the project are to improve the service levels in water supply, wastewater, and solid waste in existing urban areas through the provision of infrastructure and enhancement of utility performance. The project will also aim to improve to overall urban management, with a special emphasis on municipal financial management and utility regulation. C. Project Description [from section 3 of PCN] Part 1: Urban Environment: At present the estimated costs for the urban environment component are approximately US$350 million, with around US$190 in IBRD financing. Sector issues related to urban environment part are presented in Annex 1. Components include: Page 2 A. Water Pollution Control Infrastructure (US$168 million): Construction of wastewater collection systems, treatment plants, and water reuse facilities in the following cities: Fushun, Tieling, Yingkou, and Panjin. B. Water Supply Infrastructure (US$98 million): Rehabilitation of water distribution systems and upgrading of water treatment plants in the following cities: Fushun, Liaoyang, Anshan, Haicheng, Xincheng, and Tieling. C. Solid Waste Management Infrastructure (US$65 million): Development of solid waste collection, transfer, and landfill facilities in the following cities: Fushun, Liaoyang, Xincheng, Yingkou, Huludao, and Panjin. The component also includes closures of existing landfills that pose environmental risks. D. Urban Environment Capacity-Building (US$12.5 million): Technical assistance will be provided for the following activities: a) design review and advisory Services; b) Fushun water supply master plan; iii) pilot pollution control projects and d) small city environmental planning and feasibility study preparation. The World Bank is working with Liaoning Province to prepare a US$5.0 million GEF grant to support the urban environment component of LMC under the GEF-World Bank Partnership Investment Fund for Pollution Reduction in the Large Marine Ecosystems of East Asia. Part 2: Urban Transport: At present the estimated costs for the urban transport component are approximately US$335 million, with about US$145 million in IBRD financing. Sector issues related to urban transport part are presented in Annex 2. Project cities include Fushun, Liaoyang, Panjin, and Jinzhou with the following components: A. Road infrastructure investment (US$270 million): targets arterial road improvements that relieve existing bottlenecks and in a few selected cases support strategic urban expansions. B. Secondary road improvement and maintenance (US$40 million): targets improvements in the secondary road networks of the project cities to (i) relieve the pressure of local traffic off the major road network, and to (ii) enhance "last mile" access for pedestrians and bicyclists. C. Traffic management and safety ($17 million) focuses on supporting the implementation of the road safety law with enhanced traffic management monitoring and control systems and investments in traffic management equipment (traffic signals etc.) and intersection improvements (junction channelization etc.) to improvement traffic flow and safety. D. Public transport (US$5 million) that includes provision of bus priority facilities and improvements in public transport planning and operations; and E. Transportation Capacity Building (US$5 million) transport planning practices, safety monitoring and policy, traffic management practices, road maintenance planning and Page 3 implementation practices, and public transport planning and reform to promote provision of bus services by the non-government sector. Part 3: Municipal and Utility Institutional Development: A. Municipal Financial Management Capacity Building (US$5 million) to support improvements in analysis of expenditures and revenue structures, capital planning, financial forecasting, financing options, etc. The activities will target the LMC cities in partnership with provincial government. B. Utility Capacity Building and Regulation (US$5 million) to improve the management capacities of water, wastewater, and solid waste utilities, and develop the provincial level price and service regulatory oversight system and capabilities. The activities will target the LMC cities in partnership with provincial government. D. Project location (if known) Liaoning was one of the first provinces in China to industrialize, first in the early 20th century, and then even more in the 1950s and 1960s. The city of Anshan, for example, is home to one of the largest iron and steel complexes in China. In recent years this early focus on heavy industry has become a liability, as many of the large state-run enterprises have experienced economic difficulties. Recognizing the special difficulties faced by Liaoning and other provinces in Northeast China because of their heritage of heavy industry, the Chinese central government recently launched a "Revitalize the Northeast Campaign". Main agricultural products of Liaoning include maize, Chinese sorghum, cotton, and soybeans. The region around Dalian produces 3/4 of China's exported apples and peaches. Liaoning has the most iron, magnesite, diamond and boron deposits among all provinces in China. Liaoning is also an important source of petroleum and natural gas. Salt is produced along the coast. Liaoning is one of China's most important industrial bases, covering a wide range of industries, such as machinery, electronics, metal refining, petroleum, chemical industries, construction materials, coal, and so on. In recent years, the city of Dalian has, in particular, been developed as a major port and the economic gateway to all of Northeast China. In 2003, Liaoning's GDP was about 72.5 billion USD --ranking 8th in the PRC. The per capita income is 14,000 RMB, or US$1,700. The main population centers of Liaoing are located in Liao River Basin or are located along the coast of the Bohai Sea. The Bohai Sea is the largest semi-enclosed sea in the People's Republic of China and is surrounded by the provinces of Liaoning, Hebei, Shandong, and Tianjin Municipality, and is connected to the Yellow Sea Large Marine Ecosystem (LME). The Bohai Sea has a unique shallow marine eco-system and rich coastal wetlands which provide reproduction and nursery grounds for fish, shrimp, crab, and migratory birds. The Bohai Sea is also the most important center of shellfish aquaculture in China. It is, however, under severe stress due to land-based pollutants, over-fishing, and wetland degradation. Liaoning Province, with a population of 42 million people and an economy based primarily on heavy industry, is a major contributor to pollution and wetland loss in the Bohai Sea area. The Province, with the assistance of the European Union, completed the "Liao River Basin Plan" in 2002. The Plan Page 4 establishes the waterpollution control priorities for the basin and pollution reduction into the Bohai Sea and forms the analytical framework for pollution control activities under the project. The project cities under LMC and their populations are listed below. Information on the two largest cities, Shenyang and Dalian are also presented for reference. Over the last decade, the Bank has been actively supporting infrastructure development in Liaoning, with four urban infrastructure projects. About forty percent of the Bank financing has gone to support water supply and transport in Shenyang and wastewater in Dalian, and the balance has been to support urban transport, water supply, and wastewater subprojects in medium-sized cities. World Bank support in the urban transport field has focused on alleviating transportation bottlenecks through road construction, improving road maintenance, enhancing traffic management, and increasing the efficiency and effectiveness of public transport. Bank interventions in the urban environment sector originally concentrated on water supply provision, and then later on wastewater management. Water pollution control efforts have been set in the context of improving environmental conditions in the Liao River Basin and reducing pollution into the Bohai Sea. E. Borrower