China - Shaanxi Provincial Highway Project

 Shaanxi provincial highway project Report No: ; Type: Report/Evaluation Memorandum ; Country: China; Region: East Asia And Pacific; Sector: Highways; Major Sector: Transportation; ProjectID: P003530 China: Shaanxi Provincial Highway Project (Loan 2952-CHA) The Implementation Completion Report (ICR) on the China Shaanxi Provincial Highway project (Loan 2952-CHA, approved in FY88) was prepared by the East Asia and Pacific Regional Office with the Borrower's contribution and reviewed by the Operations Evaluation Department (OED). The loan, for US$50 million, approved in March 1989, was fully disbursed and closed on schedule in December 1994. The project's objectives were to: (i) expand road transport capacity; (ii) repair flood-damaged roads and improve selected roads in one of China's less-developed regions in the center of the country; (iii) introduce modern road planning methods to guide investment decisions; and (iv) train staff and acquire equipment to transfer advanced technology to the subsector. The project consisted of: (i) construction of a new highway between Sanyuan and Tongchuan, an important industrial center north of the ancient Chinese capital city of Xi'an, and associated consulting services in supervision and quality control; (ii) expansion, improvement and repair of the rural road network in less- developed southern Shaanxi; (iii) preparation of a program for pavement strengthening, betterment and maintenance; (iv) assistance to the Shaanxi Provincial Transport Department (SPTD) for preparing a computerized road data bank; and (v) staff training. The project's objectives were achieved. Substantial design changes were made to the Sanyuan-Tongchuan highway because of (i) archeological findings on the alignment during construction; (ii) environmental protection; and (iii) conversion of the planned "free" road into an accesscontrolled, tolled motorway. Consequently, civil works costs were increased by 63 percent; additional factors for the increased costs were the lack of experience in conducting location studies for roads traversing multiple jurisdictions, and the rudimentary nature of the contractor market. Nonetheless, all the civil works were completed with generally satisfactory quality and in accordance with the Bank's guidelines for environmental protection and resettlement. The economic rates of return (ERR) of the main subprojectsranging from 16 to 28 percent at appraisal-were re-estimated from 18 to 41 percent in the ICR primarily because the actual traffic volumes were higher than the SAR forecasts. The tolls introduced on the new highway resulted in lower than predicted traffic volumes and reduced the ERR of this subproject from 28 to 18 percent. The objectives for institutional development were moderate but appropriate. The road data bank, pavement system and road program preparation activities were combined and, furthermore, integrated nationally to develop a compatible system for several provinces. This work, coordinated by the Ministry of Communication (MOC) in Beijing, covered 15 provinces and municipalities. Currently, the road data bank/pavement management system acquired under the loan, is operational in five of the provinces, including Shaanxi. However, more effort and budgetary support are needed to make them acceptable as management tools and to extend their use to the entire provincial network. Staff training was also coordinated by MOC and the training program provided SPTD staff with both immediate and long term benefits. OED rates the project's outcome as satisfactory, institutional development impact as moderate, and sustainability as likely. Bank performance is rated as satisfactory. These ratings are consistent with those in the ICR. The most important lesson of experience from this project is the significance of pre-engineering work-planning, environmental assessment, resettlement, coordination between multiple jurisdictions and the highway administration- in order to avoid disruptions, delays and unexpected cost escalation during project execution. The ICR is of satisfactory quality. It provides a thorough account of the problems and accomplishments of the project. The project may be audited together with other transport projects in China.