China - Tri-Provincial Highway Project

Document of The World Bank Report No.: 17870-CHA PROJECT APPRAISAL DOCUMENT ONA PROPOSED LOAN IN THE AMOUNT OF US$ 230 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A TRI-PROVINCIAL HIGHWAY PROJECT May 29, 1998 Transport Sector Unit East Asia and the Pacific Region  CURRENCY EQUIVALENTS (Exchange Rate Effective February 1998) Currency Unit RMB RMB1 US$0.12 US$1 RMB8.3 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS 8FYP - Eighth Five Year Plan (1991 1995) LA&R - Land Acquisition and Resettlement 9FYP - Ninth Five Year Plan (1996 2000) LZE - Liughouhe-Zhonghe Expressway in Gansu 1 OFYP - Tenth Five Year Plan (2001 2005) MOC - Ministry of Communications BDH - Baotou-Dongsheng Highway in Inner Mongolia MOF - Ministry of Finance BFH - Baiyinchagan-Fengzhen Highway in Inner MTE - Medium truck equivalent Mongolia BOT - Build-operate-transfer NCB - National Cornpetitive Bidding CAS - Country Assistance Strategy NCD - Ningxia Communications Department E&M - Electrical, electronic and mechanical NTHS - National Trunk Highway System EA - Environmental Assessment PAD - Project Appraisal Document EAP - Environmental Action Plan PCD - Provincial Communications Department EIA - Environmental Impact Assessment PCU - Passenger car unit ENPV - Estimated net present value PEO Project Execution Office ERR - Economic Rate of Retum PSB - Public Security Bureau ES - Executive Summary (Environmental Report) RAP *- Resettlement Action Plan GNP - Gross national product RIPA Roads Improvement for Poverty Alleviation GOVAI - Gross output value of agriculture and industry RMC - Resident Mission China GPCD - Gansu Provincial Communications Department RMF - Road maintenance fee GWH - Guyoazi-Wangquanliang Highway in Ningxia SAA - State Audit Administration ICB - Intemational Competitive Bidding SOE - Statement of Expenditures IEE - Initial Environmental Evaluation SPC - State Planning Commission IMAR - Inner Mongolia Autonomous Region XJH - Xujiamo-Jiepaicun Highway in Gansu IMCD - Inner Mongolia Communications Department YXH - Yanchi-Xingren Highway in Ningxia IST - Institutional Strengthening and Training Vice President: Jean-Michel Severino Country Director: Yukon Huang Sector Manager: Jeffrey Gutman Task Manager: Hatim Hajj  CHINA Tri-Provincial Highway Project CONTENTS Page No. Block 1:Project Description ....................................................................2 1. Project Development Objective and Key Performance Indicators ............... ....................2 2. Project Components ....................................................................2 3. Benefits and Target Population ......................... ........................................... 6 4. Institutional and Implementation Arrangements .............................................................. 7 Block 2: Project Rationale ................................................................... 9 5. CAS Objectives Supported by the Project .................................................................... 9 6. Main Sector Issues and Government Strategy ..................................................................9 7. Sector Issues to be Addressed by the Project and Strategic Choices . ............................. 10 8. Project Alternatives Considered and Reasons for Rejection ................... ....................... 10 9. Major Related Projects Financed by the Bank and/or Other Development Agencies . 11 10. Lessons Learned and Reflected in Proposed Project Design ................. ........................ 12 11. Indications of Borrower Commitment and Ownership ................... ............................... 12 12. Value Added of Bank Support ............................ ....................................... 13 Block 3: Summary Project Assessments .................................. ................................. 13 13. Economic ................................................................... 13 14. Financial ................................................................... 14 15. Technical ................................................................... 14 16. Institutional ................................................................... 14 17. Social ................................................................... 15 18. Environmental ................................................................... 17 19. Participatory Approach ................................................................... 18 20. Sustainability ................................................................... 19 21. Critical Risks ................................................................... 20 22. Possible Controversial Aspects ............................ ....................................... 21 Block 4: Main Loan Conditions ................................................................... 21 23. Agreement Reached with the Government ................................................................... 21 24. Agreement Reached with the Beneficiary ................................................................... 21 25. Readiness for Implementation ........................ ........................................... 22 Block 5: Compliance with Bank Policies .................................. ................................. 23  Page No. Annexes Annex 1. Project Design Summary ...................................... 24 Annex 2. Detailed Description of Main Highways ............. ......................... 33 Annex 3. Roads Improvement for Poverty Alleviation (RIPA) ...................................... 36 Annex 4. Institutional Strengthening and Training ............. ......................... 42 Annex 5. Highway Safety Improvement ...................................... 44 Annex 6. Estimated Project Costs ...................................... 54 Annex 7. Financing Plan ...................................... 58 Annex 8. Implementation Program ...................................... 60 Annex 9. Economic and Financial Evaluation ...................................... 654 Annex 10. Procurement and Disbursement Arrangements .......................... ............ 69 Annex 11. Socio-economic Surveys ......................................8 10 Annex 12. Resettlement Action Plans ...................................... 85 Annex 13. Environmental Assessment and Action Plan Summary .................................... 90 Annex 14. Project Processing Budget and Schedule ............... ....................... I00 Annex 15. Documents in the Project File ...................................... 101 Annex 16. Statement of Loans and Credits ...................................... 103 Annex 17. Country at a Glance ...................................... 106 MAPS 1. China, Major Highway Development Program, IBRD 29472 2. Inner Mongolia Transport System, IBRD 29473 3. Inner Mongolia, Baotou-Dongsheng and Baiyinchagan-Fengzhen Highways, IBRD 29474 4. Gansu, Transport System, IBRD 29475 5. Gansu, Liugouhe-Zhonghe Expressway and Xujiamo-Jiepaicun Highway, IBRD 29476 6. Ningxia Transport System and Guyaozi-Wangquanliang and Yanchi-Xingren Highways, IBRD 2947  Project Appraisal Document China Tri-Provincial Highway Project Date: May29, 1998 [] Draft [X] Fina I Task Manager: Hatim Hajj Sector Manager: Jeffrey S. Gutman Project ID: CN-PE-45788 Sector: Transportation Lending Instrument: SIL PTI: [ ] Yes [X] No [1 Project Financing Data [X] Loan [ ] Credit [] Guarantee [] Other [Specify] For Loans/Credits/Others: Amount (US$m): 230.0 Proposed Terms: [] Multicurrency [X] Single currency (US$) LIBOR- based Grace period (years): 5 [] Standard Variable [] Fixed- [] Years to maturity: 20 Commitment fee: 0.75% Service charge: n.a.% Financing plan (US$m): Source Local Foreign Total Government 419.3 9.4 428.7 Cofinanciers IBRD/IDA 230.0 230.0 Other (specify) Other (specify) TOTAL 419.3 239.4 658.7 Borrower: Peoples' Republic of China (Ministry of Finance) Guarantor: Responsible agency(ies): Inner Mongolia Autonomous Region (Communications Department), Gansu Province (Communications Department), Ningxia Hui Autonomous Region (Communications Department) Estimated disbursements 1999 2000 2001 2002 2003 2004 2005 (Bank FY/US$M): Annual 27.6 48.3 55.2 46.0 27.6 20.7 4.6 Cumulative 27.6 75.9 131.1 177.1 204.7 225.4 230.0 Expected effectiveness date: November, 1998 Closing date: June 30, 2005  Project Appraisal Document Page 2 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Block 1: Project Description 1. Project development objectives (see Annex 1 for key performance indicators): The proposed project would have the following objectives: (a) to increase efficiency and safety of transport in one or two highway priority corridors in each of the provinces of Inner Mongolia Autonomous Region, Gransu and Ningxia Hui Autonomous Region. This objective would be achieved through the construction of new highways and/or improvement of existing highways in these corridors in order to facilitate faster socio- economic development in these land-locked provinces. Achievement of this primary objective would be evaluated based on average travel speeds, daily traffic volumes, and traffic accident rates on the proposed and existing highways in each corridor, (b) to provide improved access to targeted poor counties in each of the three provinces. The three provinces have about 7.2 million poor people (14% of the population) which represent about 10% of the total poor population in China. The three provinces account for 4.3% of the total population of China and have a gross domestic product per capita of about 62% of the national average. Progress toward this objective will be monitored through daily traffic volumes on improved roads and a reduction in the number of days roads are closed to traffic. Other objectives include: promoting development of institutional capacities in each of the three provinces in the areas of highway planning, design, supervision, operation and maintenance of the highway network. This would be achieved through provision of modem equipment and training of staff within China and abroad. Progress toward this objective will be measured and monitored based on: provision of new equipment and number of person-months of training in the various areas. The project also aims to help increase safety of road transport. This objective will be achieved through establishment of a coordination mechanism between the highway departments and the traffic police, analyses of traffic data, and developmnent and implementation of a pilot program for treatment of traffic accident black spots. Achievement of this objective would be evaluated based on reductions in the number of fatalities and injuries per year. 2. Project components (see Annex 2 for a detailed description of the main highways; Annex 3 for the road improvement program for poverty alleviation (RIPA); Annex 4 for the details of the institutional strengthening and training component (IST); Annex 5 for the highway safety component; Annex 6 for a detailed cost breakdown and Annex 7 for a detailed financing plan). The proposed project would include: (a) Construction of Main Highways with a total length of about 687 km comprising: Baotou-Dongsheng Highway (103 km) of which 92 km are 4-lane Class 1 highway and 11 km are 2-lane Class 2 highway and Baiyinchagan-Fengzhen 2 -lane Class 2 Highway (142km) in Inner Mongolia; Liugouhe-Zhonghe 4- lane expressway (33.5 km) and Xujiamo-Jiepaicun 2-lane Class 2 Highway (64 km) in Gansu; and Guyaozi- Wangquanliang Highway (94.0 km of which about 83km provide two lanes for traffic movement on a 4-lane Class I Highway subgrade and about l1km are 2-lane Class 2 Highway) and Yanchi-Xingren 2-lane Class 2 Highway (250.5 km) in Ningxia. (b) Construction and Improvement of about 1892 km of Rural Roads in poor counties of which 836km ate in Inner Mongolia, 803km in Gansu, and 253km in Ningxia. (c) A program for strengthening of institutions in each province in the areas of highway planning, design, supervision, construction, operation and maintenance. (d) A highway safety program to help reduce traffic accidents on highways. Main Highways Description of the main highways (listed above) as well as the supervision of their construction is presented in Annex 2. Besides construction of the main roads, included are the construction of linking roads, traffic safety facilities such as traffic signs and pavement markings, guard rails and fences on both sides of the high-grade highways. Also, these roads include construction of buildings and sheds for management and maintenance of the highways, facilities for toll stations and service areas; power, lighting, tolling, telecommunications and traffic monitoring systems. In order for the Liugouhe-Zhonghe Expressway (LZE) to realize its economic benefits and better serve Lanzhou (the capital of Gansu) it is essential that the linking roa.d at Tianshuilu interchange be constructed and properly tied to the Lanzhou street network. This means that besides the 1.3km of the link included in the project, another 1.8km extension to the south should be constructed. The municipality of Lanzhou gave its written commitment to the Bank that it would construct this link using its own funds and would complete it before LZE is finished  Project Appraisal Document Page 3 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Component Category Cost Incl. % of Bank % of Bank Contingencies Total Financing Financing (US$M) (US$M) A. Inner Mongolia Province 1. Construction of New Main Roads Physical 222.0 87.2 75.6 94.4 a) Baotou-Dongsheng Hwy (103km) 175.4 60.1 b) Baiyinchagan-Fengzhen 2-lane Class 2 Hwy 46.6 15.5 (142km) 2. Construction and Improvement of about 836 Physical 19.0 7.4 km of rural roads in poor counties 3. Program for strengthening of institutions in the Institutio 12.7 5.0 4.2 5.3 areas of highway planning, design, supervision, n-Building construction, operation and maintenance 4. Highway Safety Program Policy- 1.0 0.4 0.2 0.3 Physical Subtotal for Inner Mongolia 254.7 100.0 80.0 100.0 B. Gansu Province 1. Construction of New Main Roads Physical 216.8 85.5 90.3 90.3 a) Liugouhe-Zhonghe 4-lane Expressway 145.5 60.7 (33.5km long bypass to Laonzhou). b) Xujiamo-Jiepaicun 2-lane Class 2 Auto- 71.3 29.6 Only Hwy (64km) 2. Construction and Improvement of about 803km Physical 22.7 9.0 of rural roads in poor counties. 3. Program for strengthening of institutions in the Institutio 13.0 5.1 9.5 9.5 areas of highway planning, design, supervision, n-Building construction, operation and maintenance. 4. Highway Safety Program Policy 1.0 0.4 0.2 0.2 Physical Subtotal for Gansu 253.5 100.0 100.0 100.0 C. Ningxia Province 1. Construction on new right-of-way and/or Physical 135.8 90.2 45.6 91.2 improvement of Main Roads. a) Guyaozi-Wangquanliang Hwy (94.0 km) Physical 90.5 30.5 b) Yanchi-Xingren ordinary Class 2 Hwy 45.3 15.1 (250.5km) 2. Construction and improvement of about 253km Physical 7.2 4.8 of rural roads in poor counties 3. Program for Strengthening of institutions in the Institutio 7.0 4.7 4.2 8.4 areas of highway planning, design, supervision, n-Building construction, operation and maintenance 4. Highway Safety Program Policy- 0.5 0.3 0.2 0.4 physical Subtotal of Ningxia 150.5 100.0 50.0 100.0 D. Three Provinces I. Construction of 6 main highways (687km) Physical 574.6 87.2 211.5 91.9 2. Construction and Improvement of about Physical 48.9 7.4 1892km of rural roads in poor counties. 3. Program for strengthening of institutions in the Institutio 32.7 5.0 17.9 7.8 areas of highway planning, design, supervision, n-Building construction, operation and maintenance. 4. Highway Safety Program Policy- 2.5 0.4 0.6 0.3 Physical ___ ____ TOTAL FOR 3 PROVINCES 658.7 100.0 230.0 100.0  Project Appraisal Document Page 4 Country: China Project Title: Tn-Provincial Highway Project (CN-PE45788) The Central Government and the Provincial governments attach great importance to the construction of these highways. They serve high priority corridors containing a significant part of the population and economic activity in each province. The Baotou-Dongsheng Highway serves Baotou (the largest and main industrial city in Inner Mongolia) as well as mineral extraction (mainly rare earth and coal) along the corridor and the very large Dalad power plant. The Baiyinchagan-Fengzhen Highway serves one of the poorest areas in Inner Mongolia and constitutes an important segment of the national trunk highway (no.208) extending from Erlian in Inner Mongolia in the north to Taiyuan (Shanxi Province), Xian (Shaanxi Province), Chengdu (Sichuan Province), Kunming (Yunnan Province) and Hekou in Yunnan Province. The Liugouhe-Zhonghe Expressway and the Xujiamo-Jiepaicun Highway form an important section of the east-west national trunk highway (no.310 and 312) extending for about 5000 km from Lianyungang port on the East China Sea in the east to Huoergousi at the border with Kazhakhastan in the west. The Liugouhe-Zhonghe Expressway serves as a bypass to Lanzhou and forms an important link of the road connecting Lanzhou to its airport, about 70 kms to the west. The Guyaozi-Wangquanliang Highway is an extension of the recently completed Class 1 Highway from Yinchuan (the capital of Ningxia) to Guyaozi to the east. It is a part of National trunk highway extending from Yinchuan to Taiyuan, Jinan and the port of Qingdao (Shandong Province) in the east on the East China Sea. It serves the rich coal and petroleum resources in the east of Ningxia. The other highway in Ningxia (Yanchi-Xingren) lies in an important east-west corridor and its improvement is essential for the development of the poor rural areas along it. Road Improvement Program for Poverty Alleviation (RIPA) The primary objective of the RIPA component is to help alleviate poverty, in each of the three provinces, by providing and improving all-weather access to the rural population in the poor counties. Experience with other Bank-financed projects in China, (Shaanxi and Henan), indicates that provision of basic access through all-weather roads and provision of non-motorized transport are contributing factors to reducing poverty in rural areas. These provinces are land-locked, sparsely populated (which increases the cost of providing infrastructure facilities), and relatively poor. Agriculture/livestock/forestry and mineral extraction are the main resources in these provinces. The gross domestic product per capita in the three provinces is about 62% of the national average. The three provinces have about 7.2 million poor people of which 2.5 million are in Inner Mongolia, 4.0 million in Gansu and 0.7 million in Ningxia. Lack of transport infrastructure is one of the factors contributing to the depressed economic conditions in these provinces (Annex 3). The roads to be included in the RIPA component for each province were based on a series of screenings. The first dealt with selection of poor counties, the second focused on types of roads to be chosen, the third centered on highway system continuity, the fourth was based on criteria of cost effectiveness of providing road access, and the fifth on economic and social evaluation of the various highway systems. Inner Mongolia has 50 counties and banners designated as poor, Ningxia has 11 such counties and Gansu has 49 counties. Sixteen of these poor counties were selected in Inner Mongolia, 5 in Ningxia and :23 in Gansu for provision of rural roads under the project because they are some of the poorest counties and to reflect the priorities of the provinces in conjunction with their five-year development plans (1996-2000) and their eighth 7-year plan for poverty alleviation (1994-2000). The roads to be considered for inclusion in RIPA are primarily lower level roads (Class 4 or lower) with priority given to low-cost new construction or upgrading of existing roads. The road segments were combined into systems based upon groupings of administrative villages and townships and connections to the prefectural/provincial highway system. Cost effectiveness relates to the cost of each system per person in the area of influence. The economic and social analyses for the RIPA systems are presented under other sections of this PAD. The agreed RIPA component consists of about 1892 km of which 836 km are in Inner Mongolia, 253 km in Ningxia and 803 km in Gansu. The total cost of this system is about Y390 million, of which Y157 million are for Inner Mongolia, Y60 million are for Ningxia and Y173 million are for Gansu. RIPA in each province will be implemented through annual packages, each consisting of few road systems. The first annual package was fully prepared by each province and found satisfactory by the Bank from technical, economic, social, environmental and resettlement points of view. Packages for 1999 and 2000 would include  Project Appraisal Document Page 5 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) an economic and social benefit analyses including evidence that each of the proposed systems meets the agreed ERR criteria, technical analyses, including proposed works and estimated costs; environmental analyses for each system in accordance with the stipulations of Annex 13, and a resettlement action plan in accordance with the provisions of Annex 12. Each package submitted for approval will also include an implementation plan, a plan for supervision of construction and a maintenance plan. The provinces have the required staff, management, organization, and know-how to plan, design, supervise and maintain the RIPA systems. Institutional Strengthening/Training The objective of this component is to strengthen, through in-country training, training and study abroad, as well as the provision of critical and technically appropriate equipment, the capacity of the three departments (GPCD, IMCD and NCD) to plan, construct, operate and maintain the proposed highways to be financed under this project. In the light of their rapidly expanding investment and maintenance program, their capacity to operate and maintain the current provincial road and highway system will also be strengthened. Because of the specific needs of each province, the priority areas to be addressed differ somewhat for each. However, the common areas include: highway engineering, highway and equipment maintenance, financial management, and the operations and management of high-grade highways. The component also strengthens the provinces' institutional capabilities to train qualified technical and supervisory personnel for the maintenance of their respective highway networks. Additional training and equipment for environmental protection, highway safety, and RIPA (not included in Gansu) are incorporated in this component. The specific institutions in each province which will benefit from the provision of training and equipment are included in Table 1 of Annex 4 this document. The total cost of the combined Institutional Strengthening and Training component is Y76.7 million, of which Y24.2 million is in foreign currencies. (i) Inner Mongolia: Investment for this component is about Y45.6 million (of which Y1 1.6 million is in foreign currencies). Training accounts for Y13.5 million and equipment Y32.1 million. The priority areas for strengthening include Expressway Construction Supervision, Operations Management (including toll collection); techniques of Highway Survey and Design adapted to the Inner Mongolia topography; Road maintenance; and Strengthening of the Communications Technical School. As shown in Table 2 of Annex 4 a total of 418 personnel (622 persons/months) will be trained: within Inner Mongolia (122 p/ni); in other training institutions in China (360 p/m); in institutions abroad (99 p/m) and in Short Study Tours Abroad (41 p/m). (ii) Gansu: investment for this component totals RMB Y17.4 million (of which RMB Y9.5 million is in foreign currencies). Training accounts for 8.4 million and equipment Y9.0 million. The priority areas for strengthening include Highway and Bridge Engineering, Engineering Supervision, Highway Maintenance and Management; Traffic Engineering; and a strengthening of the Provincial Communications School. A total of 450 staff (537 person/months) will be undergoing training: 333 person/months within Gansu province, 111 p/m in other parts of China, 52 p/m for training abroad and 41 p/m for short-term study tours. (iii) Ningxia: Investment for this component totals Y13.8 million (of which Y4.2 million is in foreign currencies). Training accounts for Y7.1 million and equipment Y6.7 million. The priority areas for strengthening include Expressway Construction Supervision, Operations and Management; Highway and Bridge Engineering Survey and Design; Highway Maintenance and Strengthening of the Communications Technical School. A total of 1130 personnel (970 persons/months) will be trained: within Ningxia (710 p/m); in other training institutions in China (204 p/m); in institutions abroad (21 p/m) and in Short Study Tours abroad (35 p/rn). The IST report submitted by each province is available in the project files. Highway Safety The traffic safety situation in Gansu, Inner Mongolia and Ningxia Hui Autonomous Region (as in other provinces in China) is serious. During the past few years almost 3,000 persons per year were killed by traffic accidents in these provinces. The number killed per 100,000 persons is not high and is comparable with rates of developed nations, but the number killed per 10,000 vehicles is very high and is at least 10 times higher than the rate of Western Europe and North American countries. Also, the severity rate (defined as the number killed divided by the number of killed and injured) is high. This situation is expected to get worse unless some appropriate actions are taken because of the fast pace of increase in vehicles and because  Project Appraisal Document Page 6 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) China is in the early stages of motorization. Due to the alarming safety situation, the Bank engaged the services of a safety expert under the Finnish Trust Funds. The expert visited all three provinces, studied the topic, identified the problems and developed a modest program to improve highway safety for inclusion in this project (Annex 5). The main components of this program are: (a) Establishment of a high-level, traffic coordination group to coordinate between the Communication Department and the Traffic Police (the two main agencies responsible for highway safety) in each province as well as a traffic safety Secretariat to prepare the work for the coordination group. (b) Analyses and summary of highway traffic accidents during the past three years for which data is available to determine the main factors contributing to accidents and to identify priority areas for future actions. In addition, Inner Mongolia will conduct a study of the effects of different highway design features on highway accidents. The terms of reference for these studies are available in the project file. (c) Identification, design and carrying out a pilot program of accident black spot improvements together with provision of the required equipment, training of local staff and traffic safety expertise. The three provinces agreed to use the same international expert(s) for this task to achieve better coordination and reduce costs. The total effort by international expert(s) is 4.5 person-months, or 1.5 person-month per province. Each province agreed to allocate the necessary funds for this element (about Y5.1 million in Gansu, Y4.8 million in Inner Mongolia and Y2.1 million in Ningxia). A total of about 60 spots in all three provinces will be improved. (d) Development of three highway safety manuals. Gansu will be responsible for the highway Maintenance Safety Manual, Inner Mongolia for the Highway Design Safety Manual and Ningxia for the Highway Construction Manual. The three provinces will cooperate in the development of these manuals and will use Chinese and international experts in this exercise. A total of 3 person-months of international expertise would be needed (or I person-month per province). (e) Development of Safety Audit Procedures by Gansu on the basis of similar work in other Bank-financed highway projects (such as Shanghai-Zhejiang Highway and Second Henan Provincial Highway Project). (f) Provision of equipment to support the above-mentioned activities which includes for each province a four-wheel drive vehicle, photo camera, video camera, scanner, speed radar, portable personal computers with printers, other computers. (g) Evaluation of the implementation of the Road Safety Program in each province by an independent local expert. 3. Benefits and target population: The measured benefits of the project are savings in vehicle operating costs and in time savings to vehicle occupants. For the RIPA components of the project, expected increases in children's accessibility to schools and the populations expected increased use of medical services have also been estimated, but not valued in monetary units. Another important unquantified benefit of the project will be a reduction in road accidenl:s, particularly fatalities, to both motorized and non-motorized road users. For motorized vehicles, provision of highways with a median between traffic in opposing directions will result in a reduction in the frequent and often fatal head-on accidents to motorized road users. For non-motorized road users, safety will be increased in two ways. First, by providing grade separation at intersections and limiting crossing places for pedestrians and non-motorized vehicles, the number of potentially dangerous conflicts will be reduced. Second, the auto- only highways included in the project will attract many motorized vehicles from the present multi-use highways, again reducing the number of conflict situations with users of non-motorized vehicles. Most of the motorized vehicles on the roads to be improved are medium-size trucks and buses. E,y reducing the operating costs of these vehicles and encouraging the use of larger trucks, the efficiency of the extractive and manufacturing industries in these poor provinces will increase, making their products moire competitive in the national economy. In addition, the improved accessibility to sea ports will be a necessary but not sufficient condition for these provinces to attract foreign direct investment, and thereby reduce their income differential with the more prosperous coastal provinces. A reduction in bus operating costs will make possible a reduction in real fares to passengers, particularly since there is competition between bus operators on most of the principal highways included in the project.  Project Appraisal Document Page 7 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) A further unquantified benefit of the project would be a strengthened capability of the agencies responsible for the planning, design, supervision, construction, operation and maintenance of highways in each of the three provinces. Improved technology and stricter supervision of construction should lead to improvements in the quality of construction and maintenance of all highways in the three provinces, while practices in environmental assessment and protection, land acquisition and resettlement, and socio-economic surveys particularly in areas with significant minority populations, should all be enhanced. Target Population The three provinces included in the project are the third, eighth, and fifteenth poorest out of thirty one provinces and cities measured on the basis of income per person (China Statistical Yearbook, 1997). Since the beginning of the seventh five-year plan, the differences between the poorer and richer provinces have been increasing according to this measure. The project will reduce one of the barriers to these three poorer provinces by improving their situation relative to richer provinces. The RIPA component will contribute to a reduction in the income differential between the poorest and less poor counties in these provinces, as well as contributing to an improvement in the quality of life of their inhabitants. The beneficiaries of the project would therefore be among the poorest in China, and of the RIPA component, the poorest of the poor. The six highways to be improved pass through towns and counties that comprise about half of the population of the provinces (27% for Inner Mongolia or 6.2 million people, 25% for Gansu or 6.1 million people and 42% for Ningxia or 2.1 million people). The first year components of the RIPA sub-project will benefit counties whose population represents about 15% of the total poor population of the three provinces (1.3 million). 4. Institutional and Implementational Arrangements Implementation Period: Six years, from November 1998 to November 2004 (Annex 8) Executing Agency: The Communications Department in each of the three provinces has overall responsibility for project preparation and implementation. Each province has established a "leading group" to coordinate among the various provincial departments that have a bearing on the preparation and implementation of the project. The High-Grade Highway Construction Authority (or its equivalent) would be responsible for the construction of the main highways in each province. The Provincial Highway Administration Bureau would be responsible for the development and implementation of the RIPA program as well as the accident black spot pilot program in each province. A leading group for coordination between the traffic police and the communications department would coordinate the traffic safety component in each province. Identification and procurement of equipment would be handled by the Communications Department in each province. In the three provinces, an institutional strengthening and training office has been set up to coordinate implementation of the IST component. A steering group, composed of members from the relevant divisions in each communications department (Labor, Personnel Affairs, Science and Education) will assist the IST office in its coordination with the other agencies in the Department and in the highway sector generally in each province. Training programs in the three provinces would be coordinated with those in other Bank- financed highway projects by the Ministry of Communications (MOC). This arrangement has proven effective in other provincial projects in China where similar components have been implemented. Each of the three provinces has established agreed standards and criteria for the selection of personnel to be trained, in particular, English language proficiency for training outside of China. The provincial departments have also undertaken to provide annually a monitoring report and to consequently reset the training targets within a rolling two-year training plan. The CMC International Tendering Company has been retained by all three provinces as the procurement agency for all aspects of civil and electrical and mechanical works of the project requiring ICB and for equipment to be procured from abroad. The supervision of construction of the main highways in each province would be carried out by a joint foreign/local supervision team. Upon completion, the NAPA roads will be maintained by the pertinent branches of the Highway Administration Bureau in each province. Since none of the three provinces has much high-grade highways, it was agreed that each province would submit to  Project Appraisal Document Page 8 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) the Bank at least 6 months prior to the completion of the first main highway a study on operation and maintenance of these highways and would implement the findings of the study after consultation with the Bank. These studies would be prepared on the basis of a similar ongoing study in Henan and the planned studies in Hunan and Hubei provinces. Each province has established a Project Execution Office and supplied it with adequate staff , offices, related equipment and operating budget to ensure coordination among the concerned agencies and to affect smooth preparation and implementation of the project. These offices will be maintained (luring implementation. Since all three provinces are first-time borrowers in the highway sector from the Bank, MOC has and will assume a major coordinating role among the three provinces and would provide more than usual technical support. On-Lending Arrangements: The proposed loan of $230 million will be made to China on the Bank's standard terms for LIBOR-based US dollar single currency loans with a maturity of 20 years, including a 5 year grace period. Proceeds of the loan would be onlent to each of the three provinces ($80 million to Inner Mongolia, $100 million to Gansu and $50 million to Ningxia) on the same terms and conditions. The provincial governments would bear the foreign exchange risk. To facilitate disbursements, three Special Accounts would be opened, with an authorized allocation of $6.0 million in Inner Mongolia, $7.0 million in Gansu, and $4.0 million in Ningxia, the estimated average expenditures for a four-month period. The accounts would be opened in US dollars in respective banks acceptable to the Bank and would be managed by the respective Provincial Finance Bureaus. Financial Management: Similar to the situation in on-going Bank-financed highway projects in China, the three provinces have the systems and staff to carry out the financial management of the project. All three provinces have ongoing Bank-financed projects in other sectors and their provincial Finance Bureaus are familiar with Bank procedures. Auditing Arrangements: The Foreign Investment Audit Bureau of the State Auditing Administration (SAA) would be responsible for auditing of project expenditures. Actual audits would be carried oult for SAA by the provincial branch of SAA or the Provincial Audit Administration. Moreover, each provincial Communications Department will furnish the Bank with the audited accounts and special accounts, including SOEs, within six months of the close of each fiscal year. In the case of the SOEs, the audit report would contain a separate opinion by the auditors as to whether the SOEs submitted during the fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support related withdrawals. The Bank Group currently accepts SAA audits for this purpose. Monitoring and Evaluation Arrangements: The project would be supervised through Bank missions whose frequency would be guided by the progress of the works. However, on the average, a mission at about nine-month intervals would be mounted. Headquarters and resident mission staff would cooperate in this activity. Supervision of the RIPA component, which involves relatively small works spread over a large geographic area would be carried out by qualified local experts hired by the Bank. In addition to field missions, staff input would be required at headquarters and resident mission for project-related activities, especially procurement. Moreover, the Bank would monitor implementation of all components of the project through quarterly progress reports. Implementation of the main highways would also be followed-up through monthly progress reports to be prepared by the joint local/foreign supervision teams. It is estimated that over the implementation period of the project the total time expended on supervision would be in the order of 130 person-weeks. During implementation, project performance, including the achievement of physical targets and attainment of other objectives, will be monitored by PEOs through the use of annual monitoring reports on the environment and land acquisition and resettlement, progress reports, and auditing of project accounts. The first annual monitoring report would be submitted by March 31, 1999 and the last by September 30, 2006. In addition, upon completion, the project will be reviewed in an Implementation Completion Report, to be submitted to the Bank not later than six months after the closing date of the loan.  Project Appraisal Document Page 9 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Block 2: Project Rationale 5. CAS objective(s) supported by the project: Document number R97-30 (IDA/R97-14); and date of latest CAS discussion: March 18, 1997 and Progress Report (R98-107) May 28, 1998. The project supports the CAS objective of alleviating infrastructure bottlenecks and increasing road capacity. This would be achieved directly by the physical construction of about 687 km of high-grade highways located in priority corridors in the three provinces. Another main CAS objective in the area of human development is to help alleviate poverty. The project targets the poor counties in each province and includes implementation of about 1892 km of rural highways that help provide year-round access to these counties. These roads were selected from the comprehensive poverty program (eighth 7-year program: 1994- 2000) especially developed for each county. 6. Main sector issues and Government strategy: China's strong economic growth has resulted in high growth in transport demand and a shift toward highway transport. However, China has historically underinvested in transport and its road network ranks among the sparest in the world relative to geographic area or population and is quite unsafe. Few expressways exist and about 22 percent of rural communities have no all-weather vehicular access. Govemments at all levels have therefore embarked on a major highway investment and improvement program. At the central level, the basic strategy is to develop a National Trunk Highway System (NTHS) for the exclusive use of motorized vehicles (giving priority to two north-south and two east-west corridors and to corridors serving border areas and cross-border trade). The Ministry of Communications has been developing the NTHS, consisting of 12 interprovincial trunk expressways spanning China and totaling some 35,000 km. The Bank is already heavily involved in the construction of substantial sections of the NTHS. At the provincial/regional level, the strategy is to concentrate on network maintenance and the expansion and improvement of provincial and rural road networks, currently totaling about 1.2 million km, to provide greater mobility and to stimulate socioeconomic development, particularly in less-developed regions, such as the three provinces included under the proposed project. On the road transport policy agenda, growing attention is being paid to removing administrative and physical barriers to interprovincial trade and to a redefinition of government's role in transport in light of rapid administrative decentralization and growing non-state sector involvement. MOC needs to be strengthened to carry out its reformed mandate in matters such as finance, standards of planning, design and operation of the NTHS. Provincial and municipal governments are expected to continue to mobilize most investment resources required (including access to private investment and capital markets) and to seek greater expenditure and system efficiency through improved highway planning and investment strategies, as well as to modernize maintenance capacity and improve cost recovery. Local governments are also expected to further the development of the road user services and road construction industry through deregulation and promotion of competition, access to modem technology and better management. The Bank has prepared a report (No. 11819-CHA dated February 1994), "CHINA - Highway development and Management Issues, Options and Strategies", which provides recommendations for action in the foregoing areas which have formed the basis for Bank Group assistance in the sector. Also, the Bank has prepared a report (No. 15959-CHA, April 23, 1998), "China Forward with One Spirit: A Strategy for the Transport Sector", which provides recommendations for action in the transport sector including highways. The Bank and MOC held a high-level highway policy seminar in Beijing during May 6- 7, 1997 to discuss the major highway policy areas to be addressed in the Bank's future lending program to highways. These are: (1) planning of the highway network; (2) highway finance (public and private sources); (3) maintenance of highways; (4) highway safety; and (5) operation of the highway network with emphasis on the NTHS. In addition to the Bank and MOC, this seminar was attended by MOF, State Planning Commission (SPC), China Road Traffic Association (highway safety), selected provinces, the Asian Development Bank and the Overseas Economic Cooperation Fund of Japan (OECF), which are key financiers of the highway sector in China. Furthermore, the Bank in cooperation with MOF and MOC is presently addressing the issue of highway finance and the effectiveness of past technical assistance in the highway sector with a view to assist the govemment and the Bank in establishing a general policy and  Project Appraisal Document Page 10 Country: China Project Title: Tri-Provincial Highway Project (CN-'E-45788) strategy framework for the Bank's future lending to the sector. 7. Sector issues to be addressed by the project and strategic choices: The key issues to be addressed by the project are: (a) expansion of highway capacity (mainly links of NTHS) to remove bottlenecks and expedite socio-economic growth; (b) increase year-round accessibility to rural population with emphasis on poor counties; (c) highway safety; (d) highway maintenance; and (e) cost recovery through imposition of tolls on the users of five major roads included under the project (excludes the Yanchi-Xingren Highway in Ningxia). For the sustainability of the project, highway maintenance will be strengthened through the institutional strengthening/training component and the purchase of modem equipment for highway maintenance in general and for the maintenance and operation of the six main roads included under the project in particular. This project centers on the provinces of Inner Mongolia, Gansu and Ningxia. These are interior land- locked and poor provinces. China and the Bank agree to give more attention to such areas in order to arrest the rising inequalities between the prosperous and fast growing coastal and southern areas of China and the rest of the country. The provision of the main roads by the private sector was considered and discarded because of the relatively low traffic volumes on these roads to make them financially attractive to the private sector. Also, China does not yet have the appropriate legal and business framework for private provision of highways. However, the Bank through the Fourth National Highway Project (under preparation) is helping China develop such a framework as well as suitable bid documents for BOT-type of highway projects. Moreover, the NH4 project will include the construction of a major bridge on the Yangtze River through a BOT scheme. Experience to be gained from this pilot BOT project would be used in devising future BOT-type highway projects. 8. Project alternatives considered and reasons for rejection: Considering the existing and future socio-economic conditions in the area of influence for each of the six main roads included under the project, and the volume and composition of traffic in each of the six corridors as well as the capacity of the existing modes of traffic (rail and road), the proposed roads were selected as the most economical ways of meeting existing and future needs in each corridor. Similarly, the options of improving the existing roads versus building new ones on new right-of-way or a combination of both were thoroughly investigated in the feasibility study for each of the six main roads. The selected alternatives for Yanchi-Xingren Highway in Ningxia involved mostly upgrading and strengthening the existing road and constructing a 3.7 km bypass around Hui'anbu Township. But, in the case of the Guyaozi- Wangquanliang Highway, a new alignment was selected because it results in the lowest total transport cost (construction + operation + maintenance) and less resettlement of affected people. Several reasonable alignments were studied and compared for a given road. In the case of Liugouhe - Zhonghe Expressway in Gansu alignments on both sides of the Yellow River were considered and the selected alignment considered total transport cost, environmental and resettlement factors, and involved extensive consultation with the city of Lanzhou in order to ensure proper coordination between the proposed highway and the land use and development plans for the city. Moreover, alternatives were developed and compared and "the best" was incorporated in the selected solutions for major components or difficult sections of the roads., such as major bridges, interchanges and sections tranversing sand dune areas. For example, in the case of the main bridge (south of Baotou) on the Baotou-Dongsheng Highway in Inner Mongolia, 3 different alternative locations were studied and different designs involving varying numibers and widths of spans were considered at the selected location before the final solution was arrived at. Further, the appropriate technical standard for each of these roads as well as stage construction schemes were evaluated in the feasibility studies and subjected to extensive review by Bank missions during project preparation. For example, in the case of the Guyaozi-Wangquanliang Highway ( GWH) in Ningxia, three design standards were subjected to extensive studies and comparisons. These were Class 2 Auto-Dnly Highway (2-lanes), Class I Highway (4 lanes with access control), and Class I subgrade (4 lanes) with a pavement for two-lanes only. The alternative selected was the last one and was based on a comparison of technical factors including capacity, ease of expansion in the future, problems with acquiring additional right-of-way in the future, safety, economic and financial rates of return, and ability to repay the Bank loan, especially in the first few years after opening the road to traffic. Also, since this highway forms a part of the  Project Appraisal Document Page 11 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) NTHS, consideration was given to the design standards of this NTH on both sides of GWH. The optimum time for upgrading each altemative to a 4-lane Class 1 Highway was carefully studied and determined and properly included in the economic and financial analyses. 9. Major related projects financed by the Bank and/or other development agencies (completed, ongoing and planned). Sector issue Project * Remove Highway Capacity Bottlenecks (1)* Bank-financed: * Institutional Strengthening/Training (2) Highway Project (completed) 1,2* * Rural Roads and Poverty Alleviation (3) Beijing-Tianjin-Tanggu Expressway (completed) 1-6 * Highway Safety (4) Sichuan Provincial Highway (completed) 1,2, 6 * Operation and Maintenance of High-Grade Highways (5) Shaanxi Provincial Highway (completed) 1-3, 6 * Cost Recovery (6) Jiangxi Provincial Highway (completed) 1,2, 6 Shandong Provincial Highway (completed) 1,2,4, 6 Jiangsu Provincial Transport (completed) 1-3, 6 Zhejiang Provincial Highway (ongoing) 1-3, 6 Guangdong Provincial Highway (ongoing) 1-4, 6 Henan Highway (ongoing) 1-3, 6 Fujian Highway (ongoing) 1,2, 6 National Highway: Hebei/Henan (ongoing) 1,2,5, 6 Xinjiang Highway (ongoing) 1,2,4, 6 Shanghai-Zhejiang Highway (ongoing) 1,2,4, 6 Second Shaanxi Provincial Highway (ongoing) 1-4, 6 Second Henan Provincial Highway (ongoing) 1-5, 6 Second Xinjiang Highway (ongoing) 1,2, 6 Second Nat'l Hwy: Guangdong/Hunan (ongoing) 1,2, 6 Third Nat'l Hwy: Hubei 1,2,5, 6 Other development agencies Asian DeveloDment Bank Shenyang-Benxi Highway (completed) Hunan Expressway (completed) Julin Expressway(completed) Heilongjiang Expressway (ongoing) Yunan Expressway (ongoing) Hebei and Liaoning Expressway (ongoing) Chongqing Expressway (ongoing) Liaoning and Jilin Expressways (ongoing) Jiangxi Highway Project (ongoing) Overseas Economic Cooperation Fund of Japan Hainan Development Hefei-Tongling Highway and Tongling Yangtze River Highway Bridge Construction Second Chongqing Yangtze River Bridge Construction Qiqihar Nenjiang River Highway Bridge Construction *The numbers correspond to the sector issues in first column of this tabulation.  Project Appraisal Document Page 12 Country: China Project Title: Tn-Provincial Highway Project (CN-PIE-45788) 10. Lessons learned and reflected in the project design: The Bank has accumulated substantial experience through the preparation and implementation of 19 highway projects in China, only seven of which have been completed. While the overall performance of highway projects is by and large satisfactory, a number of problems have occurred, which have been taken into consideration in the proposed project's design. The problems include: quality of construction; late start of the design of traffic engineering facilities (traffic monitoring, telecommunications, tolling and lighting) which has delayed completion of some projects and necessitated extension of the closing date of Bank's loans, and the need for improved highway management and operation, especially in the context of tollinig of expressways. The designs and bid documents for the main roads in the project, will be reviewed by international design engineers. The construction will be supervised by a joint foreign/local team wh'ich is properly staffed and equipped. There is also a growing concern that adequate funding for highway maintenance is not now being generated to cover an expanding and more expensive highway system. Previously, this was not an issue - adequate funds were being set aside for this purpose. The Bank missions had discussions with the three provinces on the highway maintenance issue and the sources and uses of funds in their 9FYP for highways. Agreement will be reached on a program to monitor physical maintenance activities based on the existing condition of the highway network and realistic annual targets for their future conditions. Experience with rural highways in Africa and South Asia and with the Bank's Second Shaanxi and Second Henan Highway Projects in China has shown that provision of basic access through all-weather roads and provision of non-motorized means of transport are contributing factors to reducing poverty in rural areas, especially when combined with programs for socioeconomic development. Inner Mongolia, Gansu and Ningxia, similar to the rest of China, have a good record in this regard. The proposed project contains a RIPA component which focuses on the lower level roads in the poorest counties in these provinces. The formulation of this component as well as arrangements for its implementation took into consideration experience with the RIPA component in the Second Shaanxi and Second Henan Provincial Highway Projects and with the "Road Improvement Program" in the Bank-financed highway projects in Zhejiang, Guangdong and Henan provinces in China. Limited experience with highway safety programs in China has pointed to the difficulty of their implementation due to insufficient coordination between the Traffic Police and the Highway Departments. This issue reflects a general difficulty with inter-departmental coordination in China. A coordination mechanism has been agreed to in all three provinces. Experience in the area of land acquisition and resettlement has generally been satisfactory. However, the Bank must make its requirements well known to the Chinese agencies at an early stage in the preparation of the project. Also, the Legal Department should be brought on board early in the project preparation. A Bank resettlement specialist and a social scientist (consultant) were involved from the beginning in project preparation. The resettlement action plans for the proposed project were reviewed by the Legal Department before appraisal of the project. Experience in the environmental area in China has generally been favorable. However, more attention should be paid to environmental supervision during construction and to training of personnel. The proposed project will provide an adequate institutional setup and training for such environmental supervision. 11. Indications of borrower commitment and ownership: There is strong support for the project from the various levels of Government. SPC, MOF, MOC and the provincial governments strongly support the project. Also, the local governments the task team met with in the affected areas expressed tremendous support and emphasized the need for the project. The Communications Department in each of the three provinces shows a strong sense of ownership of the project. They have completed the feasibility studies and environmental analyses of the main roads and substantially completed their resettlement action plans and preliminary engineering designs. The first year package of RIPA roads has been fully prepared and is ready for implementation. The IST and equipment needs are well defined and their procurement arrangements have been agreed with the Bank. The prequalification for civil contractors for the main highways was advertised in March and April, 1998. Each province has established a project execution office and provided it with necessary qualified staff including translators as well as the required offices and are functioning very well. The provinces as well as MOC, MOF and SPC urged the Bank to advance this project from FY99 to FY98. This was accomplished. The area where support seemed to be weak relates to traffic safety due primarily to the low level of awareness of the problem, and coordination between the traffic police and the highway  Project Appraisal Document Page 13 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) authorities needs to be improved. 12. Value added of Bank support: The involvement of the Bank results in much needed additional financial resources to help remove highway bottlenecks and increase traffic capacity in high priority corridors in each of the three provinces as well as improve all-weather access especially to poor counties. Bank involvement will accelerate institutional and manpower development in highway planning, design, supervision, construction, operation and maintenance. Bank involvement is also expected to benefit the design and the quality of construction of the roads to be undertaken (this has been problematic in some other projects). Furthermore, the Bank will help the provincial communications departments to improve maintenance of the highway network through introduction of modem maintenance equipment, training of staff and allocation of adequate funds. In addition, it will raise the awareness of the highway safety problem and make modest improvements in this regard. Similarly, Bank involvement will improve the provincial practices in the analyses and implementation of environmental, land acquisition and resettlement, and participatory aspects of projects. This project will also help increase attention to the needs of communities, including minorities along the highways and sharpen the skills needed to carry out the required analyses. Although the Bank loan will not be used to finance RIPA, Bank involvement in this component helped improve the institutional capability of each of the three provinces in the planning, selection, and evaluation of RIPA roads. Also, Bank involvement is expected to improve the engineering design, quality of construction and maintenance of these roads. Block 3: Summary Project Assessments (Detailed assessments are in the project file. See Annex 15) 13. Economic [XI Cost-Benefit Analysis X: ERR = [ ] Cost Effectiveness [] Other (see Annex 9): 23.3 %, ENPV = US547.7 million Analysis: [Specify] The principal measured benefits of the project are savings in vehicle operating costs and time savings to vehicle occupants. The estimated overall economic rate of return (ERR) for the project is 23.3% and the economic net present value (ENPV) is estimated at U$ 547.7 million. The ERRs for each of the six main highways range from a low of 15.2% (Guyaozi to Wangquanliang) to a high of 42.5% (Yanchi to Xingren). The estimated ERR and ENPV of the first-year RIPA components of the project are 15.9% and U$9.3 million respectively. An analysis of the evaluation results and a description of the method used to derive them are provided in Annex 9. Summary of Economic Evaluation results Province Highway Best estimate ERR range ENPV ERR % % (U$ million) Inner Mongolia Baotou to Dongsheng 32.6% 22.8% to 37.6% 272.2 Baiyinchagan to 20.5% 15.0% to 27.6% 26.3 Fengzhen Gansu Xujiamo to Jiepaicun 21.1% 16.2% to 23.5% 126.2 Liugouhe to Zhonghe 17.0% 12.8% to 19.8% 55.9 Ningxia Yanchi to Xingren 42.5% 25.2% to 48.5% 29.5 Guyaozi to 15.2% 10.9% to 16.5% 28.4 Wangquangliang RIPA component First year sub-projects 15.9% 12.3% to 22.4% 9.3 Total 23.3% 18.8% to 27.0% 547.7  Project Appraisal Document Page 14 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 14. Financial (see Annex 9) Each of the three provinces is expected to be able to cover maintenance and operating costs as well as the loan amortization charges from the expected toll revenues and with the exception of Ningxia, this will be possible from the first year of operation of the highways. Although the Guyaozi to Wangquangliang Highway in Ningxia will generate enough toll revenue over the loan period, with a standard amortization schedule there will be deficits in the early years of operation (up to the year 2007). This situation can be met by transferring revenue from other user charges or revising the repayment schedule. The expected financial net present value of excess revenues, once all maintenance, operating and loan repayments have been met, is positive for each province and equivalent to U$ 56.0 million overall. Revenue from existing user charges is expected to be sufficient to cover counterpart financing requirements during the construction period. 15. Technical: The main roads and RIPA roads included under the project were designed by reputable Chinese design institutes according to the latest MOC standards. These preliminary designs as well as the bid documents were reviewed by international consultants assisted by highly qualified Chinese Engineers, and found satisfactory. The final bid documents will be reviewed by the same consultants during June/July 1998. The constructability of the designs was confirmed by these experts. The technologies involved are proven and well mastered by Chinese contractors. Because of the relativity low traffic volumes on the Guyaozi-Wangquanliang Highway, the appropriate technical standard and stage construction were studied at great length. The recommended standards were verified by Bank experts and the above-mentioned international experts. Also, the design of the Yellow River bridge south of Baotou (on the Baotou-Dongsheng Highway in Inner Mongolia) was subjected to extensive analyses before the final design was selected (Section 8 of this PAD). The cost estimate of the project reflects February 1998 prices and is based on the latest available engineering studies and prevailing unit rates for civil works, recent: costs of foreign experts from other highway projects in China and recent price quotations for equipment. The cost estimate includes physical and price contingencies. Physical contingencies are calculated at 10 percent of the base cost of civil works and construction supervision. Price contingencies are calculated for foreign costs, using international annual escalation factors of 1.85 percent during 1998-2004. Price contingencies for local costs are based on local annual escalation of 5.8% in 1998, and 5.5 percent during 1999-2004. 16. Institutional: The Provincial Communications Department in each of Inner Mongolia, Gansu and Ningxia is capable of successfully implementing the project. As explained in section 4 of Block I of this PAD (institutional and implementational arrangements), each province has set up a project execution office (PEO) to coordinate and manage the preparation and implementation of the project. MOC has provided adequate coordination among the three provinces and provided more than usual technical support. Each province made excellent use of advisers/experts from completed or ongoing Bank-financed highway projects which resulted in better design and smoother preparation of the project. The PEO in Inner Mongolia was established in December 1997 and currently has a staff of about 15. The PEO in Gansu was setup in May 1997 and presently has a staff of about 12 people. In Ningxia, the PEO was established in April 1997 and has a staff of about 5. The structure of these PEOs and their organizational relationship to the other units/institutions in the communications sectors of the provinces are available in the IST report prepared by each province, which are in turn available in the project files. As each office has been recently established, they are the object of institutional strengthening and training efforts, including equipment to enable them to operate effectively during the course of the project. An adequate coordination mechanism between the Traffic Police and the Communications Department in each province is being established. However, there is great concern, regarding the strength of the provincial commitment to ensure that effective coordination will actually be accomplished. The PIP prepared by each of the three provinces has been received and reviewed by the Bank and found satisfactory. The agreed procurement and disbursement arrangements are presented in Annex 10.  Project Appraisal Document Page 15 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 17. Social: a. Socio-economic surveys Socio-economic surveys were conducted in November 1997 to assess the impact of the main highways on the communities along their alignment, with emphasis on those containing significant minority populations. These were carried out by a Chinese consulting firm assisted by an international anthropological consultant (both approved by the Bank) in accordance with terms of references agreed with the Bank. The surveys were restricted to 3 villages (mainly Hui minority) along the Yanchi-Xingren Highway in Ningxia, 2 villages along the Xujiamo-Jiepaicun Highway (Tibetan and Hui minorities) in Gansu, and 15 villages (Han majority with Mongol minority) along the Baiyinchagan-Fengzhen Highway in Inner Mongolia. The surveys utilized focus groups, household case studies, individual interviews, and questionnaires in collecting the data (Annex 11). The accuracy of the data was confirmed by a social scientist of the Bank Resident Mission in Beijing by reviewing the original data. The final report for these surveys was received in March 1998 and was found satisfactory. The report emphasized the many benefits the highways would bring to the communities within their areas of influence and stressed the support given by the local inhabitants to the road projects. The main negative impacts relate to problems associated with culvert design, traffic safety, and riverbank erosion threatening Muslim grave-sites. These will be addressed through design modifications and by implementing focused traffic safety education with emphasis on school children. It should be pointed out that the alignment of the highways was selected to be close to but also avoid going through villages to minimize land acquisition and resettlement. To maintain social cohesion of the villages, and allow passage of people, animals, vehicles, and goods from one side to another, the design of the highways provides for a large number of underpasses and culverts. Other areas of concern include the need for adequate and timely compensation for land and property and related resettlement, using villagers and their local resources in road construction, and enhanced access to training opportunities and credit to fully benefit form road development. Resettlement concerns would be addressed through the preparation of detailed resettlement actions plans for each highway. To address the training needs, the villages can use a portion of the compensation for resettlement (resettlement subsidy) towards provision of training. Since the need for credit exists even without the proposed highways and affects both the Han majority and the minorities, the Communications Department in each of the three provinces did not think they should finance such credit from their limited financial resources. However, the Bank has recommended to the concerned governments at all levels to provide adequate credit to promote the socio-economic development of these areas. b. Resettlement Issues The project requires land acquisition and resettlement for the main highways and the roads under the RIPA component. Construction of new highways, interchanges, service areas, buildings for management and maintenance, and link roads would require land acquisition and cause displacement of affected people. Highways that require upgrading or rehabilitation would need a relatively smaller amount of land acquisition and in rare cases, resettlement of affected persons. Efforts were made throughout the design stage of the project to minimize land acquisition and resettlement impacts. Apart from involving various agencies of the Provincial Communications Department in this exercise, local governments and people's representatives were involved in this process. Significant reduction in the amount of relocation required was achieved by modifying the alignment of the highways. As a result of these efforts, the amount of relocation of affected persons is quite low compared to the scale of the project.  Project Appraisal Document Page 16 Country: China Project Title: Trl-Provincial Highway Project (CN-PE-45788) Land acquisition and resettlement impacts were systematically identified through detailed census and socioeconomic surveys of the affected people and assets in all three provinces. Resettlement Action Plan (RAPs) in accordance with Bank's Operational Directive 4.30 have been prepared and found satisfactory. The RAPs aim to compensate affected persons for lost structures and crops, address the issue of economic rehabilitation primarily through land redistribution (except Gansu), and provide alternative land for constructing new houses. Due to overall shortage of cultivable land in the project area in Gansu province, a combination of innovative economic rehabilitation measures were devised. These include treating affected land as equity in formation of township enterprises, or depositing compensation amounts into interest bearing deposits held by the affected households (Annex 12). Affected enterprises will be compensated for loss of assets and for loss of incomes during transition and will also be provided alternative land where relocation is necessary. A summary of project impacts related to land acquisition and resettlement is given below: Land Acquisition and Resettlement Impacts of the Highways Component Province Land Affected Households/ Affecled Acquisition (mu) Persons Enterprises/ Workers Inner Mongolia 12,499 297/8657 23/471 Gansu 11,350 241/4134 8/0 Ningxia 8,704 142/2219 13/398 Institutional Arrangements for RAP implementation have been established by the respec tive provinces. While the Project Execution Offices Prepared the RAPs in collaboration with the respeciLive county governments and the project will provide the funding for resettlement, actual implementation will, be carried out by the local governments. Project specific resettlement offices at the county and township level will be established prior to start of resettlement implementation. These offices will liaise with responsible local agencies for resettlement implementation. The RAPs provide for both internal and, external monitoring. Indicators for monitoring have been developed and presented in the RAPs. While internal monitoring will focus on the quantitative aspects of resettlement implementation, external monitoring wvill evaluate its qualitative aspects. Internal and external monitoring reports would be submitted to the Bank every six months until the implementation of resettlement is satisfactorily completed. Other arrangements for implementation have been adequately planned. Precise implementation schedules, well-coordinated with the civil construction, have been prepared, and the RAPs are proposed to be funded exclusively out of counterpart funds. The cost estimates include adequate allocation for contingencies, both price related and physical. The RAPs were prepared based on consultations with affected persons and their representatives. Drafts were discussed with local governments at the county and township level. Village level leaders were involved in devleoping economic rehabilitation strategies for each township, summarized in the RAPs. The RAPs also include provisions for informing all affected persons of their entitlements under the resettlement policy and ensuring their continued participation in implementation. The RIPA component has also been prepared in accordance with Bank Guidelines on resettlement. The policy framework described in the RAPs for the highways component in each of the provinces would also apply to the roads to be constructed under the RIPA component. It was agreed that in cases where less than 200 persons are affected in any county in one year, only an inventory of resettlement impacts would need to be prepared and there would be no need to prepare detailed RAPs. However, if more than 200 persons are affected, complete RAPs would need to be submitted to the Bank. In the first year package of RIPA, there are 13 systems in Inner Mongolia, 4 in Ningxia, and 6 in Gansu. 6368 mu of land would need to be permanently acquired, 941 mu will be temporarily acquired. 1180 persons will be directly affected by the land acquisition and relocaiion due to construction of RIPA roads.  Project Appraisal Document Page 17 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) 18. Environmental: Environmental Category [X] A [ ] B [ ] C The environmental assessments (EA) have been carried out for six main highway components of the project. During the preparation and evaluation of EA, the national procedures, including the Circular on Strengthening Environmental Impact Assessment Management for Construction Projects Financed by International Financial Organizations (June 1993), and the Bank requirements were thoroughly followed. The EA documents such as Environmental Impact Assessment Reports (EIAs), Environmental Action Plans (EAPs) and Executive Summary (ES) have been prepared, incorporating the Bank comments on earlier drafts, and found to be satisfactory to the Bank. The ES was distributed to the Board on March 6, 1998. With respect to the RIPA component, it was agreed that a Sectoral Environmental Assessment approach would be applied. The Initial Environmental Evaluation Reports (IEE) and EAPs were submitted to the Bank during December 1997-January 1998. Those documents were reviewed by the Bank and found satisfactory. The major findings and discussions in these documents are summarized below. More detailed information on the EA of main highways as well as RIPA components in the three provinces is attached as Annex 13 to this document. A. Main Highways Potential Impacts. Major potential environmental impacts include noise and air pollution during the construction and operation phases (all main highways), soil erosion during the construction phase (all highways), impacts on vegetation (all main highways, in particular, those in Inner Mongolia), impacts on cultural property (Guyaozi-Wangquanliang Highway in Ningxia) and transportation of construction materials (all highways). Mitigation Measures. The EAPs specified the appropriate mitigation measures, environmental monitoring plans, institutional arrangements to implement the EAPs, training and equipment requirements, and the cost estimate of implementation of EAPs. Major mitigation measures include adequate selection of alignment, watering to prevent dust during the construction phase, and noise protection measures including construction of noise barriers. An additional survey was carried out by Ningxia with participation of experts of cultural property to assess the significance of and potential impacts on cultural property (Great Wall). The survey confirmed that the concerned section of the Great Wall has been greatly damaged and is not under protection. Mitigation measures identified through the survey were integrated in EAP and found satisfactory to the Bank. The engineering design and technical specifications for the above highways will incorporate appropriate measures required to be taken for environmental protection. It was ascertained that the proposed highways would not affect ecologically sensitive areas and that their construction and operation should have no adverse impacts on the environment through the implementation of EAPs. The Communications Department in each of the three provinces would furnish to the Bank by February 28 of each year starting in 2000 and ending in 2007 an annual environmental monitoring report for the previous calendar year. Public Consultation and Feedback. During the EA works in the three provinces, the local people were intensively consulted. The following approaches were adopted for public consultation under this project were: (i) Workshop with participation of experts and governmental officials; (ii) Consultation meetings with local governments/representatives; and (iii) Questionnaire analysis of public opinion supplemented by interviews. These environmental documents were made public locally at the Provincial Communications Department in each province. Major feedback other than those relating to resettlement issues includes: (i) noise pollution during the construction and operation phases should be minimized (XJH and LZH in Gansu, and YXH in Ningxia); (ii) during the construction phase, necessary mitigation measures such as dust and noise pollution control should be implemented (BDH and BFH in Inner Mongolia); (iii) afforestation work should be timely undertaken (BDH and BFH in Inner Mongolia, and LZH in Gansu); and (iv) passages should be constructed so as to minimize impacts of community separation (GWH in Ningxia). Those points were reflected in selection of road alignment, design of the highways, and/or EAP as appropriate.  Project Appraisal Document Page 18 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) B. RIPA Components No new construction will be included in RIPA components in Gansu and Ningxia. In Inner Mongolia, three of the thirteen RIPA sub-projects include new road construction components. Since the current environmental conditions are good in quality, the construction works are small in size and the future traffic volumes are relatively small, no significant potential impacts are envisaged. Appropriate mitigation measures have been integrated in EAPs and found satisfactory to the Bank. 19. Participatory Approach: a. Primary Beneficiaries and other Affected Groups The primary beneficiaries of the project are the users of the main highways in all three of the provinces as well as the poor counties where the RIPA roads will be built/improved. However, the project will benefit many highway users in China since the main roads form important links of the national highway system and would thus facilitate long distance travel, especially in an east-west direction. Other beneficiaries could include the Communications Departments and their units through the institutional strengthening and training contained in the project and provision of modern equipment. b. Other Key Stakeholders: Villages, counties, local governments, businesses and persons affected by the projects. The affected communities were involved in the formulation and comparison of alternative alignments as well as the selection of the final alignments and number, location and technical standards of interchanges, underpasses and grade separations. Problem locations involved several consultations. During the EIA preparation, the local people were intensively consulted through workshops, meetings with local government representatives and public opinion questionnaires supplemented by interviews. The feedback was reflected in the selection of road alignments, design of highways and preparation of environmental action plans as appropriate. Moreover, the environmental documents for the main highways were made public locally in each province (section 18 of Block 3 of the PAD). Special attention was given to the consultations with affected persons and their representatives during the preparation of the resettlement action plans. Implementation of the resettlement program is proposed to be a highly participatory exercise. A resettlement information booklet, including detailed entitlements of each household, main contents of the RAPs, compensation and entitlement policies and grievance procedures would be distributed to the affected people prior to resettlement implementation. Both internal and external (by independent monitors) monitoring of the resettlement program would be conducted (section 17 b of Block 3 of the PAD). Extensive field socio-economic surveys of select communities, that contain significant minorities, along three of the main highways were conducted to assess the social impact of these highways. T'hese surveys included focus groups, household case studies, individual interviews, questionnaires and clirect observations. The findings of these surveys were utilized in improving the design of the highways and in impressing on the local governments the desirability to provide credit facilities for development of highway businesses and training for the affected people (section 17 (a) of Block 3 of the PAD).  Project Appraisal Document Page 19 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) 20. Sustainability: Experience from completed and ongoing Bank-financed highway projects in China shows a great commitment for implementation of the physical components of the project, which account for the majority of the project cost. Generally, the counterpart funds are available on time, but lately some of the provinces have become overextended and in some cases some delays occurred in the availability of these funds which had a slight adverse effect on timely implementation of the project. As explained under the financial issues of this section, the level of tolls and the need to review it periodically is important for the financial and economic viability of the project and the ability to repay the Bank loan as well as to provide timely and needed maintenance. The price bureaus in the provinces with Bank-financed highway projects have traditionally increased the tolls to repay the Bank loan. Traffic volumes on the main highways included in the project are expected to continue to grow and to provide adequate revenues, to ensure adequate maintenance and operation of these highways. The proposed project includes modem equipment for this purpose as well as training of staff. In the case of RIPA roads, the main factor affecting sustainability is expected to be the timely maintenance of those roads which is in turn a function of the available budgets and other resources. Because of the relatively low level of technology used (primarily labor-based) and the Chinese experience with such methods as well as history of involvement of the local people in the maintenance of such roads, the risk of little or no maintenance is relatively moderate.  Project Appraisal Document Page 20 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 21. Critical Risks (reflecting assumptions in Annex 1): Risk Risk Rating Risk Minimization Measure Project outputs to development objectives: (Annex 1, cell "from outputs to objects") * Government at central, provincial and local levels are not Low Effective dialogue with the central and provincial governments. committed to project. * Traffic grows at lower than expected rates on toll roads Medium (a) critical review of feasibility studies and selection of proper and toll roads attract less than expected traffic volumes from technical standards and stage construction. existing parallel roads could result in underutilization of toll (b) proper setting of the levels of toll rates roads, difficulty in repaying Bank loan, less economic benefits, and more traffic accidents. *Price control committees delay or do not approve proposed Moderate (a) Tolls will be set in accordance with a proper study to be toll rates which could impact the ability to repay the Bank reviewed by the Bank. loan. (b) Dialogue with the provincial governments. *Political pressures interfere with implementation plans and Moderate (a) Dialogue with provincial govemment and MOC. thus adversely affect quality of construction. (b) Prequalification of Contractors is properly done and "best" contractors are selected. (c) Adequate supervision arrangements are made (d) Monitor implementation through progress reports, monitoring reports and supervision missions. * Traffic Police and Communications departments are not Substantial (a) Appropriate coordination measures between traffic police and enthusiastic about cooperative efforts; which could lead to communications department have been established. ineffectiveness of safety component and less than expected (b) Dialogue with provincial govemments. reductions in traffic accidents. (c) Actively involve MOC in monitoring the highway safety component. eTrained staff do not apply acquired skills in work place Moderate (a) Well designed and implementable training program. which could lead to ineffective strengthening of institutions (b) Submittal of two-year rolling training programs. and training. (c) Criteria for selection of trainees are logical and implemented in practice. (d) English language training is given to trainees before training abroad. (e) Reports on effectiveness of training after training is completed are prepared and submitted. (f) Provide trainees with opportunity to apply acquired skills and tie promotions/salary increases to effective training. Project components to outputs: Annex 1, cell "from components to outputs" * Unfamiliarity with the Bank procedures could delay Moderate (a) MOC and Bank (headquarters and RMC) will follow-up implementation. project closely and provide timely advice and support. (b) Bank provided on December 8-10, 1997 training on procurement and disbursement. (c) Project launch workshop will be held after board approval and before start-up of implementation. * Counterpart funds not available in sufficient quantity or Low (a) Ensure sufficient financial resources are available through on time analysis of highway revenues and expenditures. (b) Dialogue with the provincial govemment and MOC *Delays in timely approvals of procurement activities could Low (a) Agreement with PCDs on detailed procurement arrangements. lead to delay in completion of the project on time, especially (b) Training of pertinent provincial personnel by Bank and central the tolling, telecommunications and monitoring systems. govemment in the areas of procurement and disbursement. (c) Use of experienced procurement agencies. (d) Use of intemational consultants to review design and bid documents. *Interference of local people in acquisition of land could Moderate (a) Preparation of an executable RAP with assistance from lead to delays in implementation and resettlement cost specialists who have worked on Bank-financed projects. overrun. (b) Implement most of the RAP before start-up of construction. (c) Increase consultation with local communities, especially regarding number, size and location of underpasses, and culverts, temporary use of roads by contractors; borrow areas, crushers. (d) Provide adequate contingencies for land acquisition and resettlement costs. *Major archeological finds during construction could delay Low (a) Full consultation with archeological authorities in each information and increase cost of the project. province during selection of alignments and design of highways. Overall project risk rating Moderate  Project Appraisal Document Page 21 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 22. Possible Controversial Aspects: During preparation of the project, the conduct of socio-economic surveys for communities affected by the project, with emphasis on minorities, faced many obstacles and was a main reason for the delay in preparation of this project. However, since this issue is a country issue in addition to being project- specific, it is recommended that it be addressed at the country level. This would reduce delays in project preparation as well as the time and effort required, and above all reduce the tensions between the Bank task teams and the pertinent provincial and central authorities in China. Block 4: Main Loan Conditions 23. Agreements Reached with the Government: The Borrower (Ministry of Finance) will ensure that the proceeds of the loan are onlent to the Beneficiary (Inner Mongolia Autonomous Region, Gansu Province, and Ningxia Hui Autonomous Region) on the same terms and conditions as the Bank loan to the Borrower and that the Beneficiary bears the foreign exchange risk. 24. Agreements Reached with the Beneficiary: Maintenance of Hi2hwav Network (a) Inner Mongolia, Gansu and Ningxia shall furnish to the Bank for its review and comments, by April 30 of each year from 1999 until 2006 an annual highway maintenance report, which shall: (a) indicate the length and condition of each class of road; (b) establish realistic targets for the following year, including an estimate of the required physical works by class thereof and the costs thereof; and (c) measure the results and the actual expenditures of the past year against the targets and budgeted funds therefor. Environment, Land Ac unisition and Resettlement (a) Inner Mongolia, Gansu and Ningxia shall carry out each main highway EAP and RAP i.n a manner satisfactory to the Bank and furnish any proposed revision of these plans to the Bank for its prior approval. (b) Inner Mongolia, Gansu and Ningxia shall, prior to commencing construction on a RIPA Sub-project: (i) carry out any necessary resettlement in accordance with a resettlement action plan approved by the Bank, which shall have been designed on the basis of policies, planning principles, institutional arrangements and design criteria acceptable to the Bank; and (ii) furnish to the Bank an environmental action plan satisfactory to the Bank, prepared in accordance with basic policies, planning principles and institutional arrangements acceptable to the Bank and, thereafter, carry out such environmental action plan in a manner satisfactory to the Bank; and (c) For any RIPA Sub-project which involves new road construction, or substantial widening, or land acquisition, or special areas such as national parks, natural reserves and areas of significant cultural heritage, Inner Mongolia, Gansu and Ningxia shall furnish to the Bank an environmental impact assessment satisfactory to the Bank in addition to the environmental action plan referred to above. (d) Inner Mongolia, Gansu and Ningxia shall prepare, under terms of reference acceptable to the Bank, and furnish to the Bank: (i) an annual environmental monitoring report for the previous year starting February 28, 2000 and ending 2007; and (ii) within two months of each December 31 and June 30 starting December 31, 1998 and until completion of all land acquisition and resettlement under the project, internal resettlement monitoring reports prepared by appropriate agencies in each of three provinces and within four months of each December 31 and June 30 starting December 31, 1998 and until completion of all land acquisition and resettlement under the project, external resettlement monitoring reports prepared by an independent agency acceptable to the Bank, regarding the implementation and impact of the resettlement activities during the previous six month period ending on said December 31 or June 30. Main Highwavs (a) Gansu Province shall take all necessary steps to ensure that the design and construction of the 1.8 kmn extension to the south of the Tianshuilu linking road to the Liugouhe-Zhonghe Expressway to connect with the existing street network of the city of Lanzhou is carried out in a fashion satisfactory to the Bank and completed no later than November 1, 2002, simultaneously with completion of the  Project Appraisal Document Page 22 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) construction of the Liugouhe-Zhonghe Expressway. (b) Inner Mongolia, Gansu and Ningxia shall furnish to the Bank for its review and comments, by the dates set out below, an analysis and recommendation for the structure of toll rates: (i) By February 1, 2001 for the Guyaozi-Wangquanliang Highway in Ningxia and the Baiyinchagan- Fengzhen Highway in Inner Mongolia (ii) By February 1, 2002 for the Baotou-Dongsheng Highway in Inner Mongolia and the Liugoahe- Zhonghe Expressway and Xujiamo-Jiepaicun Highway in Gansu. (c) Each of Inner Mongolia, Gansu and Ningxia shall: (i) By February 1, 2001 in the case of Inner Mongolia and Ningxia and by February 1, 2002 in the case of Gansu, complete, in accordance with terms of reference satisfactory to the Bank and taking account of the results of studies on highway operation and maintenance conducted under other Bank-financed highway projects in China and of experience in Inner Mongolia, Gansu and Ningxia and other parts of China, a study on the operation and maintenance of high-grade highways and furnish said study to the Bank for review; and (ii) Thereafter take appropriate steps to implement the recommendations of said study, taking into consideration the comments thereon of the Bank. RIPA (a) Each of Inner Mongolia, Gansu and Ningxia shall prepare and submit to the Bank for its approval, by June 30 of each year starting in 1999, an annual work plan and budget for the RIPA sub-projects proposed to be implemented during the following year, such annual vwork plan to include, inter alia, (a) all RIPA Sub-projects proposed for the year; (b) an economic and social benefit analysis using indicators acceptable to the Bank; (c) an implementation and supervision schedule; (d) a maintenance plan; and (e) the resettlement action plans and the environmental plan, and, as the case may be, the environmental impact assessment required in respect of each proposed RIPA Sub-project, all in form and substance satisfactory to the Bank. Institutional Strengthening and Training (a) Inner Mongolia, Gansu and Ningxia shall by May 31 of each year commencing in 1999, furnish the rolling two-year training implementation schedule to the Bank and shall carry out the training under a program acceptable to the Bank. Reporting, Monitorine and Auditing Each of Inner Mongolia, Gansu and Ningxia shall prepare on the basis of guidelines acceptable to the Bank and submit to the Bank: (a) a monthly report of the progress of the works on the main highways included under the project; (b) a quarterly report of the progress of implementation of all components of the project; (c) by March 31 of each year commencing in 2000 and ending in 2006, an annual monitoring report in a form satisfactory to the Bank covering all components of the Project and assessing the extent to which various implementation and development objectives have been satisfied in the course of Project execution and operation. (d) within six months of the closing date of the Bank loan to the project, an implementation completion report in a format acceptable to the Bank; (e) the audited accounts for the project, statements of expenditures, and special accounts by independent auditors acceptable to the Bank within six months of the close of each fiscal year. 25. Readiness for Implementation [X] The preliminary designs are ready but the final designs for the first year activities are expected to be ready by July 31, 1998. [X] The procurement documents for the first year's activities are expected to be ready by July 31, 1998 for most items.  Project Appraisal Document Page 23 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) [X] The Project Implementation Plan from each of the three provinces was received by the Bank and found satisfactory. Block 5: Compliance with Bank Policies [X] This project complies with all applicable Bank policies. (a) Task Team Leader: Hatim Hajj, Principal Transport Specialist (b) Sect Manager: Jeffrey S. Gutman  Project Appraisal Document Page 24 Country: China Project Title: Tri-Provincial Highway Project (CN-PEE-45788) Annex 1 Project Design Summary Narrative Summary Key Performance Indicators Monitoring and Supervision Critical Assumptions and Risks CAS Objective Gross output value of County and Provincial annual (CAS Objective to Bank Increased economic activity Agriculture and Industry economic reports/statistics Mission) along selected high-priority (GOVAI) in affected counties highway corridors and (See Annex I (a), I (b) and I (c)) targeted poor counties in each of Inner Mongolia, Gansu and Ningxia. Project Development (See Annex 1(a), I(b) and 1(c)) Objectives *Average Daily Traffic (ADT) on *Increase efficiency and proposed and existing highways *Traffic counts reports from *Other county poverty safety of traffic along select in selected high-priority communications departments alleviation projects are high priority highways in corridors. and branches. successful in achieving each of the three provinces. *Average speeds on proposed *Reports on traffic speeds their desired impact. *Provide improved access to and existing highways along main highways. *Maintenance of roads is targeted poor counties in *Traffic accident rates on *Traffic accident reports from successfully carried out by each of the three provinces. proposed and existing highways Traffic Police, Public Security the Communications *ADT on roads included in RIPA Bureau. Departments and their program. *Reports from weather branches. *Number of days/year the roads bureaus and county-level *Political structure in RIPA program are closed to Highway Administration continues to support cost- traffic. Bureaus. recovery on main *Bank loan to each province is 'Annual Reports of operation highways. recovered through tolls on main of main highways. *No unexpected natural highways. disasters occur (floods, earthquakes) Project Outputs (See Annex 1(a), I(b) and 1(c)) (Outputs to Developmient 1. Main highways expanded 1.1 687 km of high-grade 1.1.1 Monthly progress reports Objectives) and improved. highways (245 km in Inner by supervision teams. 1. Government at Central, Mongolia (IM), 97 km in Gansu 1.1.2 Quarterly progress Provincial, and local levels and 345 km in Ningxia) reports and annual monitoring remains committed to constructed and/or improved to reports. project. MOC standards by 2003. See 1.1.3 Reports by Bank's 2. Traffic grows at Annex 2. supervision missions. expected rates on Toll 1.1.4 Disbursements to Roads. contractors. 3. Toll roads attract expected traffic volumes 2. Rural Roads (RIPA) 2.1 1,892 km of rural roads in 2.1.1 Quarterly progress from existing parallel upgraded and expanded. selected poor counties reports and annual monitoring roads. constructed and upgraded in reports. 4. Price control accordance with approved 2.1.2 Reports by Bank's committees approve standards by 2000 (836km in IM, supervision missions. proposed toll rates. 803km in Gansu, and 253 km in propose toll ats Ningxia). See Annex 3. 5. Traffic Polce and Communications Departments are enthusiastic about cooperative efforts. 6. Political pressures do not interfere with implementation plans and thus adversely affect I_quality of constructior[.  Project Appraisal Document Page 25 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Narrative Summary Key Performance Indicators Monitoring and Supervision Critical Assumptions and Risks 3. Provincial Communications 3.1 1998 persons for 2129 3. 1.1 Reports for rolling, two- 7. Trained staff Department staff trained. person/months (pm) from the year training programs apply acquired skills Communications Department 3.1.2 Project quarterly progress in the work place. and their institutes would be reports and annual monitoring trained within China and reports. abroad by 2003 (418 persons 3.1.3 Procurement reviews and in IM for 622p/m, 450 disbursements by Bank. persons in Gansu for 537 3.1.4 Reports by Bank's p/m, and 1130 persons in supervision missions. Ningxia for 970 p/m). See Annex 4. 4. Equipment and spare parts provided for operation and 4.1 Equipment and spare 4.1.1 Quarterly progress maintenance of highways, parts delivered by 2002 reports. quality control of according to reports on 4.1.2 Procurement reviews and construction, environmental equipment approved by the disbursements by Bank. monitoring, institutional Bank. 4.1.3 Reports of Bank's strengthening, and support of supervision missions. highway safety component. 5. Accident reduction program established and 5.1 Coordination 5.1.1 Letter from each province operational. mechanism established confirming establishment of between Traffic Police and coordination mechanism. Communications Department 5.2.1 Progress and final reports by May 31, 1998, 5.2 for accident analyses and Accident analyses and studies. studies carried out, Traffic 5.2.2 Final reports for safety Safety manuals developed manuals and pilot black spot program 5.2.3 Project quarterly progress implemented by 2002. See reports and annual monitoring Annex 5. reports. 6. Cost recovery mechanism 6.1. I Quarterly progress established and operational. 6.1 toll system implemented reports and operational by 2003. 6.1.2 Procurement reviews and 6.2 Study of tolls to be disbursements by Bank. completed 6 months prior to 6.1.3 Reports of Bank's opening of tolled roads to supervision missions. traffic. 6.2.1 Final report on study of tolls on the different toll roads. 7. Project coordination unit 7.1. I Quarterly progress for each province established 7.1 Project coordination unit reports. and operational. in each province functioning 7.1.2 Reports of Bank's throughout preparation and supervision missions. implementation of project and provided with necessary funds, staff, and logistical .__ __ _ __ _ __ _ __ _ support.  Project Appraisal Document P;age 26 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-15788) Narrative Summary Key Performance Indicators Monitoring and Critical Assumptions and Supervision Risks Project Components* (Activity to Output) 1.1 Contract civil works for main 1.1.1 Sign contracts with Bank reviews and 1. Being first time highways. contractors. clears related design borrowers and unfamiliar 1.1.2 Payments to and bid documents or with the Bank in Highway contractors. terms of reference projects will not delay and short lists of implementation. 1.2 Contract quality control teams 1.2.1 Sign contracts with consultants. Also, supervision teams. Bank reviews and 2. Sufficient counterpart 1.2.2 payments to comments on all funds available on time. supervision teams. reports for studies. 2.1 Contract civil works for RIPA 3. Timely approval by roads . 2.1.1 Sign contracts with Provincial and Central contractors. Government of Civil works 2.2 Establish supervision contracts, contracts for mechanism 2.2.1 Supervision teams are supervision of construction, operational. supply of equipment, and 3.1 Develop two-year training supply and installation of rolling programs. 3. 1.1 Skilled teams in each tolling, monitoring 3.2 Select candidates for training province have been formed telecommunications 3.3 Locate training institutes and are operational. systems. Work is physically done. 4. Little or no interference Supporting evidence by the local people in the includes submitted reports, acquisition of land for TOR, bid documents, signed temporary use of roads by contracts, etc. contractors, vehicles ancl 4.1 Revise/update lists of equipment. equipment. 4.2 Prepare specifications and bid 5. No major archeological documents finds during construction. 4.3 Sign and execute equipment supply contracts. 5.1 Form study teams for accident analyses and studies. 5.2 Identify and hire local and foreign experts. 5.3 Identify black spots, develop treatments and implement and monitor effectiveness. 5.4 Hire safety expert to evaluate implementation of safety program. 6.1 Design and prepare specificatio n and bid documents for tolling, monitoring telecommunications, power and lighting systems. 6.2 Contract works in 6.1. 6.3. Carry out toll study I t would be voluminous to list all the project components and inputs. What is shown in this section represents some of the key activities. See Annex 8 for the main steps in procurement and implementation of the main highways (civil works, supply and installation of electrical and mechanical works, and supervision of construction). Also, see Annex 3 for implementation of the RIPA component and Annex 5 for implementation of the safety component.  Project Appraisal Document Page 27 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 1(a) Monitoring Indicators - Inner Mongolia Table 1: Summary of Developmental Indicators Project Objective Key Performance Road Sections 1997 1999 2001 2002 2003 2005 2006 Indicators (Base Year) Existing Existing Existing Existing Proposed Existing Proposed Existing Proposed Existing Proposed Road Road Road Road Road Road Road Road Road Road Road AV PV 13|AVI4 PV AV PV AV PV AV PV A\ PV AV PV AV PV |AV PV AV PV AV To increase Average daily traffic Baotou-Dongsheng 7897 10263 12229 12729 12985 14280 15023 efficiency and ((mte/day) 1/ Baiyinchagan-Fengzhen 1335 1789 2399 _ 241 _ 2414 _ 274 2597 352 3008 399 _ 3238 _ safety of traffic Average driving speed 41 39 37 _ 37 90 __ 89 _ _ 88 _ (Km/hr.) Baiyinchagan-Fengzhen 37 35 33 46 75 46 74 46 73 46 72 Fatalities per 10 million Baotou-Dongsheng 7.9 8.0 8.1 8.3 3.5 401 3.01 37 2.81 vehicle-Kilometers Baiyinchagan-Fengzhen 7.0 7.1 7.2 _ 5.0 _ 151 4.5 4.4 __ _ 4. _ 1121 PV AV PV AV PV AV PV AV To promote GOVAI /2 (Billion RMBY) Baotou-Dongsheng 25.4 33.0 41.8 46.3 51.3 62.9 66.2 economic Corridor (BDH) I I_ development Baiyinchagan-Fengzhen 2.2 3.0 3.9 43 4.8 6 6.4 corridor (BFH) _ Total BDH and BFH 27.6 36.0 45.7 50.6 56.1 68.9 72.6 Corridors To provide Sum daily traffic (mte/day) RIPA 3696 4258 1 52241 6749 7425 8910 9800 improved access Sum of days roads are RIPA 779 470 2701 245 200 200 200 to poor counties closed to traffic _ _ Notes: /1. mte: medium truck equivalent /2 GOVAI: Gross Output Value of Agriculture and Industry /3 PV: Predicted (estimated) Value of indicator /4 AV: Actual Value of indicator  Project Appraisal Document Page 28 Couw"y: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 1(a) Monitoring Indicators - Inner Mongolia Table 2: Summary of Implementation Indicators Project Component Performance Indicators 1998 1999 2000 ____ 2001 ______ 2002 _____ 2003 Estimated Actual Estimated Actual Estimated Actual Estimated Actual Estimated Actual Estimated Actual 1. Main highways - Baotou-Dongsheng Highway (BDH) Cumulative % complete 0.5 28 55 80 93 100 - Baiyinchagan-Fengzhen Cumulative % complete 0.6 35 65 90 100 Highway (BFH) Subtotal (BDH and BFH) Cumulative % complete 0.5 31 581 83 95 100 2. RIPA Cumulative % complete 30 701 100 100 I 100 I 100 3. Equipment Cumulative % complete 20 65 85 95 100 100 4. Training Cumulative % complete 0 29 48 78 100 100 5. Highway Safety Cumulative % complete 10 40 70 90 95 _ 10 Project as a Whole Cumulative % complete 2 32 601 86 96 100  Project Appraisal Document Page 29 Country: China Project Title: Tri-Provincial Highway Project (CN-PE45788) Annex 1(b): Monitoring Indicators - Gansu Table 1: Summary of Developmental Indicators Project Objective Major Performance Segment 1997 1999 2001 2002 2003 2005 2006 Indicator (Base Year) Proposed Proposed Proposed Proposed NH 312 NH 312 NH 312 NH 312 Highway NH 312 Highway NH 312 Highway NH 312 Highway AV PV /3 AV/4 PV AV PV AV PV AV PV AV PV AV PV AV PV AV PV AV PV AV To increase Average daily traffic Liugouhe-Zhonghe 5274 7025 9357 4151 6651 4405 7105 4976 8027 5288 8532 efficiency and (mte/day) _1 Xujiamo-Jiepaicun 3778 4513 . 5723 2108 5154 2235 5489 2525 6200 2683 6590 safety of traffic Average driving Liugouhe-Zhonghe 32 30 30 34 75 33 74 33 73 33 73 speed (km/h) Xujiamo-Jiepaicun 33 33 32 36 65 36 75 36, 741 36 73_ Fatalities per 10 Liugouhe-Zhonghe 7.8 7.8 7.5 7.3 3.0 5.3 1.8 4.8 1.7 4.5 1.5 million vehicle-kms Xujiamo-Jiepaicun 7.3 7.3 7.0 6.7 3.5 5.0 3.0 4.6 2.8 4.3 2.6 .__________ _____________ ______._____ PV AV PV AV PV AV PV AV To promote GOVAI /2 Liugouhe-Jiepaicun 22.9 27.2 32.1 34.8 37.8 44.5 48.2 economic (Billion RMBY) Corridor development _ To provide Sum daily traffic First year package 1635 18231 2032 2144 2264 2523 2662 improved Volumes (mte/day) of RIPA . _ access to poor Sum of days roads First year package 332 332 0 0 0 0 0 counties are closed to traffic of RIPA Notes: /1 mte: medium truck equivalent /2 GOVAI: Gross Output Value of Agriculture and Industry /3 PV: Predicted (estimated) Value of indicator /4 AV: Actual Value of indicator  Project Appraisal Document Page 30 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 1(b): Monitoring Indicators - Gansu Table 2: Summary of Implementation Indicators Project Performance Indicators 1998 1999 2000 2001 2002 2003 Component Estimated Actual Estimated Actual Estimated Actual Estimated Actual Estimated Actual Estimated Actual 1. Main highways a. LZE Cumulative % Complete 20 40 68 89 100 b. XJH Cumulative % Complete 0 20 40 68 89 100 Sub-total 0 _ 20 40 68 89 100 2. RIPA Cumulative % Complete 30 60 90 100 100 100 3. Equipment Cumulative % Complete 0 10 38 67 90 _ 100 4. Training Cumulative % Complete 10 37 65 80 95 100 5. Highway Safety Cumulative % Complete 0 20 45 65 _ 85 100 Project as a whole Cumulative % Complete 1 22 41 69 90 100  Project Appraisal Document Page 31 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 1(c): Monitoring Indicators - Ningxia Table 1: Summary of Developmental Indicators Project Objectives Key Performance Segment 1997 1999 2001 2002 2003 2005 2006 Indicators (Base Existing Proposed Existing Proposed Existing Proposed Existing Proposed Year) _ _ Highway Highway Highway Highway Highway Highway Highway Highway PV /5 AV /E PV AV PV AV PV AV PV AV PV AV PV AV PV AV PV AV PV AV To increase Average daily GWH /3 1834 2381 3154 544 3088 724 3457 1320 4533 1451 4676 efficiency and traffic (mte/day) /1 YXH /4 745 950 1333 1470 1524 1742 1924 safety of traffic Average driving GWH 36 36 36 36 65 39 63 40 61 40 60 speed (Km/hr) YXH 30 29 45 62 _ 62 60 58 Fatalities per 10 GWH 4.2 4.3 4.9 3.2 1.3 3.0 1.11 2.6 0.9 2.5 0.8 million vehicle-Kms YXH 11.1 10.9 7.3 _ 6.0 _ 5.8 5.7 _ 5.5 PV AV PV AV PV AV PV AV To promote GOVAI /2 Lingwi- 1.4 1.7 2.2 2.4 2.7 3.3 3.8 economic (billion RMBY) Yanchi- development Tongxing Corridor To provide Sum daily RIPA - 1518 1670 1833 1925 2018 2220 2328 improved traffic (mte/day) /1 first year access to poor package counties Sum of days roads RIPA - 833 440 250 50 50 50 50 are closed to traffic first year package Notes /1 mte: medium truck equivalent /2 GOVAI: Gross Output Value of Agriculture and Industry /3 GWH: the proposed Guyaozi-Wangquanliang Highway /4: YXH: the proposed Yanchi-Xingren Highway, which is essentially an improvement (on same alignment) of existing road /5 PV: Predicted (estimated) Value of indicator /6 AV: Actual Value of indicator  Project Appraisal Document Page 32 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 1(c): Monitoring Indicators - Ningxia Table 2: Summary of Implementation Indicators Project Component Performance Indicators 1998 1999 2000 2001 2002 2003 Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual Planned Actual 1. Main Highways GWH Cumulative % complete 2.3 28 70 95 95 100 YXH Cumulative % complete 2.0 25 54 75 92 100 Sub-total 2.1_ _ 27_ _ 64 _ 87 94 100 2. RIPA Cumulative % complete 29 67 90 100 100 100 3. Equipment Cumulative % complete 8 13 48 85 _ 100 100 4. Training Cumulative % complete 15 50 70 90 100 100 5. Road Safety Cumulative % complete 0 25 51 74 95 100 Project as a Whole Cumulative % complete 3.0 29 _ 65 85 95 100  Project Appraisal Document Page 33 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 2 Detailed Description of Main Highways INNER MONGOLIA The main highways included under the project consist of the construction on new right-of-way of the Baotou-Dongsheng Highway (BDH) and the Baiyinchagan-Fengzhen Highway (BFH). BDH serves Baotau, the main industrial city in Inner Mongolia, as well as the extraction of minerals (especially coal) from the area south of Baotou towards Dongsheng and the very large Dalad power plant. BFH constitutes an important segment of the national trunk highway (no. 208) extending from Erlian in Inner Mongolia in the north to Taiyun (Shanxi Province), Xian (Shaanxi Province), Chengdu (Sichuan Province), Kunming (Yunnan Province) and Hekou in Yunnan Province. Baotou Dongsheng Highway (BDH) This road is about 103 km and consists of two segments. The segment from Baotou (Erdaoshahe) to Dongsheng North Interchange, totally 90.4 km, shall be to the Class 1 Highway standard for flat/rolling terrain. Of this segment, the 10.4 -km section from the starting point (PKO + 000) to Huajiangyingzi (PKIO +400) shall be upgraded to Class I standard with a subgrade width of 24.5 m; the 25.45-km Guanjiayingzi (PK 15 + 400)- Bainiyaozi (PK40 + 850) section and the 0.8-km section from PK89 + 600 to PK90 + 400 (Dongsheng North Interchange) will be newly built to class I standard with monolithic roadway. The other sections will be built into a class I motorway with separated roadways, one to be newly built with a subgrade width of 12.5 m, and another one to be built by upgrading the existing Class 2 highway. The segment from Dongsheng North Interchange to Buridu Bridge (Dongsheng Bypass), with a length of 10.86 km shall be to the regular Class 2 standard for flat/rolling terrain, and the subgrade width will be 12 m. This road also includes the construction of two linking roads. The 11.5km Machi Link Road shall be constructed to the regular Class 2 standard for flat/rolling terrain with a subgrade of 12 m. The 2.56km Dongsheng Link Road shall be built to the Class I Standard for flat/rolling terrain with a subgrade of 24.5 m. This highway will be operated as a toll road. It includes 5 interchanges, 2 toll stations, I service area, I parking area, 3 management offices (two of which will be in Baoutou) and supply and installation of electro-mechanical works (primarily tolling system). Baiyinchagan-Fengzhen Highway (BFH) This 142km highway serves one of the poorest areas of Inner Mongolia. The Baiyinchagan to Jining section with a length of 70 km shall be upgraded to Class 2 standard. The section from Jining to Fengzhen (provincial boundary with Shanxi Province) with a length of about 72 km will be constructed to a Class 2 Auto-Only standard. This highway will be operated as a toll road. It includes 3 toll stations, 1 road maintenance division in Jining, 3 maintenance offices (Baiyinchagan, Tuguiwula, Fengzhen), and a small amount of electro-mechanical works. In addition, a 4.4km Class 3 linking road would be constructed to Tuguiwula Township, a 0.8km Class 3 linking road would be constructed to Tuguiwula Township and a 0.8km Class 3 linking road would be constructed to Daliuhao. Supervision of Construction Based on the experience gained from on-going Bank-financed highway projects in Chinal a combined team of local engineers, technicians and other personnel and international consultants will supervise the above-mentioned, main highways. The organizational arrangements for the construction supervision as well as the Terms of Reference for the joint supervision team have been drawn up by the provincial Communications Department and found by the Bank to be adequate. The international experts would be integrated into the supervision organization with operational responsibilities and would help establish procedures at all levels of the supervisory work, including on-site inspections and laboratory testing. They  Project Appraisal Document Page 34 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) would also train local staff through formal training sessions and on the job. A total of 4 experts for a total of about 100 persons-months are envisaged for construction supervision of which 3 person-months are for training and 7 person-months are for contingencies, to be used as and when needed. GANSU The main highways included under the Gansu part of the Droject comprise construction of the Liugouhe-Zhonghe Expressway and the Xujiamo-Jiepaicun Class 2 Auto-only Highway. Both of these highways form an important section of the east-west national trunk highway (no. 310 and 312) extencding from Lianxyungang port on the China Sea in the East to Huoerguosi at the border with Kazakhastan in the West. Both the Central Government and the provincial government accord a higher priority to these roads. Liugouhe-Zhonghe Expressway (LZE) This 33.5km expressway with full control of access serves as a bypass to the city of Lanzhou (Capitol of Gansu Province) and provides 4 travel lanes in two carriageways with a subgrade of 21.5 meters and a design speed of 80 kilometers per hour. This expressway includes construction of four interchanges, 5 tolling stations, a service area, a management station for LZE and another one for administration of the high- grade highway from Liugouhe to Xujiamo to Jiepaicun-Gulang Highway as well as the supply and installation of a tolling, monitoring, telecommunications, power supply and lighting system. In order for the expected benefits of the expressway to be realized, it is essential that Tianshiulu linking road is extended about 1.8km to the south to connect with the existing street network of Lanzhou. The extension will have a subgrade of 42 meters and will provide 4 traffic lanes and two lanes for slow-moving traffic. The extension should be completed by the time the expressway and its linking road are compleled. The city of Lanzhou has provided a written commitment to the Bank that this extension will be constructed and completed on time. Xujiamo-Jiepaicun Highway (XJH) The 64 km Class 2 Auto-Only Highway with full-control of access provides two travel lanes on a subgrade of 12 meters (except 5.7km section from Xujiamo to Longquansi which has a 16.5 meter wide subgrade) and a design speed of 80km /hr. Also, it includes the construction of 4 interchanges, 5 toll stations, a management station and a service area. In addition, it involves supply and installation of a small tolling, power supply and lighting system. It will be operated as a toll road. To preserve a high and uniform standard of service along the Liugouhe-Jiepaicun Highway, i1l is essential that all capacity constraints (such as the tunnels) along the Zhonghe-Xujiamo existing highway are properly addressed and the necessary electrical and mechanical works are provided. Gansu will satisfy these requirements from its own funds. Supervision of Construction Supervision of the two highways in Gansu will follow the same set-up as presented for the main highways in Inner Mongolia. The joint international/local supervision team would include 5 international experts for a total of about 100 person-months. Of this total, 3 person-months are for training and 4 person- months are reserved as contingencies for special services or extensions of supervision services to be used when and as needed.  Project Appraisal Document Page 35 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) NINGXIA The main highways included under the Ningxia part of the project are the Guyaozi-Wangquanliang Class I Highway (GWH) and the Yanchi-Xingren ordinary Class 2 Highway (YXH). GWH is part of a national trunk highway - extending from Yinchuan to Taiyuan (Shanxi Province), Jinan and the port of Qingdao (Shandong) on the East China Sea. Both the Central Government and the Provincial Government attach great importance to this highway as a part of the NTHS. Also, it serves a very important traffic corridor in Ningxia as well as the rich coal and petroleum resources in the southeast of Ningxia. YXH is an important east-west provincial highway and serves the poor counties along its alignment as well as those poor people who have been relocated from the poor mountainous areas in the south of Ningxia to the irrigated agricultural areas around Xiantoushi. Guyaozi-Wangqanliang Highway (GWH) This is a 94.0 Km high-grade highway to be constructed on a new right-of-way. The design standard for the 83.4km section between Guyaozi and Yanchi consists of a 4-lane Class I Highway subgrade but with the pavement for the two outside lanes only. The pavement for the remaining two lanes will be added in the future when the traffic volumes warrant such a widening. The 10.7km section between Yanchi and Wangquanliang will be constructed to Class 2 Auto-Only standard (2-lanes). The highway will be operated as a toll road. In addition to the road and bridge works, GWH includes a construction of a Yanchi, Gaoshawo mainline toll station, Yanchi mainline toll station and a Yanchi ramp toll station. A management center, a service area at Yanchi and a parking area at Gaoshawo and a service area at Guyaozi are planned to be constructed in the future. Furthermore, GWH involves the supply and installation of a tolling system and a power supply system. Linking Roads to GWH The project includes the construction of 4 linking roads to GWH with a total length of about 6.7km. These consist of a 0.5km connection between the end of GWH at Wangquanliang to the existing highway No. 307, a l.0km linking road to Yanchi, a 1.0km linking road to Gaoshawo, and 2 linking roads with a total length of 4.0km at Guyaozi. All of these linking roads will be constructed to Ordinary Class 2 road standard. Their works have been included in the design and bid documents for GWH. Yanchi-Xingren Highway (YXH) This highway serves the poor counties of Yanchi, Tongxin and Haiyuan agricultural areas including those inhabitants resettled from the poor areas in the southern mountainous region of the province to the Yellow River Pumping Project. The length of the road is about 250.5km and has an Ordinary Class 2 Standard and consists of three sections. The 82.5km section between Yanchi County town and Hui'anbu is to be upgraded from an existing Class 3 and 4 road. The 111.9km section between Hui'anbu and Taoshankou involves adding the wearing course to the existing road and building a 3.7km bypass around Hui'anbu Township. The 56.5km segment between Taoshanku and Haojiaji consists of rehabilitating the pavement of the existing road. Supervision of Construction Similar arrangements to those for Inner Mongolia and Gansu will be followed for the supervision of construction of the two main highways in Ningxia. The joint international/local supervision team would include 4 international experts for a total of about 99 persons-months. This total includes 4 persons-months for training of local staff and 9 persons-months for contingencies to be used when and as needed.  Project Appraisal Document Page 36 Countiy: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 3 Roads Improvement for Poverty Alleviation (RIPA) A. Project Development Objective The primary objective of the RIPA component is to help alleviate poverty, in the three regions/provinces, by providing and improving all weather access to villages and towns. The key issue iis to provide year round access to the rural population in the poor counties. Experience, with other Bank projects in China, Shaanxi and Henan, indicates that provision of basic access through all-weather roads and provision of non-motorized transport are contributing factors to reducing poverty in rural areas. RIPA component in the three regions/provinces: Inner Mongolia Autonomous Region (IMAR), Ningxia Hui Autonomous Region (NHAR), and Gansu Province (GP) focuses on the lower level roads in the poorest counties, which by definition have a significantly larger number of poor people than the province's and the country's as a whole. These roads should result in lower transport costs, ( for people and goods ) and provide all year access to the affected communities. Furthermore, this should improve access of rural people to social services such as education and health. In addition, the provision of such access would increase employment opportunities, particularly during the construction period and in maintenance. B. First Screening: Selection of Poor Counties In each of the Regions/Province :, all the counties designated as poor by the State and the Province/Region will be included for consideration possible RIPA projects. IMAR has 50 counties and banners designated as poor ( 31 by the state and 19 by the region ), NHAR has 11 of such counties ( 8 counties designated by the state and 3 counties by the region ) and GP has 49 such counties ( 41 state designated and 9 region designated ). The final selection of RIPA counties/banners, was done by the three Regions/Province, based on their own priorities and in conjunction with their socio-economic five year development plans. C. Second Screening: RIPA System Priorities RIPA system segments were chosen according to the following order of priorities: (a) Provide all weather access roads to all administrative villages and townships. These roads can be unclassified roads (not paved); (b) Improve existing drainage systems (culverts and bridges) and provide proper slopes (repair, strengthen and reconstruct unstable slopes); (c) Upgrade existing seasonal roads to all weather roads; (d) Upgrade existing all weather roads (from unclassified roads to class IV roads); (e) Rehabilitate and/or upgrade existing connections to the higher level (class IV to class III) highways. D. Third Screening: Selection of the RIPA Systems -The Initial Basket An initial basket of RIPA systems, which is subject to further cost effectiveness screening, was proposed based upon the following procedures: (a) Select the RIPA road segments in each targeted poor county according to the order of priorities listed above. (b) Combine the segments into RIPA systems based upon groupings of administrative villages amd townships, and the connections to the provincial/regional highway system.  Project Appraisal Document Page 37 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) E. Fourth Screening of RIPA Systems: Cost Effectiveness The Initial RIPA Basket which passed the third screening was screened for cost effectiveness based upon the following procedures: (a) Estimate the cost of each proposed RIPA system in the RIPA Initial Basket; (b) Estimate the population of the influence area of each system; (c) Calculate the cost effectiveness ration (per capita cost = cost of the system divided by the population of the influence area); (d) Adjust the cost effectiveness ratio (for comparative purposes) only for those road segments with unique and substantially high cost conditions such as mountain regions, rock excavation, river cosigns and major slopes; (e) The systems with the lowest adjusted cost effectiveness ratio will have the highest priority for further analysis (economic and social feasibility and benefit analysis ) and implementation; (f) Consider additional unique prevailing circumstances such as connectivity to other modes, impact on and of other road investments in the county and proximity to major networks; (g) The resulting RIPA Basket, after this screening, is the RIPA implementation Basket. All the RIPA systems in this basket will be subject to economic and social analyses. F. Fifth Screening: Analyses of Economic Benefits All proposed road segments were grouped into small road systems for analyses. Therefore they were not analyzed segment by segment. All of these roads need not be paved but must provide all weather access. The proposed systems can include unclassified (less than Class IV) roads, and classified roads ( Class IV and Class III). Where any new or rehabilitated Class III roads are proposed, they must not be stand-alone roads but must include other all weather access roads to poor areas. The expected minimum economic internal rate of return (EIRR) will be 9 percent. G. Sixth Screening : Analysis of Social Benefits Social benefits will include the following: (a) The total population of the influence area that will benefit from new all-weather road access (to villages and townships which currently have no road connections) and from upgrading of existing seasonal roads to all-weather access; (b) Benefits of all-year educational access to higher level schools in other townships (the number of students able to attend higher level schools in other township because of improved roads; (c) The number of days when the roads are closed or are not useable preventing access to education and health services in other towns and centers; (d) Benefits of improved access to health care facilities (the number of people able to access higher level clinics and hospitals in other townships all through the year); and, Reduction in the Food for Work Expenditures (Welfare Expenditure) because of increasing employment opportunities. H. Motorization, Motor Vehicles and required Road Systems Data on the number of motor vehicles (in different categories such cars, trucks, motorcycles, tractors) and non-motorized (NMT) vehicles (bicycles, rickshaws and carts) I the counties, which will have RIPA systems, was provided and evaluated. This information should be reviewed in the context of recent high growth of motorization in China. The primary purpose of this review is to assure that the type of road systems that are proposed (unclassified roads, class IV roads) fit with the trends in the motor vehicle and non-motorized vehicle population and their use. The standards of geometric and function design should be commensurate with the vehicle systems using the roads.  Project Appraisal Document Page 38 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-4'5788) I. Road Classification System It was agreed that MOC Standards for Highway Classification (PRC Ministry of Communications, Technical Standard's of Highway Engineering, 1995, Document #JTJ 01-88, PP 1-2) would be used for determining the level of road improvements. However, unique circumstances of connectivity and the economic importance of population centers served by the proposed RIPA systems where applicable will modify the final classification. The current MOC standards, based upon Average Daily Traffic expresses in Medium Truck Equivalents (MTE) are as follows: Class I Highways Higher than 5,000 ADT Class I Highways 2,000-5,000 ADT Class I Highways 200-2,000 ADT Class I Highways Less than 200 ADT may be paved Unclassified Highways Less than 200 ADT not paved J. RIPA Implementation Basket Based upon above-described screening procedures and analyses f costs aiid benefits, a RIPA Implementation Basket was developed. It is summarized in Table 1 below: Annex 3: Table 1: RIPA Implementation Basket Region/Province Total Length (Km) Total Cost (Y million) IMAR 836 157.4 Ningxia 253 60.2 Gansu 803 172.9 TOTAL 1887 390.5 K. RIPA Implementation Plans Based upon screening procedures, RIPA Implementation Plans were developed. Only those RIP'A systems that complied with all of the above screening requirements, were included in the Implementation Plan. These plans are shown in Tables 2 - 4. L. Processing of RIPA Packages Because of the size of the RIPA program in each province, it will be processed in annual packages with each package covering several systems/segments. Tables 2 - 4 summarize the first-year (1998) package in each of the provinces. Preparation of this package was checked by the Bank and found satisfactory from an economic, technical, social, and environmental points of views. The RIPA Implementation Packages for 1999 and 2000 will be processed according to the following procedures and analyses: (a) All RIPA systems to be implemented are required to be screened and analyzed for cost effectiveness including feasibility (economic and social benefits) analyses as described above. Only those systems yielding the agreed upon benefits and cost effectiveness ratios are to implemented; (b) Inner'Mongolia has completed all the analyses required by the Bank. They have chosen, with the concurrence of the Bank, to start implementation of all their chosen systems in 1998. The implementation plan is shown in Table 2. No further feasibility analyses are required; (c) Gansus's implementation plan is shown in Table 3. They have completed the feasibility analyses only for those systems to be implemented in 1998. It was agreed that Gansu will submit to the  Project Appraisal Document Page 39 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Bank socio-economic feasibility studies and summary reports, environmental and resettlement documents for 1999 systems by June 15, 1998 and for year 2000 systems by June 15, 1999; (d) Ningxia has completed the feasibility analyses for all their RIPA systems. Their implementation plan is shown in Table 4. No further feasibility analyses are required. However, environmental and resettlement documents would have to be submitted to the Bank: by June 15, 1998 for year 1999 systems and by June 15, 1999 for year 2000 systems. Annex 3: Table 2. RIPA Implementation Plan: Inner Mongolia System # Cost Length (Million Implementation Year County Segment # Km RMB) Improvement (Million RMB) 1998 1999 2000 Duolun 1-1 85 15.30 Upgr 89 km Uncl to 7.65 7.65 85 Km/IV Wuchuan 2-2 59 9.00 New Road. Cl IV 3.00 3.00 3.00 Darhan and 3-3 65 9.00 Upgr 73 km Uncl to 4.50 4.50 Muminggan 65 Km/IV Aohan 4-4 44 9.00 Upgr 49 km Uncl to 4.50 4.50 44 Km/EI Hexigten 4-5 98 13.50 Upgr 107 km Uncl to 4.50 4.50 4.50 98 Km/I Linxi 4-6 64 15.00 Upgr 73 km Uncl to 7.50 7.50 64 Km/Ill Bairin Right 4-7 75 12.00 Upgr 85 km Uncl to 4.00 4.00 4.00 75 Km/I Qahar Right, 5-8 71 12.00 New Road, Cl NV 4.00 4.00 4.00 Middle Huade, 5-9 62 15.00 Upgr 66 km UncI to 5.00 5.00 5.00 Shangdu 62 Km/Ill Shangdu 5-10 40 15.15 Upgr 45 km Uncl to 7.50 7.65 40 Km/Ill Hangjin 6-11 77 11.50 Upgr 86 km Uncl to 5.75 5.75 77 Km/Ill & IV Ejin Haro 6-12 40 10.00 Upgr 44 km Uncl to 3.50 3.50 3.00 Uxin 40 Km/IV Horqin 7-13 56 11.00 New Road, Cl IV 3.50 3.50 4.00 Right, Middle Total 7 Systems 836 157.45 64.90 65.05 27.50 13 Segments  Project Appraisal Document Page 40 Country: China Project Title: Tr-Provincial Highway Project (CN-PE-45788) Annex 3: Table 3. RIPA Implementation Plan: Gansu System # Cost, - Length Million County Segment # Km RMB Improvement Implementation Year, Million RMB 1998 1999 2000 Tianzu IA 17.1 2.44 Upgr Uncl to V 2.44 Gulang 1B 13.7 2.74 Upgr IV to III 2.74 Jingtai 2A 25.4 3.47 Upgr Uncl to III 2.00 1.47 Pingchuan 2B1 24.7 6.70 Upgr Uncl to III 3.30 3.40 Jingyan 2B2 26.1 7.80 Upgr IV to III 4.40 3.40 Jingyan 2C 34.5 7.52 Upgr IV to III 4.52 3.00 Lintao 3A 21.0 6.40 Upgr Uncl to III 4.40 2.00 Weiyuan 3A2 24.0 6.56 Upgr Uncl to III 3.56 3.00 Longxi 4A 60.0 8.91 Upgr IV to II 5.50 3.41 Zhangxian 4B 31.4 8.10 Upgr Uncl to IV 4.10 4.00) Zhuanglang 5 12.6 3.50 Upgr Unci to III 2.00 1.51) Qingyang 6A 39.0 11.90 Upgr IV to III 11.9( Huachi 6B 56.4 8.59 Upgr IV to III 8.59 Hezheng 7A 43.5 8.50 Upgr Unci to III 4.50 4.00 Jishishan 7B 29.0 8.40 Upgr IV to III 4.40 4.00 Guanghe 7C 22.3 3.70 Upgr IV to III 2.00 1.7CI Lingtan 8AI 15.0 3.30 Upgr Uncl to TV 2.30 1.00 Zhuoni 8A2 98.5 21.59 Upgr Uncl to III 11.00 10.59 Tongwei 9A1 23.0 6.28 Upgr IV to III 6.28 Gangu 9A2 40.0 9.80 Upgr TV to III 9.80 Tanchang IOA 24.9 4.30 Upgr Uncl to IV 4.30 Kangxian lOB 23.0 5.72 Upgr Uncl to III 4.72 1.00 Lixian IOC 56.0 10.50 Upgr Uncl to IV 4.00 3.50 3.00 Weixian lOD 42.0 6.14 Upgr Uncl to IV 4.60 1.54 Total 10 Systems 803.1 172.86 22.80 64.02 86.04 24 Segments _  Project Appraisal Document Page 41 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 3: Table 4. RIPA Implementation Plan: Ningxia Cost, Length Million County System # Km RMB Improvement Implementation Year, Million RMB 1998 1999 2000 Haiyuan 2-2 15 3.00 Upgr Uncl to IV 3.00 Haiyuan 2-3 15 3.70 Upgr Unci to IV 3.70 Xiji 3-4 10 3.00 Upgr Uncl to IV 3.00 Xiji 3-5 16 4.00 Upgr Uncl to IV 4.00 Xiji 3-6 18 4.00 Upgr Uncl to IV 4.00 Xiji 3-7 15 3.30 Upgr Uncl to IV 3.30 Pengyang 4-9 18 5.50 Upgr Uncl to IV 5.50 Pengyang 4-11 8 1.60 Upgr Uncl to IV 1.60 Yanchi 5-12 20 3.00 Upgr Uncl to IV 3.00 Yanchi 5-13 13 2.10 Upgr Uncl to IV 2.10 Tongxin 6-14 35 9.00 Upgr Uncl to IV 9.00 Tongxin 6-15 30 9.00 Upgr Uncl to IV 9.00 Tongxin 6-16 40 9.00 Upgr Uncl to IV 9.00 Total 5 systems 253 60.20 16.60 25.50 18.10 13 segments 253 166  Project Appraisal Document Page 42 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 4: Institutional Strengthening and Training Table 1: IST Components by Organization to be Strengthened Training (in person/months) Total Total Total IST Province or Autonomous Region / Organization In In Abroad Study Training Equipment in RMB in US$ Province China Tours INNER MONGOLIA AUTONOMOUS REG. 122 360 99 41 13,460,409 32,109,007 45,569,416 5,490,291 Communications Department 8 61 0 13 1,418,137 14,393,510 15,811,647 1,905,018 Project Office 114 110 45 13 5,345,237 2,927,000 8,272,237 996,655 Research Institute 0 58 15 4 1,826,296 4,259,997 6,086,293 733,288 Highway Administration Bureau 0 59 24 4 2,505,596 1,035,500 3,540,596 426,578 Toll Collection and Inspection Bureau 0 40 9 3 1,177,147 7,384,000 8,561,147 1,031,463 Communications Technical School 0 32 6 4 1,187,996 2,109,000 3,296,996 397,228 GANSU 333 111 52 41 8,358,909 9,045,029 17,403,938 2,096,860 Provincial Communications Department 24 21 0 11 1,021,839 640,000 1,661,839 200,222 Project Office 75 23 22 8 2,561,492 3,345,003 5,906,495 711,626 Engineering Division 6 8 0 3 293,447 410,000 703,447 84,753 Provincial Highway Bureau 35 23 3 7 983,243 850,003 1,833,246 220,873 Provincial Traffic Planning, Survey and Design Institute 43 17 9 4 1,181,396 1,050,012 2,231,408 268,844 Provincial Traffic Scientific Research Institute 53 11 7 4 936,296 1,130,000 2,066,296 248,951 Provincial Communications School 19 6 6 3 754,947 950,011 1,704,958 205,417 Traffic Engineering Construction Sprvsn Co. 78 0 5 1 612,249 600,000 1,212,249 146,054 Traffic Scientific Technical Telecomm. Ctr. 0 2 0 0 14,000 70,000 84,000 10,120 NINGXIA HUI AUTONOMOUS REGION 710 204 21 35 7,091,161 6,670,239 13,761,400 1,658,000 Ningxia Communications Department 36 1 0 14 1,131,886 1,984,000 3,115,886 375,408 High Class Highway Administration 298 81 20 10 3441,270 2,214,590 5,655,860 681,429 Spec.School of Comm./Technical School 30 19 0 2 345,898 793,383 1,139,281 137,263 Highway Survey and Design Institute 50 32 0 3 578,830 1,678,266 2,257,096 271,939 Research Institute of Communications 25 12 0 1 186,466 0 186,466 22,466 Quality Supervision Center for Highway Works 6 4 1 1 165,515 0 165,515 19,942 Rureaut of Highwa,y Administra.ti^ 175 30 0 2 727,398 0 727,398 87,638 Bureau of Highway Construction 90 25 0 2 513,898 _ 0 513,898 61,915 TOTAL 1,165 675 172 117 28,916,953 47,823,775 76.74n,728 9,245,871  Project Appraisal Document Page 43 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 4 Table 2: Training by Subject and by Province/Autonomous Region (Person-Months) Local and in China Abroad & Stud Tour Totals to be Trained Trainin Y1-Y2 Subject Areas for Trainingl l Y l Subject_Areas_for_Training _ IMCD GPCD NHCD IMCD GPCD NHCD IMCD GPCD NHCD IMCD GPCD NHCD Highway Project Management 0 5 10 2 3 4 0 8 14 1 8 14 Highway and Bridge Engineering 41 40 23 17 13 65 57 13 15 27 6 Highway Planning and Design 21 2 0 12 4 0 32 6 0 3 6 0 Testing and Inspection of Highway Works 20 66 3 0 0 23 66 4 0 0 Road Maintenance and Management 32 6 123 16 7 0 48 13 123 0 0 0 Transportation Management 8 4 0 3 2 0 11 6 0 0 0 0 Traffic Engineering 6 18 24 6 7 6.7 12 25 30 5 20 0 Financial Management 9 27 35 1 2 3.3 10 29 38 0 29 0 Highway Machinery 13 18 100 4 0 0 17 18 100 0 18 0 Computer Skills 18 34 200 0 0 0 18 34 200 6 0 0 Management of Training organization 22 10 0 11 6 6 33 16 6 17 16 6 English Language 100 39 54 24 18 0 124 57 54 124 51 54 Materials Testing and Equipment Mngmt 2 0 12 0 0 2 0 12 0 0 12 Economic Analysis of Projects 34 22 5 3 0 0 35 22 5 5 0 0 Organization and Construction Supervision 90 100 4 15 0 6 105 100 0 105 100 Operations Mgmt of High Grade Highways 40 0 10 12 2 0 54 2 10 13 0 0 Resettlement 15 20 30 4 0 0 19 20 30 11 20 30 Road Traffic Safety 67 68 30 2 3 2 69 71 32 21 77 32 RIPA 10 4 14 0 0 Environmental Protection and Monitoring 24 16 9 2 3 0 26 19 19 5 19 19 Project Management and Supervision 20 5 96 2 0 21 22 5 117 0 0 109 Procurement 5 5 0 0 4 0 0 TOTAL 482 444 914 140 93 56 622 537 970 248 396 382  Project Appraisal Document Page 44 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 5 Highway Safety and Improvement General 1. The traffic safety situation in Gansu, Inner Mongolia and Ningxia Hui Autonomous Region (as in other provinces in China) is serious. During the past few years almost 3,000 persons per year were ki lled by traffic accidents in these provinces. The number killed per 100,000 persons (5.7) is not high and is comparable with rates of developed nations, but the number killed per 10,000 vehicles (25.4) is very high and is at least 10 times higher than the rate of Western Europe and North American countries. Also, the severity rate (defined as the number killed divided by the number of killed and injured) is high. the situation is expected to get worse unless some appropriate actions are taken because of the fast pace of increase in vehicles and because China is in the early stages of motorization. 2. Due to the alarming safety situation, the Bank engaged the services of one safety expert under the Finnish Trust Funds. The expert studied the topic, identified the problems and defined a reasonable, but modest road safety component for inclusion in the proposed project for tackling the road safety problem. Institutions Involved 3. The Traffic Police General Team of Public Security Bureau (Police) and the Provincial Communications Department are the main institutions involved in road safety work in all of the three provinces. The traffic police is responsible for vehicle testing and licensing, driver training and testing, law enforcement and education as well as collection and treatment of accident data. Quite often, the Police even take care of the transport of injured persons to the hospitals. The Provincial Communications Departments (PCD) are responsible for design, construction and maintenance of highways as well as installation and maintenance of road traffic signs and markings. Cooperation between the traffic Police and Communications Department is not strong and rieeds strengthening in all three provinces. Proposed Highway Safety Program 4. All three provinces are first-time borrowers from the Bank in the highway area, which means ithat they are not familiar with Bank procedures and work methods. Also, all three provinces are relatively poor, inland provinces with limited institutional capacity in the highway area. The proposed project is relatively complex and has many components. Moreover, experience in the highway safety component in past Bank-financed highway projects has shown the difficulties facing implementation of this component when joint action was required by both the traffic police and the communications department. Consequently, it was agreed with the three provinces that the project would include a relatively small safety component which centers on actions and improvements which are primarily within the domain of the provincial communication departments. The agreed safety component consists of the following: (a) Limited actions to increase cooperation between the traffic police and the communications departments; (b) Analysis of traffic accidents and study by Inner Mongolia of the safety effects of different highway design features; (c) Pilot program for treatment of accident black spots; (d) Development of traffic safety manuals; (e) Development of safety audit procedures; (f) Provision of equipment, technical assistance, and training to support the above-mentioned activities; and (g) Evaluation of the implementation of the safety component by an independent local expert.  Project Appraisal Document Page 45 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Policy Level Traffic Safety Cooperation 5. A high-level, traffic safety coordination or leading group will be established in each province to improve cooperation between Traffic Police and the Communications Department as follows: (a) Gansu: A high-level, Traffic Safety Leading Group was established in May 1997; (b) Inner Mongolia: The Production Safety Committee will, under the lead of the Deputy Chairman of the Province, pay special attention to cooperation in the traffic safety field. If that doesn't succeed, the Traffic Police and Communications Department will establish a regular traffic safety policy coordination group; (c) Ningxia Hui Autonomous Region: A Road Traffic Safety Leading Group was established in May 1998. 6. The tasks of the above mentioned coordination groups will be mainly to: - Raise the awareness of traffic safety; - Discuss and solve important policy level traffic safety problems; - Follow up the development of traffic safety and decide on major remedial actions; - Improve cooperation among parties involved in traffic safety work. 7. Traffic Safety Secretariat Services will be provided in each province by a group of 4 to 5 persons working for the Communications Department. The Secretariat should be lead by a traffic safety expert. The Secretariat will prepare a safety related material to improve traffic safety awareness and knowledge, help arrange and prepare the required documents for the Coordination Group meetings and to help coordinate the traffic safety component of the Tri-provincial Highway Project. Accident Analyses 8. Accident data is gathered and analyzed by the traffic police. Although the Communications Departments can get the accident information they need from the police, the accident information they have received has been limited. Little analyses of the collected data have been made and it was agreed that the Police will grant access to it's accident database for the last three years to the Communications Departments so that the latter can analyze all the relevant data. TOR for this work have been prepared and are available in the project file. The main purposes of the analysis of the accident data are to: (i) study the main characteristics of the accidents in order to help determine priority areas in traffic safety and devise appropriate strategies and measures to reduce traffic accidents; (ii) help identify traffic accident black spots and help devise a pilot program for treatment of such spots; (iii) increase cooperation and exchange of information, between the Traffic Police and the Communications Departments. Study of the Effect of Highway Design Features on Highway Safety 9. Inner Mongolia will carry out a study of the safety effects of different highway design features based on the available accident data, physical data on highways as well as traffic volumes. The terms of reference for this study, the required personnel and equipment, related cost estimate and implementation schedule were agreed with the Inner Mongolia Communications Department and are available in the project file.  Project Appraisal Document Page 46 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Black Spot Treatment Pilot Program 10. Systematic Black spot improvements have proven to be an effective way of conducting traffic safety work in many industrialized countries. Black spot improvements have been successfully used in many countries and good expertise is abundant. It is very important and cost effective to learn as much as possible from those countries that have used the method systematically for a long time. 11. It was agreed that a pilot black spot program would be carried out in all three provinces. For this purpose, a special black spot group will be established in each province and trained. The group should be initially trained by a Chinese and an international consultant for about one month during it's first and second years. During the third and fourth years, the consultants should return for a half month to make sure the quality of the work is adequate and provide guidance as needed. The three provinces have agreed to use the same international expert(s) for this task inorder to reduce the related effort and cost. Accordingly, each province would need about 1.5 person-months of international expert effort, for a total of 4.5 person-months for the project. 12. For the analyses of black spots and their traffic, the group will be provided with the necessary equipment (vehicle, photo and video cameras, scanner, speed radar and computers with printers). 13. The black spots will be identified on the basis of the analyses of the accident data (para. 8). 'rhe work will be carried out as an experiment with control sites. About 25 black spots will be identified in Ningxia and about 50 in each of Gansu and Inner Mongolia. Out of these, 12 will be selected at ranclom for treatment in Ningxia and about 24 in each of Gansu and Inner Mongolia. 14. A special budget will be reserved for the implementation of the proposed improvements. Ningxia agreed to allocate about Y2. 1 million for the pilot program, Inner Mongolia Y4.8 million and Gansu Y5.1 million. These budgets are based on a cost of about Y170,000-200,000 per treated place. 15. The black spot work is expected to be initiated in 1999 and to be completed within four years (around end of 2002). After completion of the pilot program, the black spot work will be continued as a part of normal traffic safety work of the Maintenance Section at the Prefecture level of the Communications Department on a permanent basis. The personnel who participated in the pilot black spot work will be responsible for the training of the relevant personnel at the prefecture level. Traffic Safety Manuals 16. Three Highway Safety manuals will be prepared. Gansu will be responsible for the "Highway Maintenance Safety Manual", Inner Mongolia for the "Highway Design Safety Manual" and Ningxia for the "Highway Construction Safety Manual". A small manual production group will be established in each province to prepare the manual. The provinces will cooperate closely in their work. Help from Chinese and international experts will be provided. About 1 person-month by an international expert will be needed by each province, or a total of 3 person-months for the three provinces. The group(s) will be provided with a computer with connection to the Internet to facilitate access to information from other countries. Development of Safety Audit Procedures 17. It has been seen in industrialized countries that despite detailed road design manuals, new road plans do not meet all the requirements of safety. Many countries are now introducing what is called safety audits of new road plans. This work consists of the development of a number of check lists and guidelines that explain how to check road design to ensure that the roads do not contribute to the occurrence of accidents.  Project Appraisal Document Page 47 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) 18. It was agreed that such safety audit procedures shall be developed by the Gansu Provincial Communications Department. In this regard, the Gansu province should avail itself of the safety audit work carried out or to be carried out under the Bank-financed Shanghai-Zhejiang Highway Project (Loan 3569-CHA) and the Second Henan Provincial Highway Project (Loan 4027-CHA). This work will also include a detailed plan for introducing safety audit procedures in highway work in Gansu province. Evaluation of Traffic Safety 19. To ensure the effectiveness of the Traffic Safety Component, an independent Chinese expert will evaluate the safety component and propose needed corrective actions for the future. This will be completed in each of the three provinces. The results of the evaluation will be documented in a report by each province to be submitted to the Bank for review and comment. Costs of the Traffic Safety 20. Costs of the traffic safety program divided by component and implementation year are presented in Tables 1, 2 and 3 for Inner Mongolia, Gansu and Ningxia, respectively. Table 4 presents the cost summary of all three provinces combined. The overall cost of this component in all three provinces is about Y19.5 million ($2.4 million) or about 0.3% of the total cost of the project. Timetable 21. The implementation schedule of the various elements of the highway safety component are presented in Tables 5, 6, and 7 for Inner Mongolia, Gansu and Ningxia, respectively. The program will be implemented over 4 years, starting in 1999 and ending in 2003.  Project Appraisal Document Page 48 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 5: Table 1: Implementation costs by year in Inner Mongolia Autonomous Region Distribution of costs by year of Costs in 1000 Yuan implementation Type of use Item Year 1 Year 2 Year 3 Year 4 Total Personnel 1 30 30 30 30 120 2 30 30 3 20 40 40 40 140 4 50 50 100 5 50 50 50 50 200 SUBTOT 130 170 170 120 590 Personnel Chinese 3 10 10 9 5 34 experts 4 7 7 14 5 75 75 75 75 300 6 60 60 SUBTOT 85 92 91 '140 408 Chinese Foreign 3 170 170 85 85 510 experts 4 85 85 170 5 85 85 85 85 340 SUBTOT 255 340 255 1170 1,020 Foreign Personnel 1 7 49 7 7 70 training 3 72 25 72 25 194 4 5 5 5 5 5 SUBTOT 89 74 79 32 274 Personnel Equipment 2 50 50 3 570 39 609 4 40 40 5 50 50 SUBTOT 620 129 0 0 749 Equipment Black spot 3 484.4 968.8 1,453.2 1,937.6 4,844 Black spot implementation (Division 10 % 20 % 30 % 40 %) GRAND TOTAL 1,663.4 1,773.8 2,048.2 2,399.6 7,885 _ Distribution of costs by item Item 1998 1999 2000 2001 Total Item COSTS BY 1 37 79 37 37 190 Leading group ITEMS 2 80 0 0 0 80 Acc.analysis 3 1,326.4 1,252.8 1,659.2 2,092.6 6,331.0 Black spot 4 5 182 142 0 329 Manual 5 215 260 210 210 895 Effect study 6 0 0 0 60 60 Evaluation TOTAL 1,663.4 1,773.8 2,048.2 2,399.6 7,885 _ _  Project Appraisal Document Page 49 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 5: Table 2: Implementation costs by year in Gansu Distribution of costs by year of implementation Costs in 1000 Yuan Type of use Item Year 1 Year 2 Year 3 Year 4 Total Personnel 1 30 30 30 30 120 2 30 30 3 20 40 40 40 140 4 50 50 50 150 5 10 10 10 10 40 SUBTOT 140 130 130 80 480 Personnel Chinese 3 10 10 9 5 34 experts 4 7 7 14 5 14 14 14 14 56 6 60 60 SUBTOT 24 31 30 79 164 Chinese Foreign 3 170 170 85 85 510 experts 4 85 85 170 5 0 0 0 0 0 SUBTOT 170 255 170 85 680 Foreign Personnel 1 7 49 7 7 70 training 2 8 7 0 0 15 3 72 25 72 25 194 4 7 7 5 6.5 50 5 5 66.5 SUBTOT 100.5 131 84 37 352.5 Personnel Equipment 2 50 50 3 570 39 609 4 40 40 5 0 SUBTOT 620 79 0 0 699 Equipment Black spot 3 509.5 1018.9 1528.4 2037.8 5094.5 Black spot implementation (Division 10 % 20 % 30 % 40 %) GRAND TOTAL 1563.95 1644.9 1942.35 2318.8 7470 GRAND TOTAL Distribution of costs by item Item 1998 1999 2000 2001 Total Item COSTS BY 1 37 79 37 37 190 Leading group ITEMS 2 88 7 0 0 95 Acc.analysis 3 1351.5 1302.9 1734.4 2192.8 6581.5 Blackspot 4 57 182 142 0 381 Manual 5 30.5 74 29 29 162.5 Audit procedures 6 0 0 0 60 60 Evaluation TOTAL 1563.95 1644.9 1942.35 2318.8 7470 TOTAL  Project Appraisal Document Page 50 Country: China Project Title: Tri-Provincial Highway Project (CN-F'E-45788) Annex 5: Table 3: Implementation costs by year in Ningxia Hui Autonomous Region. Distribution of costs by year of implementation Costs in 1000 Yuan Type of use Item Year 1 Year 2 Year 3 Year 4 Total Institutional 1 60 60 60 60 240 strengthening 2 10 10 3 20 40 40 40 140 4 20 20 20 60 SUBTOT 110 120 120 100 450 Institutional Chinese 3 10 10 9 5 34 experts 4 4 5 5 14 5 19 19 SUBTOT 14 15 14 24 67 Chinese Foreign 3 170 170 85 85 510 experts 4 60 60 50 170 SUBTOT 230 230 135 85 680 Foreign Personnel 1 4.55 54.52 4.55 4.55 68.17 training 3 73.42 23.45 73.42 23.45 193.73 SUBTOT 77.97 77.97 77.97 27.99 261.90 Personnel Equipment 3 540 64 604 4 35 35 SUBTOT 575 64 0 0 639 Equipmient Black spot 3 205.21 410.42 615.63 820.84 2052.10 Black spot implementation (Division 10 % 20 % 30 % 40 %) GRANDTOTAL 1212.18 917.39 962.60 1057.84 4150 GRAND TOTAL Distribution of costs by item Item 1998 1999 2000 2001 Total Item COSTS BY 1 64.55 114.52 64.55 64.55 308.17 Leading group ITEMS 2 10 0 0 0 10 Acc.analysis 3 1018.62 717.87 823.05 974.29 3533.8 Black spot 4 119 85 75 0 279 Manual 5 0 0 0 19 19 Evaluation TOTAL 1212.18 917.39 962.60 1057.84 4150 TOTAL  Project Appraisal Document Page 51 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 5: Table 4: Implementation costs by year in all the three provinces, Inner Mongolia, Gansu, and Ningxia Hui Autonomous Region together Distribution of costs by year of Costs in 1000 Yuan implementation Type of use Item Year 1 Year 2 Year 3 Year 4 Total Institutional 1 120 120 120 120 480 strengthening 2 70 0 0 0 70 3 60 120 120 120 420 4 70 120 120 0 310 5 60 60 60 60 240 SUBTOT 380 420 420 300 1520 Institutional Chinese 3 30 30 27 15 102 experts 4 4 19 19 0 42 5 89 89 89 89 356 6 0 0 0 139 139 SUBTOT 123 138 135 243 639 Chinese Foreign 3 510 510 255 255 1530 experts 4 60 230 220 0 510 5 85 85 85 85 340 SUBTOT 655 825 560 340 2380 Foreign Personnel 1 19 153 19 19 208 training 2 8 7 0 0 15 3 217 73 217 73 582 4 12 0 0 0 12 5 12 50 5 5 72 SUBTOT 267 283 241 97 888 Personnel Equipment 2 100 0 0 0 100 3 1680 142 0 0 1822 4 35 80 0 0 115 5 0 50 0 0 50 SUBTOT 1815 272 0 0 2087 Equipment Black spot 3 1199 2398 3597 4796 11991 Black spot implementation (Division = 10 % 20 % 30 % 40 %) GRAND TOTAL 4440 4336 4953 5776 19505 GRAND TOTAL Distribution of costs by item Item Year 1 Year 2 Year 3 Year 4 Total Item COSTS BY 1 139 273 139 139 688 Leading group ITEMS 2 178 7 0 0 185 Acc.analysis 3 3696 3274 4217 5260 16446 Black spot 4 181 449 359 0 989 Manual 5 246 334 239 239 1058 Audit/Eng.study 6 0 0 0 139 139 Evaluation TOTAL 4440 4336 4953 5776 19505 TOTAL  Project Appraisal Document Page 52 Country: China Project Title: Tn-Provincial Highway Project (CN-PI-45788) Annex 5: Table 5: Implementation schedule by item in Inner Mongolia province. ACTIONS BY ITEM Year 1 Year 2 Year 3 Year 4 1. Safety Leading Group estabi. x........... ........................ ............ 1. High level safety group active ... x...x...x ...x... x...x ...x ...x .. .x ... x ...x ...x 1. Traffic safety secretariat active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 2. Accident data from police ..x ......... ............ ........ ............ 2. Accident analyses ..xxxxxxxxxx xx .......... ............ ............ 2. Reports .... .x........ ............ 3. Black spot work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 3. Black spot implementation .......... .... x ...x.x . x.x.x.x.x.x. xxxxxxxxxxxx 3. Reports ..x . x . .. x x . .. x x . .. x x 4. Traffic safety manual work active ............ xxxxxxxxxxxx xxxxxxxx. ............ 4. Reports ............ .. x...... x...x . .... X........... 5. Safety audit work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 5. Reports ..x ..x. x. x. x .x . x. x ... .x 6. Evaluation work active ............ ............ .. ... .. 6. Report ..... .. x.x Annex 5:Table 6: Implementation schedule by item in Gansu province ACTIONS BY ITEM Year 1 Year 2 Year 3 Year 4 1. Safety Leading Group estabi. x........... ........................ ............ 1. High level safety group active ..x..x..x..x ..x..x..x..x ..x..x..x..x ..x..x..x..x 1. Traffic safety secretariat active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 2. Accident data from police ... x........ ............ ........ ............ 2. Accident analyses ... xxxxxxxxx xxx ......... ............ ............ 2. Reports ..... . xx. x.x ..x.. ......... .. .. 3. Black spot work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 3. Black spot implementation .......... X. x . X ...x x. x.x.x.x.x.x. xxxxxxxxxxxx 3. Reports ..x x.... x.. . .. ....x x ... x x 4. Traffic safety manual work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxx. . xx ... 4. Reports ..x. x... .x .. .x ...x...x..x ........ 5. Safety audit work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 5. Reports ..x ..x. x.x . x . x ... x x . 6. Evaluation work active ..... xxx.. 6. Report ............ J ............ I............ I......... .x  Project Appraisal Document Page 53 Country: China Project Title: TN-Provincial Highway Project (CN-PE-45788) Annex 5: Table 7: Implementation schedule by item in Ningxia Hui Autonomous Region ACTIONS BY ITEM Year 1 Year 2 Year 3 Year 4 1. Safety Leading Group estabi. x........... ........................ ............ 1. High level safety group active ...x...x...x ...x...x... x ...x... . . x ... x... x. ..x 1. Traffic safety secretariat active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 2. Accident data from police ... x........ ............ ........ ............ 2. Accident analyses ... xxxxxxxxx xxx ......... ............ ............ 2. Reports ..... ..x..x . .................... ............ 3. Black spot work active xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx xxxxxxxxxxxx 3. Black spot implementation .......... X. x ...X. x. x.x.x.x.x.x. xxxxxxxxxxxx 3. Reports ..x . x..X .x. x.X ... x.. 4. Traffic safety manual work active ............ xxxxxxxxxxxx xxxxxxxx. ............ 4. Reports ............ .. ..... . .... xx ...x.x.x. 6. Evaluation work active . . . xxx.. 6. Report .. . .. x.x  Project Appraisal Document Page 54 Country: China Project Title: Tn-Provincial Highway Project (CN-Pl-45788) Annex 6-a Estimated Project Costs, All Three Provinces (4) February 1998 Prices ($1.00 = Y8.3) Local Foreign Total Local Foreign Total Foreign Costs Project Component -Y million - --- US $ million----- % of Total A. Works Main Highways Civil Works () 2079.8 1387.4 3467.2 250.6 167.1 417.7 40.0 Main Highways Electrical and 18.2 54.6 72.8 2.1 6.7 8.8 75.0 Mechanical Works (2) RIPA 274.6 274.6 33.0 33.0 Accident Black Spots 12.0 12.0 1.5 1.5 Subtotal 2384.6 1442.0 3826.6 287.2 173.8 461.0 37.7 B. Supervision of Construction 75.8 49.8 125.6 9.0 6.0 15.0 39.6 C. Equipment(3) 104.6 101.0 205.6 12.5 12.3 24.8 49.1 D. Training/Technical Assistance 6.5 24.7 31.2 0.8 3.0 3.8 79.2 Total Base Cost 2571.5 1617.5 4189.0 309.5 195.1 504.6 38.6 Physical Contingencies 246.2 148.9 395.1 29.7 17.9 47.6 37.7 Price Contingencies 408.6 219.7 628.3 49.2 26.4 75.6 35.0 Land Acquisition and Resettlement 256.8 256.8 30.9 30.9 Total Project Cost 3483.1 1986.1 5469.2 419.3 239.4 658.7 216.3 (1) Does not include Y106.9 million in taxes and duties. (2) Does not include Y4.7 million in taxes and duties. (3) Does not include Y39 million in taxes and duties. (4) Does not include interest and commitment charges on Bank's Loan during construction, estimated at about Y438 million.  Project Appraisal Document Page 55 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 6-b Estimated Project Costs , Inner Mongolia (5) February 1998 Prices: ($1.00 = Y 8.30) Project Component Local Foreign Total Local Foreign Total ------------Y million--------------- -------------US $ million-------- A. Works BDH Civil Works (1) 646.7 431.1 1077.8 77.9 51.9 129.8 Traffic Engineering (2) 4.6 13.8 18.4 0.5 1.7 2.2 Subtotal 651.3 444.9 1096.2 78.4 53.6 132.0 BFH (3) 171.3 115.2 286.5 20.7 13.8 34.5 RIPA 110.7 110.7 13.3 13.3 Accident Black Spots 4.8 4.8 0.6 0.6 Subtotal 938.1 560.1 1498.2 113.0 67.4 180.4 B. Construction Supervision BDH, BFH 26.7 16.8 43.5 3.2 2.0 5.2 RIPA 2.4 2.4 0.3 0.3 Subtotal 29.1 16.8 45.9 3.5 2.0 5.5 C. Equipment (4) 58.2 18.6 76.8 7.0 2.3 9.3 D. Training/TA 2.4 11.6 14.0 0.3 1.4 1.7 Total Baseline Cost 1027.8 607.1 1634.9 123.8 73.1 196.9 Contingencies Physical 96.7 57.7 154.4 11.7 6.9 18.6 Price 159.5 85.7 245.2 19.2 10.3 29.5 Subtotal 256.2 143.4 399.6 30.9 17.2 48.1 Land Acquisition and Resettlement BDH 55.8 55.8 6.7 6.7 BFH 22.3 22.3 2.7 2.7 RIPA 2.5 2.5 0.3 0.3 Subtotal 80.6 80.6 9.7 9.7 Total Project Cost 1364.6 750.5 2115.1 164.4 90.3 254.7 (1) Does not include Y34.7 million in taxes. (2) Does not include YO.4 million in taxes and duties. (3) Does not include Y7.9 million in taxes. (4) Does not include Y7.9 million in taxes and duties. (5) Does not include interest and commitment charges on Bank's loan estimated at about Y 119.0 million.  Project Appraisal Document PFage 56 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 6-c Estimated Project Costs, Gansu (6) February 1998 Prices: ($1.00 = Y 8.30) Project Component Local Foreign Total Local Foreign Total ------------------Y million----------- ------------------US $ million------ A. Works Liugouhe-Zhonghe Expressway Civil Works (1) 492.4 328.3 820.7 59.3 39.6 98.9 E & M (2) 11.2 33.5 44.7 1.3 4.1 5.4 Subtotal 503.6 361.8 865.4 60.6 43.7 104.3 Xujiamo-Jiepaicun Highway (XJH) Civil Works (3) 259.9 173.2 433.1 31.3 20.9 52.2 RIPA (4) 122.0 122.0 14.7 14.7 Accident Black Spots 5.1 5.1 0.6 0.6 Subtotal 890.6 535.0 1425.6 107.2 64.6 171.8 B. Construction Supervision LZE and XJH 27.0 16.6 43.6 3.2 2.0 5.2 RIPA 2.6 2.6 0.3 0.3 Subtotal 29.6 16.6 46.2 3.5 2.0 5.5 C. Equipment (5) 24.5 61.3 85.8 2.9 7.4 10.3 D. Training/TA 1.5 6.9 8.4 0.2 0.8 1.0 Total Baseline Cost 946.2 619.8 1566.0 113.8 74.8 188.6 Contingencies Physical 92.2 54.9 147.1 11.1 6.6 17.7 Price 152.7 82.2 234.9 18.4 9.9 28.3 Subtotal 244.9 137.1 382.0 29.5 16.5 46.0 Land Acquisition and Resettlement LZE 105.5 105.5 12.7 12.7 XJH 30.8 30.8 3.7 3.7 RIPA 21.1 21.1 2.5 2.5 Subtotal 157.4 157.4 18.9 18.9 Total Project Cost 1348.5 756.9 2105.4 162.2 91.3 253.5 (1) Does not include Y26.1 million in taxes. (2) Does not include Y1.3 million in taxes and duties. (3) Does not include Y13.0 million in taxes. (4) Does not include Y5.3 million in taxes and duties. (5) Does not include Y32.0 million in taxes and duties. (6) Excludes interest and commitment charges on Bank's loan estimated at about Y254 million.  Project Appraisal Document Page 57 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 6-d Estimated Project Costs, Ningxia (5) February 1998 Prices: ($1.00 = Y 8.30) Project Component Local Foreign Total Local Foreign Total -----------Y million------------ ------------US $ million----- ---- A. Works Guyaozi Wangquanliang Highway Civil Works (1) 337.3 224.8 562.1 40.6 27.1 67.7 Electrical and Mechanical (2) 2.4 7.3 9.7 0.3 0.9 1.2 Subtotal 339.7 232.1 571.8 40.9 28.0. 68.9 Yanchi-Xingren Highway (YXH) (3) 172.2 114.8 287.0 20.8 13.8 34.6 RIPA 41.9 41.9 5.0 5.0 Accident Black Spots 2.1 2.1 0.3 0.3 Subtotal 555.9 346.9 902.8 67.0 41.8 108.8 B. Construction Supervision GWH and YXH 16.2 16.4 32.6 1.9 2.0 3.9 RIPA 0.9 0.9 0.1 0.1 Subtotal 17.1 16.4 33.5 2.0 2.0 4.0 C. Equipment (4) 21.9 21.1 43.0 2.6 2.6 5.2 D. Training/TA 2.6 6.2 8.8 0.3 0.8 1.1 Total Baseline Cost 597.5 390.6 988.1 71.9 47.2 119.1 Contingencies Physical 57.3 36.3 93.6 6.9 4.4 11.3 Price 96.4 51.8 148.2 11.6 6.2 17.8 Subtotal 153.7 88.1 241.8 18.5 10.6 29.1 Land Acquisition and Resettlement GWH 12.4 12.4 1.5 1.5 YXH 6.0 6.0 0.7 0.7 RIPA 0.4 0.4 0.1 0.1 Subtotal 18.8 18.8 2.3 2.3 Total Project Cost 770.0 478.7 1248.7 92.7 57.8 150.5 (1) Does not include Y16.6 million in taxes. (2) Does not include Y3.0 million in taxes and duties. (3) Does not include Y8.6 million in taxes.. (4) Does not include Y7.7 million in taxes and duties. (5) Does not include interest and commitment charges on Bank's loan estimated at about Y65 million.  Project Appraisal Document Page 58 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 7-a Financing Plan, All Three Provinces ($ million) Three Central World Bank Total Provinces Government A. Works Main Highways - Civil Works 76.8 166.5 174.4 417.7 Main Highways - Electrical and 2.1 6.7 8.8 Mechanical Works RIPA 31.8 1.2 33.0 Accident Black Spots 1.1 0.4 1.5 Subtotal 111.8 168.1 181.1 461.0 B. Supervision of Construction 8.4 0.6 6.0 15.0 C. Equipment 12.5 12.3 24.8 D. Training/Technical Assistance 0.6 0.2 3.0 3.8 Contingencies 87.7 7.9 27.6 123.2 Land Acquisition and Resettlement 30.9 30.9 Project Total 251.9 176.8 230.0 658.7 Percent of Total 38.2 26.9 34.9 100.0 Annex 7-b Financing Plan, Inner Mongolia ($ million) Component Inner Central World Bank Total Mongolia Government A. Works Civil Works of BDH 47.2 32.9 49.7 129.8 Electrical and Mechanical Works of BDH 0.5 1.7 2.2 Civil Works of BFH 1.4 19.8 13.3 34.5 RIPA 13.3 13.3 Accident Black Spots 0.2 0.4 0.6 Subtotal 62.6 53.1 64.7 180.4 B. Construction Supervision 2.9 0.6 2.0 5.5 C. Equipment 7.0 2.3 9.3 D. Training/Technical Assistance 0.1 0.2 1.4 1.7 Contingencies 30.6 7.9 9.6 48.1 Land Acquisition and Resettlement 9.7 9.7 Total Cost 112.9 61.8 80.0 254.7 Percent of Total 44.3 24.3 31.4 100.0  Project Appraisal Document Page 59 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 7-c Financing Plan, Gansu ($ million) Component Gansu Central World Total Government Bank A. Works Civil Works of LZE 15.7 34.9 48.3 98.9 E&M 1.3 - 4.1 5.4 Civil Works of XJH 9.9 16.9 25.4 52.2 RIPA 14.7 14.7 Accident Black Spots 0.6 0.6 Subtotal 42.2 51.8 77.8 171.8 C. Construction Supervision 3.5 2.0 5.5 D. Equipment 2.9 7.4 10.3 E. Training/ Technical Assistance 0.2 0.8 1.0 Contingencies 34.0 12.0 46.0 Land Acquisition and Resettlement 18.9 18.9 Total Cost 101.7 51.8 100.0 253.5 Percent of Total 40.1 20.4 39.5 100.0 Annex 7-d Financing Plan, Ningxia ($ million) Component Ningxia Central World Bank Total Government A. Works Civil Works of GWH 1.2 41.6 24.9 67.7 E & M Works of GWH 0.3 - 0.9 1.2 Civil Works of YXH 1.4 20.4 12.8 34.6 RIPA 3.8 1.2 5.0 Accident Black Spots 0.3 0.3 Subtotal 7.0 63.2 38.6 108.8 C. Construction Supervision 2.0 2.0 4.0 D. Equipment 2.6 2.6 5.2 E. Training/ Technical Assistance 0.3 0.8 1.1 Contingencies 23.1 6.0 29.1 Land Acquisition and Resettlement 2.3 2.3 Total Cost 37.3 63.2 50.0 150.5 Percent of Total 24.8 42.0 33.2 100.0  Project Appraisal Document Page 60 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 8 Implementation Program A. Project Implementation Plan This annex presents the implementation program for the various components of the project in each of the three provinces. Table I summarizes the overall implementation schedule for the project as a whole. Table 2 shows the implementation schedule for the main highways* (two in each province) ancd the linking road to Luighouhe- Zhonghe Expressway in Gansu; administration and maintenance buildings, and service areas; and electrical and mechanical works. Table 3 depicts the detailed implementation schedule for the supervision of construction of the 6 main highways. These schedules show the estimated time requirements for construction activities as well as for preconstruction activities such as preparation of designs and bid documents, prequalification process, bidding process, evaluation of bids, negotiations and signing of contracts. Detailed schedules of these works are available in the project files (Procurement report for each province, the PIP for each province, Traffic Engineering Report for each Province, Equipment report for each Province and the Institutional Strengthening and Training Report for each province). Also, some additional details regarding implementation are available in the annexes to this report dealing with RIPA (Annex 3) and safety (Annex 5). *The main highways and their abbreviated names are: Ningxia: * Guyaozi-Wangquanliang Highway (GWH) * Yanchi-Xingren Highway (YXH) Inner Mongolia: * Baotou-Dongsheng Highway (BDH) * Baiyinchagan-Fengzhen Highway (BFH) Gansu: * Luigouhe-Zonghe Expressway (LZE) * Xujiamo-Jiepaicun Highway (XJH)  Project Appraisal Document Page 61 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 8, Table 1: Implementation Schedule 1998 1999 2000 2001 2002 2003 2004 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 GPN* Works 01/16/98 1. Main highways - Civil Works - roads & Con racts 5-6 YXH, Ninm xia bridges | |M 1MIIMIFIIIIIMIIIIIIIIIIIII I - GWH in Nir gxia, BFH in Inner 1ongolia Co tracts 7-9 YXH in N ngxia, BDH in Inner Mongolia and LZE +d XJH in Gansu - Civil Works - buildings and service areas Bl H in Inner Mongoli4 and LZE and XJH i , Gansu - Design, Supply and Install BDH in Inner 14ongolia and LZE ar d XJH in Gansu electrical and mechanical ___________________ 2. RIPA - First-year package lillO _ 3 - Second-year package IJ - Third-year package III _Evuation 3. Road Accident Black Spots _ = - ____ Supervision of Construction ,Inr'Al ..t f of Main Highways _____________-- Procurement of Equipment , - Operation and maintenance of | Illil IlI1 main highwaysI-- - Other equipment I . i.ilIlIlIi,IIIIll Environmental and upervision N4aintenance, Other Equi ment Training -:__ Highway Safety _ _ _ _ - - ___ Prequalification/preparation of bidding documents/TOR BDH: Baotou-Dongsheng Highway in Inner Mongolia GWH: Guyaozi-Wangquanliang Highway IilIIIIIWIIIIII Bidding process/competition among consultants BFH: Baiyinchagan-Fengzhen Highway in Inner Mongolia YXH: Yanchi-Xingren Highway Construction/supervision/delivery/execution of studies LZE: Lingouhe-Zhonghe Expressway in Gansu Defects liability period XJH: Xujiamo-Jiepaicun Highway in Gansu [=| Training/technical assistance/roadway safety  Project Appraisal Document Pagei 62 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 8: Table 2: Implementation Schedule for Construction of Main Highways A. Civil Works (6 Main Highways ICB plus linking road to Liugouhe-Zhonghe Expressway in Gansu (NCB) Prequalification Stage All 6 Main Highways Except Contracts 7-9 Contracts 7-9 of YXH in Ningxia of Yanchi-Xingren Hi2hwav in Nin2xia Publication of GPN in UN Development Business January 16, 1998 January 16, 1998 Preparation of PQ Documents February 28, 1998 January 31, 2000 No Objection to PQ Documents by Bank March 15, 1998 March 1, 2000 PQ Advertisement in China March 31, 1998 March 31, 2000 Deadline to Submit PQ Applications May 31, 1998 May 31, 2000 PQ Evaluation Report and Govemment Review June 30, 1998 June 30, 2000 Bank Review and No Objection to PQ Evaluation Report July 31, 1998 July 31, 2000 Bidding and Evaluation Stage Preparation and Review of bid Documents by June 30, 1998 May 31, 2000 Wilbur Smith & Associates Bank Review and no Objection to Bid Documents July 31, 1998 July 31, 2000 Sell Bid Documents to Prequalified Contractors August 1, 1998 August 1, 2000 Last Date to Receive Bids October 15, 1998 October 15, 2000 Bid Evaluation Report and Govemment Review November 15, 1998 November 15, 2000 Bank review and No Objection to Evaluation Report December 20, 1998 December 20, 2000 Negotiate and Sign Contracts January 15, 1999 January 15, 2001 Start Construction March 1, 1999 March 1, 2001 Complete Construction and Start November 30, 2000 for Contracts November 30, 2002 Defects Liability Period 5-6 of YXH in Ningxia; Nov. 30, 2001 for GWH in Ningxia and BFH in Inner Mongolia; Nov. 1, 2002 for BDH in Inner Mongolia and LZE and XJH in Gansu End of Defects Liability Period November 30, 2001 for contracts 5-6 November 30, 2003 of YXH in Ningxia; November 1, 2002 for GWH in Ningxia and BFH in Inner Mongolia; November 1, 2003 for BDHin Inner Mongolia and LZE and XJH in Gansu. B. Administration and Maintenance Buildings, Service Areas, Toll Plazas (NCB) Inner Mongolia, Gansu GWH in Ningxia Complete Preparation of Bid Documents March 31, 1999 March 31, 2000 Bank review and No Objection of Bid Documents April 30, 1999 April 30, 2000 (for prior review only) Invite Bids May 1, 1999 May 1, 2000 Last Date to Receive Bids July 1, 1999 July 1, 2000 Bid Evaluation Report and Govemment Review August 1, 1999 August 1, 2000 Bank Review and No Objection to Bid Evaluation October 31, 1999 October 31, 2000 Report (for Prior Review Only) Negotiate and Sign Contracts December 15, 1999 December 15, 2000 Start Construction March 1, 2000 March 1, 2001 Complete Construction and Start of Defects Liability Period November 1, 2002 November 30, 2001 End of Defects Liability Period November 30, 2003 November 30, 2002  Project Appraisal Document Page 63 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 8: Table 2: Implementation Schedule for Construction of Main Highways C. Electrical and Mechanical Works (ICB) BDH in Inner Moneolia LZE and XJH in Gansu GWH in Ningxia Finalize bid documents and submit to Bank March 1,2001 Nov 1,2000 October 31, 1999 No Objection to bid documents by Bank April 30, 2001 Dec 31. 2000 January 15, 2000 Issue Bid Documents May 15, 2001 Jan 15, 2001 February 1, 2000 Last Date to Receive Bids August 15, 2001 April 15, 2001 April 1, 2000 Bid Evaluation Report and Government Review November 15, 2001 July 15, 2001 June 1, 2000 Bank Review and No Objection to Bid Evaluation Report January 31, 2002 Sept 30, 2001 July 1, 2000 Negotiate and Sign Contract March 15, 2002 Nov 15, 2001 July 31, 2000 Establish Letter of Credit May 1, 2002 Jan 1, 2002 Start construction Joint Design June 30, 2002 Feb 28, 2002 on September 1, 2000 Manufacture and Purchase of Equipment October 1, 2002 June 1, 2002 Transport of Equipment to Site January 15, 2003 Sept 15, 2002 Installation and Commissioning May 31, 2003 Jan 31, 2003 Trial-Run of Systems October 31, 2003 June 30, 2003 Completion and Start of Defects Liability Period November 1, 2003 July 1, 2003 November 30, 2001 End of Defects Liability Period November 1, 2004 July 1, 2004 November 30, 2002 Annex 8: Table 3: Implementation Schedule for Supervision of Construction of Main Highways Submittal of Letter of Invitation, TOR and Short List of Consultants to Bank May 15, 1998 Bank Review and No Objection to LOI, TOR and Short List June 15, 1998 Issue LOI and TOR to Short Listed Consultants June 18, 1998 Last Date to Receive Proposals August 15, 1998 Complete Evaluation Report of Technical Proposals and Approval of Government September 15, 1998 Bank Review and No Objection to Report on Technical Evaluation October 15, 1998 Open Financial Proposals in Public November 7, 1998 Complete Financial Evaluation and Submit Overall Evaluation Report to Bank November 22, 1998 Bank Review and no Objection to Overall Evaluation Report January 7, 1999 Negotiate and Sign Contract January 10, 1999 Train Local Supervision Staff February 28, 1999 Start Supervision of Construction March 1, 1999 Complete Supervision of Civil Works Construction (1) November 1, 2002 Complete Supervision of Electrical and Mechanical Works (2) November 1, 2003 (1) Supervision of Construction of Civil Works (Excluding Defects Liability period) will be substantially completed by November 1, 2000 for Contracts 5-6 of YXH in Ningxia, Nov. 30, 2002 for Contracts 7-9 of YXH in Ningxia BDH in November 1, 2001 for GWH in Ningxia and BFH in Inner Mongolia; and Nov 1, 2002 for BDH in Inner Mongolia and LZE and XJH in Gansu. (2) Supervision of Design, Supply and Installation of Electrical and Mechanical works (excluding defects liability period) is expected to be substantially completed by Nov. 1, 2002 for GWH in Ningxia and July 1, 2003 for LZE and XJH in Gansu, and Nov 1, 2003 for BDH in Inner Mongolia.  Project Appraisal Document Page 64 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 9 Economic and Financial Evaluation Method of evaluation of benefits 1. The economic benefits of all six highways included in the civil works component of the project and which account for approximately 85 per cent of the total project costs, have been measured by estimates of the savings in vehicle operating costs and time savings to vehicle occupants. This method of measuring benefits is appropriate where the existing highway is, or likely to become, congested or whe.re the new highway offers a significant advantage in terms of quality and time of travel or savings in travel distances. These conditions apply to four of the six highways. No benefits were attributed to the additional economic growth that might occur as a consequence of implementing the project. 2. The evaluation method was based on a three stage modeling approach (trip generation, route assignment and evaluation). The usual third stage, modal split, was omitted as there was no viable alternative mode for most of the products transported, although for the Baotou to Dongshen highway some adjustments were made for the lack of railway capacity if the highway were not to be constructed. Each of the six sub-projects was evaluated independently of each other since there will not be any significant interaction between them. Project costs and economic benefits were measured in economic terms by the application of shadow prices and the elimination of taxes and subsidies from financial costs. The shadow prices used for casual labor and materials costs were different for each province and based on information provided by the provincial governments (data are available in the Feasibility Studies in the Project Files). On average, the economic costs were just under 80% of the financial costs. The economic evaluation was carried out using both the economic rate of return on social investment (ERR) and the net present value of costs and benefits (ENPV). 3. Two of the highways have expected economic and social benefits that are not well measured by the standard method. The Baiyinchagan to Fengzhen highway in Inner Mongolia and the Yanchi to Xingren highway in Ningxia both serve poor, rural communities and have a low present levels of traffic. The benefits of these proposed improvements are improved accessibility bringing an increased potential for agricultural and mining production, and improved access to health, education, and commercial facilities. Measurement of this increased potential output and the impacts of improved social and commercial accessibility is beyond the scope of the data available. Instead, a higher than average rate of traffic growth has been assumed for the local economies in both the with and without project situations as a simple proxy for these benefits. 4. In addition, a simplified economic and social evaluation of the first year program of RIPA projects has been completed. The estimate of economic benefits was based on an assessment of vehicle operating cost savings, while the social assessment took account of the number of very poor people living within the catchment areas of the roads to be improved, estimates of the expected increase in children attending school and people attending medical services, and the reduction in days of inaccessibility due to road closures. LEVEL AND TIMING OF INVESTMENT 5. For each of the six highways, a technical assessment was made of the optimum year for adding additional road space, based on the capacity of the existing highway and projections of traffic. Where there was doubt as to the standard of new road to be provided, an economic and financial assessment of the alternative standards and optimum opening year was also made.  Project Appraisal Document Page 65 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Level of tolls 6. With the exception of the Yanchi to Xingren highway, all those included in the project will be operated as toll roads. Two objectives need to be satisfied in setting the level of toll: (a) generating sufficient revenue to fund the amortization payments of the Bank loan (other sources of funds to finance the project are funded from existing user charges), and; (b) not deterring potential users from the toll road so that achievement of its economic objectives are not jeopardized. Since these are conflicting objectives, the final level of toll must be a comprise that does not necessarily entirely satisfy either of them. Analyses were made for each toll road of the level of diversion that might be expected from the existing highway to the toll road at different levels of toll, the impact of that level of diversion on the economic benefits and the ability of the revenue generated to fund the loan amortization charges. Exogenous parameters 7. The principal exogenous parameters that could affect project benefits are: the rate of economic growth and its impact on the demand for transport and the value of travel time savings; the propensity of users to divert from the existing to a new highway, and; the elasticity of that propensity to the level of tolls on the new highway. All of these parameters were tested through sensitivity analysis, with probabilities associated with the outcomes. Justification for investment 8. The Baotou to Dongsheng highway in Inner Mongolia connects two highly industrialized towns and already suffers high levels of congestion. The Liugouze to Zonghe expressway in Gansu will provide a relatively short (33km) by pass around Lanzhou (the provincial capital) and by taking out most of the through traffic relieve the already emerging urban congestion. The MOC considers the Lanzhou is a significant bottleneck on National Highway 312 which forms the Chinese section of the Eurasian landbridge. The Xujiamo to Jiepaicun highway in Gansu is also part of the National Highway 312 and the Eurasian landbridge and has traffic levels approaching its capacity. The Guyaozi to Wangquangliang highway in Ningxia is at present a low class road (Class III)) with relatively high volumes of traffic, but the main purpose of its upgrading is to provide an improved access between this inland and landlocked province and the coastal provinces and Pacific ports. It will form part of the new Qingdao-Yinchuan national highway, which when completed will provide a high-grade route more than 300 km shorter than the existing national truck route between Xinjiang and Gansu and the northern coastal provinces and seaports. Method of financial evaluation 9. The purpose of the financial evaluation is to determine whether the projected toll revenues will be sufficient to cover the amortization charges of the Bank loan. The amortization charges were estimated based on a standard repayment schedule for LIBOR-based single currency loans to China. The estimates of revenues available to service the loan charges were based on the net revenue projections for the toll roads (after allowing for maintenance and operations expenditures) to be financed through the loans. Only the Yanchi -Xingren Highway is proposed as a toll-free highway. Since this is an existing highway to be improved with the objective of stimulating economic growth in a poor region, with no alternative route available, it does not satisfy the conditions for tolling. The loan amortization charges for this highway would be covered by the revenues from existing road user charges.  Project Appraisal Document Page 1;6 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) EVALUATION RESULTS Level and timing of investment An optimization of the timing and scale of investment for each of the six principal highways included in the project was made. For two of the six highways included in the project, the optimun opening date will already have passed when the highway opens. For three others the optimum opening date is within a few years of that proposed. Only the Baiyinchagan-Jining highway has an optimum opening date much later than that proposed. However, the justification for this sub-project does not comle from the relied of traffic congestion on the existing highway, but rather from the provision of an adequate standard of highway to rural communities without adequate access. In respect of the scale of provision of highway, where there was only a small difference in ERR between construction of a four lane highway at the start of the project and staged construction, preference was given to the construction in a single stage, to realize the unquantified benefits of reduced accidents. Level and timing of investment of principal highway sub-projects Inner Inner Inner Ningxia Ningxia Gansu Gansu Province Mongolia Mongolia Mongolia Highway Baotou Baiyinchagan Jining Yanchi Guyaozi Xujiamo LiugouhIe Dongsheng Jining Fengzhen Xingren Wang'liang Jiepaicun Zhonghe Lengthkm 103.5 54 88 250.8 93.9 64.0 33.5 Present Class Class IIA Class IIB Class III Class III Class IIB Class IIB Proposed Class CG/M C2AO C2 C2 M2/1 C2AO Expressway Present Traffic mte/day 8,851 1,136 2,480 1,587 2,750 3,231 6,190 Present Capacitymte/day 9,045 3,514 5,610 2,636 3,664 4,768 5,496 Growth rate 1997/1992 14.49% 5.09% 5.07% 7.92% 7.04% 8.13% 9.76% 2000/1997 12.44% 6.64% 5.95% 13.49% 4.16% 7.12% 4.53% 2010/2000 3.88% 6.90% 7.49% 5.56% 11.51% 9.34% 6.39% 2020/2000 2.02% 4.64% 5.31% 5.76% 6.50% 3.13% 5.54% Year for Capacity 1998 2020 2009 2008 2003 2004 1995 Optimum opening 1998 2022 2005 2008 2003 2004 1995 Proposed opening 2001 2001 2001 2002 2001 2002 2001 Economic evaluation results 11. The estimated overall economic rate of return (ERR) for the project is 23.0% and the economic net present value (ENPV) is estimated at U$ 53.8 million, with the ERRs for each of the six components ranging from a low of 15.2% (Guyaozi to Wangquangliang) to a high of 42.5% (Yanchi to Xingren). This last sub-project has a much higher ERR than the others since it is an improvement to an existing roacd, with a much lower unit cost and but similar benefits per unit of traffic to the other highways. Almost half of the total ENPV comes from one project, the Baotou to Dongsheng Highway, although it accounts for only just over 22 per cent of the benefits. 12. The range of uncertainty surrounding these results is very different. The project with the highest ERR is the Yanchi to Xingren highway. It has a low sensitivity to construction risk (as it is improvement to an existing road) but a high sensitivity to demand projections (since its benefits depend on economic growth rather than on relief of congestion to existing traffic). The lowest ERR value (for the Guyaozi to Wangquangliang highway) is also associated with the lowest range of uncertainty of less than 6  Project Appraisal Document Page 67 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) percentage points. However, all six sub-projects show an acceptable expected ERR value in excess of 12% and positive values for expected ENPV, taking account of the estimated values with different assumptions for the three key variables (economic growth, construction cost and diversion rate to the new road). Only the lowest rated highway has a range of ERR results that includes some unacceptable values. The probability weighted ERR is slightly higher than the best estimate ERR at 23.2% Summary of Economic Evaluation of six highways Province Highway Best ERR range ENPV estimate % (U$ ERR% million) Inner Baotou to Dongsheng 32.6% 22.8% to 37.6% 272.2 Mongolia Baiyingchagan to Fengzhen 20.5% 15.0% to 27.6% 26.3 Ningxia Yanchi to Xingren 42.5% 25.2% to 48.5% 29.5 Guyaozi to Wangquangliang 15.2% 10.9% to 16.5% 28.4 Gansu Xujiamo to Gulang 21.1% 16.2% to 23.5% 126.2 Liugouhe to Zhonghe 17.0% 12.8% to 19.8% 55.9 Total 23.2% 18.8% to 27.0% 538.4 13. The ERR for the first year sub-projects in the RIPA component is 15.9% with a total ENPV of U$9.3 million. It is expected that sub-projects in later years will have similar values although the sub- projects will be rather different, with a higher proportion of bfits unquantifiable in monetary terms. The quantified benefits of all RIPA sub-projects represent only a small proportion of the total, the majority coming from improved access to education and health, which can be quantified but not valued. Summary of Economic and Social Assessment of RIPA Components Province Range of ERR% Average ENPV Extra Extra ERR% U$m Children people attending attending school health services Inner 13.0% to 19.4% 16.2% 5.9 Mongolia Gansu 9.4% to 25.1% 14.5% 2.5 128,069 Ningxia 14.8% to 15.8% 15.3% 0.9 404 642 Total 9.4% to 25.15 15.9% 9.3 _  Project Appraisal Document Page 68 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Financial evaluation results Well before the end of the fifteen year loan amortization period, all the projects would generate sufficient revenue to allow the provincial governments to repay the entirety of their loans, including those parts that are not directed to the construction of toll highways. However, during the construction period there will be loan commitment charges to be paid when no toll revenues would be available from the project highways. In the case of Ninxia, the toll revenues from the single toll road included in their sub-loan would not generate enough revenue to fully fund the loan amortization payments of the entire loan unilil 2007. The loan payments during construction would have to be met from other sources. The provincial highway accounts indicate that the revenues generated from other user charges, the Road Maintenance Fee and Vehicle Purchase and use Fees, would be sufficient for this purpose. While the whole system of highway user fees is currently under review, it is unlikely that any replacement system would leave the provinces with less revenue than at present. The continuing deficit in Ninxia could also be met from the revenues from these other charges, or it might be possible to negotiate an alternative repayment schedule for the total loan so as to allow an alternative repayment schedule for this province that takes account of the projected revenue stream. Level of tolls 2. The proposed level of tolls for each of the highways is shown below. A further study will be made for each toll road closer to the date of opening to determine the most appropriate level taking into consideration operation and maintenance costs. The current policy of each of the provinces is to revise the level of tolls at infrequent intervals, whereas it would be better in several senses for the level of tolls to be maintained in real terms (that is, allowing for inflation). These later studies of toll levels will investigate the most appropriate frequency for toll revision. Since the impact of tolls is different for each highway, the suitable level of tolls shows considerable variation between them. Tolls (US cents per vehicle km) Highway Cars and Buses Medium Large Average Pick-ups trucks trucks Baotou to Dongsheng Up to 2010 1.20 4.82 2.41 4.82 2.95 2011 to 2020 1.81 6.02 3.61 6.02 4.01 After 2020 2.41 7.23 4.82 7.23 5.06 Baiyinchagan to Fengzhen Up to 2010 1.20 4.82 2.41 4.82 2.68 2011 to2020 1.81 6.02 3.61 3.61 3.64 After 20202 2.41 7.23 4.82 4.82 4.61 Guyaozi to Wangquangliang Up to 2010 2.71 3.61 4.52 7.23 4.11 2011 to 2020 3.61 4.82 6.02 8.43 5.36 After 20202 4.52 6.02 7.53 9.64 6.61 Xujiamo to Gulang Up to 2010 2.77 5.42 2.41 4.82 2.95 2011 to 2020 3.37 6.63 3.61 6.02 4.01 After 20202 3.37 6.63 4.82 7.23 5.06 Liugouhe to Zhonghe Up to 2010 3.25 6.39 6.39 16.14 6.58 2011 to2020 4.10 8.19 8.19 20.60 8.41 After 2020 5.30 10.48 10.48 26.27 10.77  Project Appraisal Document Page 69 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 10 Procurement and Disbursement Arrangements Tables A and B: Procurement Arrangements Procurement under the project would be carried out as shown in Table A-a for the project as a whole (all three provinces), Table A-b for the Inner Mongolia part of the project, Table A-c for the Gansu part and Table A-d for the Ningxia part. The procurement arrangements for the project have taken into account the Bank's "Guidelines for Procurement under IBRD Loans and IDA Credits, January 1995", and revised in January and August 1996 and September 1997 as well as the experience gained from previous Bank-financed highway projects. The documentation, for procurement, which covers the prequalification of contractors, ICB and National Competitive Bidding (NCB) for civil works, ICB for goods, and consultant services contracts has been standardized for Chinese conditions in cooperation between the Chinese government and the Bank on the basis of model documents which would be used for all relevant procurement processes under the project where no model document exists, relevant Bank standard documents would be used. Works The civil works for the Baotou-Dongsheng Highway (BDH) and the Baiyinchagan-Fengzhen Highway (BFH) in Inner Mongolia would be divided into 6 contract sections and 3 contract sections respectively. The electrical and mechanical works for BDH (with the exception of power supply) would be bid later during construction as one contract. All of the above 10 contracts with a total cost of about $200.9 million would be procured under ICB procedures. The civil works for each of the Liugouhe-Zhonghe Expressway (LZE) and the Xujiamo- Jiepaicun Highway (XJH) in Gansu would be divided into 3 contract sections. The electrical and mechanical works (tolling, telecommunications, traffic monitoring) would be bid later during construction as one contract. All of the above 7 contracts with a total cost of about $167.6 million would be procured under ICB procedures. The civil works for the Guyaozi-Wangquanliang Highway (GWH) and the Yanchi-Xingren Highway (YXH) would be divided into 4 and 5 contract sections respectively. The toll system for GWH would be bid later during construction as one contract. All of these 10 contracts with a total cost of about $126.1 million would be procured under ICB procedures. The total cost of works (civil and electrical and mechanical) to be procured through ICB procedures in all three provinces is estimated at about $494.6 million. The above contracts for the civil works in each province would be bid on a slice and package basis; qualified firms would be allowed to bid for more than one contract so as to attract international contractors and large Chinese contractors. All contractors for all ICB contracts for civil works would be prequalified. The General Procurement Notice (GPN) for the project was published in the UN Development Business No. 478 on January 16, 1998. This GPN served as a specific procurement notice for the civil works contracts and for the consulting services required for the supervision of construction of the above-mentioned six highways which are being tendered during the first year of project implementation. For the electrical and mechanical works for LZE in Gansu, invitation to bid would be advertised as a specific procurement notice in the UN Development Business and/or well-known technical magazines, newspapers, and trade publications of wide international circulation. Domestic contractors competing under ICB would be eligible for a 7.5 percent price preference. Domestic contractors are expected to be competitive for all civil works contracts under this project. The 1.3 km Tianshuilu linking road to LZE in Gansu, including a large bridge across the Yellow River, with an estimated cost of about $12.5 million would be bid as one contract using NCB procedures. However, the contractors for this link would be prequalified. NCB was selected because of the short length of this link (1.3 km) and the need to coordinate its work with the 1.8 km extension of this link to connect with the Lanzhou street system. This extension is not a part of this project and it is to be constructed using local funds by the City of Lanzhou.  Project Appraisal Document Page 70 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Other works, including small service facilities (toll plazas, maintenance depots, service and rest areas, administrative buildings, etc., estimated to cost about $20.3 million ($5.0 million in Inner Mongolia, $11.6 million in Gansu and $3.7 million in Ningxia) would be awarded following NC]B procedures acceptable to the Bank. These would involve contracts estimated to cost less than $3.5 million per contract and consist of: one contract for buildings, service areas and toll stations for BDH and one contract for similar facilities for BFH in Inner Mongolia; two contracts for LZE and one contract for XJH in Gansu; and one contract for GWH in Ningxia. Also, the contract for lighting (with a total estimated cost of about $1.0 million) in Gansu would be awarded using NCB procedures. Since these contracts are small in value and scattered throughout each of the three provinces and would be implemented over a two-year period, ICB would therefore be neither justified nor practical, but foreign firms would not be precluded from bidding. The contract(s) for power supply at a cost of about $1.2 million in Gansu $0.9 milion in Inner Mongolia and $0.3 million Ningxia involves works scattered along LZE, XJH, BDH and GWH. They would be awarded by direct contracting with the local electricity companies, which are monopolies. Since no Bank moneys would be used for RIPA or accident black spots, procurement would be done according to local procedures. But, it was agreed that competition would be adopted. However, in case of small value contracts, or contracts in remote areas or areas with difficult topographic conditions, force account and direct contracting could be used. Equipment Generally, all contracts for goods and equipment costing more than $250,000 equivalent would be awarded under ICB. All other items or groups of items covering minor maintenance equipment, laboratories, highway safety, research and environmental protection purposes estimated to cost less than $250,000 per contract package, in an aggregate amount not exceeding $2.3 million ($0.7 million for Inner Mongolia, $1.4 million for Gansu and $0.2 million for Ningxia) would be procured following international shopping procedures on the basis of a comparison of price quotations solicited from at least three suppliers eligible under the Bank Guidelines for Procurement. These quotations should indicate the description and quantity of goods as well as desired delivery time and place. Domestic manufactures competing under ICB would be eligible for a margin of preference in the comparison of bids of 1S percent for goods, or the prevailing custom duties, whichever is lower. Consultants All consulting services will be procured in accordance with the provisions of the Bank's Consultant Guidelines published by the Bank in January 1997 and revised in September 1997. Consulting services for supervision of construction of the main highways in each province (costing $2.5 million in each province, or a total cost of $7.5 million in all three provinces) would be procured on quality and cost basis (QCBS).QCBS would also be used for contracts for training services each costingr more than $100,000. Single source selection would be utilized for contracts related to staff training ancl highway safety costing less than $100,000 per contract in the case of firms and less than $50,000 per contract in the case of individuals (Table B .1 of this Annex). Bank Review Prior review procedures would be used for:(a) civil works contracts with an estimated cost of $2 million (Y 17 million) or more; (b) equipment with an estimated cost of more than $250,000 per contract; and (c) consulting services with an estimated contract cost of more than $100,000 for firms and $50,000 for individuals. In the case of consultancy service contracts, all terms of reference and single-source: selections, regardless of the value of the contract, are subject to prior review. Prior review would apply to about 98 percent and 87 percent of the total contract values of works and goods financed by the Bank., respectively. For contracts below the above-mentioned limits, post-review procedures would be followed (Table B of this Annex).The sampling ratios for contracts not subject to prior review are about 50% for civil works and 25% for goods contracts.  Project Appraisal Document Page 71 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 10 Table A-a: Project Costs by Procurement Arrangements (All Three Provinces) (in US$million equivalent) Expenditure Category Procurement Method Total Cost ICB NCB Other(a) N.B.F(b) (including ___________ _____________ contingencies) Works High Grade Highways Civil Works 486.8 32.8 519.6 (181.9) (13.7) (195.6) High Grade Highways Electrical and Mechanical Works 7.8 1.0 2.4 11.2 (5.8) (0.8 (1.8) (8.4) RIPA 44.0 44.0 Accident Black Spots 1.9 1.9 Equipment 13.1 2.0 12.6 27.7 (13.1) (2.0) (15.1) Services Consultants and Training (c) Supervision of Construction 18.0 0.9 18.9 (7.5) (7.5) Training 4.5 4.5 (3.4) (3.4) Land Acquisition and Resettlement 30.9 30.9 Total 507.7 33.8 26.9 90.3 658.7 (200.8) (14.5) (14.7) (230.0) (a) Other includes negotiated contract, international shopping, consultants and training. (b) N.B.F. = Not Bank-financed. (c) Selection of Consultants according to the Bank's Guidelines for Use of Consultants. Notes: (1) Figures in parentheses are the amounts to be financed by the Bank loan/IDA credit. (2) All figures are rounded and include estimated physical and price contingencies but exclude the cost of land acquisition and resettlement which is shown as a separate component.  Project Appraisal Document Page 72 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table A-b: Project Costs by Procurement Arrangements (Inner Mongolia) (in US$million equivalent) Expenditure Category Procurement Method Total Cost ICB NCB Other(a) N (including contingencies) Works: High-Grade Highways Civil Works 198.8 5.0 203.8 (69.2) (1.8) (71.0) Electrical and Mechanical 2.1 0.9 3.0 Works (1.6) (0.7) (2.3) RIPA 17.8 17.8 Accident Black Spots 0.7 0.7 Equipment 2.0 0.6 8.1 10.7 (2.0) (0.6) (2.6) Consultants and Training_(c) Supervision of Construction 6.6 0.4 7.0 (2.5) (2.5) Training 2.0 2.0 (1.6) (1.6) Land Acquisition and 9.7 9.7 Resettlement Total 202.9 5.0 10.1 36.7 254.7 1 (72.8) (1.8) (5.4) (80.0) (a) Other includes negotiated contract, international shopping, and consultants and training. (b) NBF means not Bank-financed. (c) Selection of Consultants according to the Bank's Guidelines for Use of Consultants Notes: (1) Figures in parentheses represent the amount financed by the Bank Group. (2) All figures are rounded and include estimated physical and price contingencies but exclude the cost of land acquisition and resettlement which is shown as a separate component.  Project Appraisal Document Page 73 Country: China Project Title: Tr-Provincial Highway Project (CN-PE-45788) Annex 10 Table A-c: Project Costs by Procurement Arrangements (Gansu) (in US$million equivalent) Expenditure Category Procurement Method (b) Total Cost ICB NCB -ir N.B.F (including contingencies) Works: High Grade Highways Civil Works 163.1 24.1 141.2 (71.4) (10.6) (82.0) Electrical and Mechanical 4.5 1.0 1.2 6.7 Works (3.3) (0.8) (0.9) (5.0) RIPA 19.9 19.9 Accident Black Spots 0.8 0.8 Equipment 8.3 1.3 2.3 11.9 (8.3) (1.3) (9.6) Consultants and Training_(c) Supervision of Construction 6.5 0.4 6.9 (2.5) (2.5) Training 1.2 1.2 (0.9) (0.9) Land Acquisition and 18.9 18.9 Resettlement Total 175.9 25.1 10.2 42.3 253.5 (83.0) (11.4) (5.6) _ _ (100.0) (a) Other includes negotiated contract, international shopping, and consultants and training. (b) NBF means not Bank-financed. (c) Selection of Consultants according to the Bank's Guidelines for Use of Consultants Notes: (1) Figures in parentheses represent the amount financed by the Bank Group. (2) All figures are rounded and include estimated physical and price contingencies but exclude the cost of land acquisition and resettlement which is shown as a separate component.  Project Appraisal Document Page 74 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table A-d: Project Costs by Procurement Arrangements (Ningxia) (in US$million equivalent) Expenditure Category Procurement Method Total Cost ICB NCB Other(a) N.B.F(b) (including contingencies) Works: High Grade Highways Civil Works 124.9 3.7 128.6 (41.3) (1.3) (42.6) Electrical and Mechanical 1.2 0.3 1.5 Works (0.9) (0.2) (1.1) RIPA 6.3 6.3 Accident Black Spots 0.4 0.4 Equipment 2.8 0.1 2.2 5.1 (2.8) (0.1) (2.9) Consultants and Training () 4.9 0.1 5.0 Supervision of Construction (2.5) (2.5) Training 1.3 1.3 (0.9) (0.9) Land Acquisition and 2.3 2.3 Resettlement Total 128.9 3.7 6.6 11.3 150.5 l ___________________________ (45.0) (1.3) (3.7) _ (50.0) (a) Other includes negotiated contract, international shopping, consultants and training. (b) N.B.F. = Not Bank-financed. (c) Selection of Consultants according to the Bank's Guidelines for Use of Consultants. Notes: (1) Figures in parenthesis are the amounts to be financed by the Bank loan/IDA credit (2) All figures are rounded and include estimated physical and price contingencies but exclude the cost of land acquisition and resettlement which is shown as a separate component.  Project Appraisal Document Page 75 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table B: Thresholds for Procurement Methods and Prior Review Expenditure Category Contract Value Procurement Contracts Subject to Prior Review (Threshold) Method Estimated Total Value Subject to Prior Review (US $ millions) (US $ millions) Works More than 2.0 ICB 27 Contracts $494.6 million subject to prior review More than 2.0 NCB 5 Contracts $29.1 million subject to prior review Goods More than 0.25 ICB Contracts (') $13.1 million subject to prior review Services More than 0.10 for firns QCBS 3 Supervision Contracts $7.5 million and More than 0.05 for training $3.4 million subject to prior review individuals Miscellaneous Total Value of $547.7 million Contracts subject to prior review (1) Number of contracts will be determnined at a later date, when packaging has been finalized.  Project Appraisal Document Page 76 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table B-1: Consultant Selection Arrangements (in US$million equivalent) Selection Method Inner Mongolia Gansu Ningxia Total Cost (including contingencies3) A. Firms QCBS 6.6 6.5 4.9 18.0 (2.5) (2.5) (2.5) (7.5) Other 2.2 1.4 1.3 4.9 (1.4) (0.7) (0.8) (2.9) Subtotal 8.8 7.9 6.2 22.9 (3.9) (3.2) (3.3) (10.4) B. Individuals CQ 0.2 0.2 0.1 0.5 (0.2) (0.2) (0.1) (0.5) Total Cost Including Contingencies 9.0 8.1 6.3 23.4 (4.1) (3.4) (3.4) (10.9) Note: QCBS = Quality- and Cost-Based Selection QBS = Quality-based Selection SFB = Selection under a Fixed Budget LCS = Least-Cost Selection CQ = Selection Based on Consultants' Qualifications Other = Selection of individual consultants (per Section V of Consultants Guidelines). Figures in parenthesis are the amounts to be financed by the Bank loan.  Project Appraisal Document Page 77 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table C-a: Allocation of Loan Proceeds (All Three Provinces) Expenditure Category Amount in Financing Percentage US$ million Civil Works Construction of Baotou-Dongsheng Highway in Inner 49.7 38% of total expenditures Mongolia Construction of Baiyinchagan-Fengzhen 13.3 38% of total expenditures Construction of Liugouhe-Zhonghe Expressway in Gansu 48.3 49% of total expenditures Construction of Xujiamo-Jiepaicun Highway in Gansu 25.4 49% of total expenditures Construction of Guyaozi-Wangquanliang Highway in Ningxia 24.9 37% of total expenditures Construction of Yanchi-Xingren Highway in Ningxia 12.8 37% of total expenditures Electrical and Mechanical Works 6.7 75% of total expenditures Equipment 12.3 1 00% of foreign expenditures for directly imported equipment or 100% of local expenditures for locally manufactured equipment or 75% of local expenditures for other items procured locally. Consultant Services and Training 9.0 100% of foreign expenditures Unallocated 27.6 Total 230.0 Annex 10 Table C-b: Allocation of Loan Proceeds (Inner Mongolia) Expenditure Category Amount in Financing Percentage US$ million Civil Works Construction of Baotou-Dongsheng Highway 49.7 38% of total expenditures Construction of Baiyinchagan-Fengzhen Highway 13.3 38% of total expenditures Electrical and Mechanical Works 1.7 75% of total expenditures Equipment 2.3 100% of foreign expenditures for directly imported equipment or 100% of local expenditures for locally manufactured equipment or 75% of local expenditures for other items Consultant Services and training 3.4 100% of foreign expenditures Unallocated 9.6 Total 80.0  Project Appraisal Document Page 78 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 10 Table C-c: Allocation of Loan Proceeds (Gansu) Expenditure Category Amount in Financing Percentage US$million Civil Works Construction of Liugouhe-Zhonghe Expressway 48.3 49% of total expenditures Construction of Xujiamo-Jiepaicun Highway 25.4 49% of total expenditures Electrical and Mechanical Works 4.1 75% of total expenditures Equipment 7.4 100% of foreign expenditures for directly imported equipment or 100% of local expenditures for locally manufactured equipment or 75% of local expenditures for other items Consultant Services and training 2.8 100% of foreign expenditures Unallocated 12.0 Total 100.0 = Annex 10 Table C-d: Allocation of Loan Proceeds(Ningxia) Expenditure Category Amount in US$million Financing Percentage Civil Works Construction of Guyaozi-Wangquanliang 24.9 37% of total expenditures Highway Construction of Yanchi-Xingren Highway 12.8 37% of total expenditures Electrical and Mechanical Works 0.9 75% of total expenditures Equipment 2.6 100% of foreign expenditures for directly imported equipment or 100% of local expenditures for locally manufactured equipment or 75% of local expenditures for other items procured locally. Consultant Services and Training 2.8 100% of foreign expenditures Unallocated 6.0 Total 50.0  Project Appraisal Document Page 79 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 10 Table D: Estimated Disbursement Schedule (in US$million) Inner Mongolia Gansu Ningxia All Three Provinces Bank fiscal year Disbursement Disbursement Disbursement Disbursement and semester Semester Cumulative Semester Cumulative Semester Cumulative Semester Cumulative % 1999 June30, 1999/3 9.6 9.6 12.0 12.0 6.0 6.0 27.6 27.6 12 2000 December 31, 1999 8.0 17.6 10.0 22.0 5.0 11.0 23.0 50.6 22 June 30, 2000 8.8 26.4 11.0 33.0 5.5 16.5 25.3 75.9 33 2001 December 31, 2000 9.6 36.0 12.0 45.0 6.0 22.5 27.6 103.5 45 June 30,2001 9.6 45.6 12.0 57.0 6.0 28.5 27.6 131.1 57 2002 December 31, 2001 9.6 55.2 12.0 69.0 6.0 34.5 27.6 158.7 69 June 30, 2002 6.4 61.6 8.0 77.0 4.0 38.5 18.4 177.1 77 2003 December 31, 2002 4.8 66.4 6.0 83.0 3.0 41.5 13.8 190.9 83 June 30, 2003 4.8 71.2 6.0 89.0 3.0 44.5 13.8 204.7 89 2004 December 31, 2003 4.0 75.0 5.0 94.0 2.5 47.0 11.5 216.2 94 June 30, 2004 3.2 78.4 4.0 98.0 2.0 49.0 9.2 225.4 98 2005 December 31, 2004 1.6 80.0 2.0 100.0 1.0 50.0 4.6 230.0 100 3 Includes initial payment into Special Accounts and advance payments to contractors. Notes: (1) Project Completion Date: December 31, 2004. (2) Loan Closing Date: June 30, 2005.  Project Appraisal Document Page 80 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 11 Socio-economic Surveys 1. The six main highways included under the project affect the socio-economic conditions of communities along their alignments. These highways cut a swath through areas in Ningxia, Inner Mongolia, and Gansu which are populated by concentrations of national ethnic minorities. The Yanchi- Xingren Highway in Ningxia transverses a nearly 100% Hui area, while the Baiyinchagan-Fengzhen highway (NH 208) cuts across an area of Inner Mongolia where although Mongols and other minorities (Manchu, Hui) do not comprise area-wide majorities, they nevertheless are found concentrated in some villages along the right of way. Similarly, in Gansu, the Xujiamo-Gulang highway (NH 312) is slated to pass through a Tibetan township and a few Hui-dominated villages. The other three highways (Baotou- Dongsheng, NH 210, in Inner Mongolia; Guyaozi-Wangquanliang in Ningxia; and Liugouhe-Zhonghe, NH 312, in Gansu) have only a few scattered percent of minorities along their routes. Consequently, it was considered necessary to conduct socio-economic surveys of these minority-significant corridors. After protracted negotiations between the Bank and the Ministry of Finance over the terms of reference for a Chinese consulting firm to conduct socio-economic surveys along the highways' corridor of impact, Rollins International Commercial Consulting Co., Ltd. was selected to undertake the surveys. They were supported by an international expert on Chinese ethnic minorities. Both the TOR and the Chinese firm and its international expert were approved by the Bank. Selection of Sample 2. Detailed information regarding the numbers and concentrations of minorities along all six project highway corridors was provided by Chinese authorities. Based on the information received, a sample of villages with minority populations, within three kilometers of the highways were included in the survey. The number of villages in the sample were restricted to three villages in Ningxia on the Yanchi-Xingren Highway, two villages in Gansu on the Xujiamo-Gulang Highway, and 15 villages in Inner Mongolia along the Baiyinchagan-Fengzhen Highway. Methodology 3. Initial plans for methodology testing and revision could not be followed through since there was need to get the surveys underway as soon as agreement was reached on the terms of reference for the foreign and domestic consultants. 4. The international expert held a briefing for Rollins team on the qualitative social science methodologies appropriate for the Rural Rapid Assessments required by this project. 5. Three teams of five to six researchers conducted focus groups, household case studies, individual interviews, and administered a questionnaire survey. The international expert worked with two of tlue three teams for a part of this duration. His involvement in the field resulted in some revision in ihe sample originally selected in order to select villages with more representative minority population. 6. The teams of researchers conducted focus groups and visited households where interviews and household case studies tended to merge. Surveys similarly were intermingled with(and affected by) focus groups and household interviews. Survey results and reporting 7. The surveys were completed in November '97, and provincial reports were produced incorporating some of the comments made by the international expert on the earlier drafts. The general report with three provincial annexes has been produced in January, 98 and the accuracy of the reports issued by Rollins was confirmed by a social scientist of the Bank's resident mission in Beijing by reviewing the original data sets. The Bank commented on these reports and as a consequence, Rollins issued revised reports in March 1998 which the Bank found satisfactory.  Project Appraisal Document Page 81 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 8. The revised reports by Rollins emphasized the many benefits the highways would bring to the area and stressed the support given by the local inhabitants to the road projects. A few potential negative impacts were also mentioned. 9. These reports raised important questions and contained a number of good suggestions for project improvement. The Ningxia report discussed significant problems with culvert design and traffic safety issues, as well as disclosed a problem with riverbank erosion threatening Muslim gravesites. The Inner Mongolia reports suggested a number of minor design enhancements, such as relocating a village well, and the Gansu reports emphasized the need for adequate and timely compensation. All negative impacts are being addressed through design modifications, preparation of detailed resettlement action plans for each of the highways, and other measures increased and focused efforts in highway safety education, with emphasis on school children. Tables 1-3 of this Annex summarize the identified negative impacts as well as the actions taken, being taken, or will be taken to ameliorate these impacts in each of the three provinces. 10. A common thread throughout all three provincial reports was the reported need for, and thus the consultants recommendations for, improved highway safety, using villagers and their local resources in road construction, and the provisioning for enhanced access to training opportunities and credit to fully benefit from road development. Villagers were quite keen to develop roadside commerce, but often lacked the requisite skills in vehicle and road maintenance, business management, etc., that would be necessary. So, too, did they see themselves as disadvantaged in the search for credit to begin such businesses. A portion of the compensation for land acquisition could be used by the villages to conduct the required training. Since credit problems exist even without the proposed highways, the communications departments did not think that they should finance such credit. The Bank recommended to the concerned governments at all levels to provide the needed credit and training in order to expedite the development of these communities. 11. It should be pointed out that the above - mentioned recommendations apply not only to the villages which were surveyed but to other communities and villages as well. 12. Overall, no major problems specifically related to minority nationality issues were visible, and most suggestions from the consultants involved resettlement issues, compensation, minor engineering suggestions, and the need to provide training and credit opportunities. 13. Throughout the entire period, the Ministry of Finance was an important stakeholder in guiding the investigation and reporting process. The socio-economic surveys broadly, and seemingly accurately uncovered the major anticipated impacts of the highways on the people in areas with significant minority nationality populations.  Project Appraisal Document Page 82 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 12: Table 1 Resettlelment Action Plans Negative Impacts and Mitigation Measures in Inner Mongolia Autonomous Region (Baiyinchagan-Fengzhen Highway) Negative Impact Measures to be Taken (already taken), Time, Cost and Implementation Organization 1. Highway construction (1) Part of the farmland has not been cultivated in the past few years for the lack of labor. This will occupy some farmland will be made up for by contracting with the villagers in time before the initiation of the villages' farmland highway construction. This work is expected to be finished by Nov. 1998 - Feb. 1999. Cost of this work is included in the RAP for BFH. (2) The county/banner and township resettlement offices will be responsible for this work. 2. A small portion of (1) The villagers will be allowed to build their new residences near old village and the highway, villagers will have to the nearer the better. This work will be completed by Sep. - Dec. 1998. move out (2) The villagers will be compensated according to the RAP including compensation equivalent to the replacement cost, moving allowances and transition allowances. (3) The village committee will be responsible for this work. 3. A small portion of (1) What needs reconstruction is a well. this well is just under the proposed road subgradle. A living facilities will be new well nearby will be constructed during Oct. 1998 - Feb. 1999. The estimated cost of about reconstructed Y30,000 is included in the preconstruction costs of civil works of BFH. (2) This work will be carried out by the village committee and supervised by the county/banner and township resettlement office. 4. The problem about the (1) 67 connecting roads will be constructed between BFH and the roads to villages. The width of connection from the intersections will be about 10 meters and the length at least 20 meters (along village road) and the highway to respective gradient will not be more than 3%. This work is expected to be completed within the construction villages needs to be period of BFH. solved (2) The expenditures have been included in the project total cost. (3) Design has been carried out by IM Design Institute and the work will be carried out by the civil work contractors for BFH. 5. A small portion of (1) The temporarily occupied land for soil borrowing, material stockpiling and so on shall take farmland will be more low-quality farmland and land on the fills or mountains rather than high-quality farrnland. occupied temporarily (2) In the light of RAP, different compensation rates will be used for different lands. Cost of these lands has already been included in the RAP. (3) Resettlement offices of county/banner and township shall carry this work out. 6. Safety problem (1) Traffic signs and markings will be provided along BFH at least at 24 locations including 2 school crossings; speed limit sign will be installed at least at 4 locations; and signs and markings will be placed at a minimum of 4 high accident locations. This work will be carried out by the civil works contractors for BFH. (2) Existing efforts will be strengthened in traffic safety education and propaganda during the construction stage of BFH and after its completion. This will be carried out by the Communication Department in cooperation with the traffic police. School safety education will be strengthened in cooperation with school authorities. (3) The cost for these measures has been included in the total cost of BFH.  Project Appraisal Document Page 83 Country: China Project Title: Tn-Provindal Highway Project (CN-PE-45788) Annex 12: Table 2 Negative Impacts and Mitigation Measures in Gansu Province (Xujiamo-Jiepaicun Highway) General Description of Negative Impact Mitigation Measures 1. Due to the construction of the Highway from Jiepaicun is located at the end point of the Xujiamo- Xujiamo to Gulang, 2 ha. of irrigated land, 1 ha. of Jiepaicun Highway (XJH) supported by the World forest land and 28 households, 28.3% of the total Bank. Land acquisition occurs only in the extension village households, will be affected in Jiepaicun. of the highway from Jiepaicun to Gulang, which will Some households will lose more than 0.1 ha. of land. be financed by domestic funds. Same policy of land The land holding per capita will be reduced. acquisition and compensation rates used for XJH will be applied in the extension section from Jiepaicun to Gulang. 2. Demolishing houses in Jiepaicun affects 4 persons House demolishing occurs only in the extension of in 1 household and 4 vacant factory workshops with XJH from Jiepaicun to Gulang, which will be an area of 85 sq.m. financed by domestic funds. Same policy of affected assets and compensation policy used for XJH will be applied to the extension of XJH between Jiepaicun and Gulang. 3. Zhuanglang River flows at the east side of Diversion dikes will be built on the west bank of the Chengcheng Village in Wushengyi Township. The Zhuanglang River. The cost of Y30,000 is included proposed highway will be built at the east bank of the under EIA of the project. The construction will be River. The villagers are worried that the river water organized by the Chengcheng Villager Committee. in the rainy season may flood their land on the west bank of the River. 4. Some villagers from Chengcheng Village have An interchange will be built at the intersection of the opened restaurants, commercial shops and repair existing Highway 312 and XJH. This interchange is workshops, etc. along both sides of existing National located at a short distance (500 meters) south of the Road 312. Those villagers are afraid of the adverse Chengcheng Village. Also, a sign will be placed impacts to their business, due to the diversion of along XJH advising motorists of the services in the vehicles to the new highway (with full control of Chengcheng Village. These works will be carried out access). by the civil works contractor for XJH and their cost is included in the cost estimate of XJH.  Project Appraisal Document l'age 84 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 12: Table 3 Negative Impacts and Mitigation Measures in Ningxia Hui Autonomous Region (Yanchi-Xingren Highway) Negative Impacts Measures to be taken, Timing for Action & Institution for Implementation 1. Land acquisition for construction of Yanchi-Xingren The measures for acquisition of a small amount of land Highway (YXH) will be required. have been worked out and incorporated in the Resettlement Action Plan under YXH. These mieasures will be taken by the Resettlement Office before contractors commence works on YXH. 2. Many villagers showed their concern about the road Appropriate traffic signs and markings will be set up on safety because of the increase in the speed of vehicles both sides of Majiahewan School. This work will be and because the school is quite close to the highway. done by the civil works contractor. The cost is included in the construction cost of the civil works. Also, the traffic police in cooperation with the school authorities will carry out intensified traffic safety education. 3. As told by Majiahewan Villagers, a dike built on the Ningxia Communications Department in cooperation west bank of Qingshui River can mitigate the flood with the Water Resources Department have conducted a during the rainy season. However, the river may flow study of this issue and found that under the 1 00-year to the east bank where no dike has been built and flood flood the fields and graves will not be inundated. the fields and graveyard. The nearest graveyard is about 50 meters to the east bank of the river. 4. The ditch on one side of the highway will make it NCD will build two new culverts along the ditch to inconvenient for Maihe Villagers to get to the highway provide proper access to each of the natural villages. if no sufficient access points are provided. There are This work will be carried out under the civil works for three natural villages under Maihe Administrative YXH. Village, but only one has proper access. 5. A driver from Bazhuang Village is worried about the The at-grade intersection connecting Taiyanshari Coal proper access leading to the coal mine. Mine Road and YXH has been redesigned to a higher standard. This work and its cost are included in the cost of the civil works for YXH. 6. Two culverts under the highway near Majiahewan The culverts along the existing road of Majiahewan Village are silted which adversely affect the flow of will be dismantled and reconstructed. This work will water to irrigate the land. be carried out under the civil works for YXH. 7. The YXH will pass through a piece of irrigated land An additional culvert for Maihe Village is included in in the northwest of Maihe Village. If there is no culvert the new design and will be undertaken under the civil under the highway, land on the other side will not be works for YXH. irrigated. 8. Villagers are concerned that the contractors will use The issue of water for construction and domestic: use their limited water supply. will be resolved through drilling wells or transporting water from areas with abundant water resources. This work is included in the design and will be carried out under the civil works contracts for YXH.  Project Appraisal Document Page 85 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 12 Resettlement Action Plans A. Inner Mongolia 1. The project components in Inner Mongolia involve the construction of two new highways, a class I highway from Baotou to Dongsheng (the BDH highway), the Baiyincagan-Fengzhen (BFH) Class II highway, and rural roads under the RIPA component of the project. The subcomponents of the two main highway components are as follows: (a) Baotou - Dongsheng Highway BDH highway - 90.4 kms Dongsheng link road - 2.56 kms Dongsheng city bypass road - 10.86 kms Machi Link road - 11.5 kms (b) Baiyincagan-Fengzhen Highway BFH Highway - 142 kms Daliuhao Link road - 0.8 kms Tuguiuwula link road - 4.4 kms Land would need to be acquired for all of these components and the affected people and properties need to be resettled / relocated. 2. Detailed census and socioeconomic surveys of the affected people and properties have been conducted by the IMCD and the Inner Mongolia Communications Design and Research Institute (IMCDRI) in collaboration with other concerned agencies and the local governments in the project area during June-July, 1997. As a result of these surveys, precise categories of impact have been identified and resettlement entitlement policies for each category have been established. The categories of impact and the corresponding entitlement policies are given below: Categories of Impact Unit of entitlement Entitlement Policy Agricultural land PAPs; affected production teams Compensation for land; resettlement subsidy; redistribution of agricultural land Affected houses Affected PAPs Cash compensation at replacement cost; transfer allowance; transition allowance Affected enterprises Affected Units Compensation equivalent to replacement cost; compensation for loss of income during move Other affected assets Owners Compensation at replacement cost Affected infrastructure Affected community Replacement of infrastructure up to the same standard 3. The census surveys show that the project would need to acquire 12, 499 mu of land in addition to temporary requisition of 2870 mu of land. The land acquisition would directly impact 1728 households (7,376 persons). Impacts on residential houses would affect an additional 1269 persons in 297 households. 23 enterprises with a workforce of 471 will also be affected for the duration of the move. 4. Since per capita land holdings along both highways are very large and the project acquires a small percentage of the agricultural land in the affected villages, most of the affected households can be absorbed in agriculture through redistribution of residual farmland of the affected villages. However, there are a few cases where land redistribution, by itself, will not suffice and some of the affected  Project Appraisal Document Page 86 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) households may need to be transferred to non-agriculture based economic activities. The affected townships have provided indicative list of activities to be sponsored by them for economic rehabilitalion of the affected households in such villages. Typical strategies are based on developing new land for agriculture, agriculture intensification, animal husbandry, forestry and investment in enterprises. The affected townships will be paid nine times the annual production value of affected land for financing these activities (3 for land compensation and 6 for resettlement subsidy). Specially vulnerable groups have also been identified and proposals to assist them during the resettlement program have been drawn up. 5. Though the preparation of the RAPs was coordinated by the Project Execution Office of IMCD, implementation of the resettlement program will be carried out by the local county and township governments. A Resettlement Leading Group, with representatives from the Provincial Planning Committee, the Department of Communications, Department of Finance, the Bureau of Land Administration and other concerned agencies will be formed prior to initiation of resettlement implementation. A Project Resettlement Office, with working level staff from the above agencies will also be formed. Actual implementation will be carried out by county and township resettlement offices, assisted by village administrative committees. This setup was followed in the other two provinces of Gansu and Ningxia. 6. The costs associated with implementation of the RAPs will be a part of the project costs. The total cost of implementing the resettlement program is estimated to be RMB 78.05 million (approx. USD 9.4 million). The cost estimates include price and physical contingencies. 7. The RAPs include detailed implementation schedule linked to the pace of civil works construction. Implementation of the resettlement program is proposed to be a highly participatory exercise, along the same lines as the process adopted for preparation of the RAPs. In order to encourage participation and ensure participatory monitoring, each affected household will be provided with a Resettlement Information Booklet (RIB), summarizing the key features of the project and more specifically, the resettlement program. Detailed entitlements of each household will also be communicated to them through this booklet. Implementation of the resettlement program will also be aided by a grievance redress procedure based on local systems for this purpose. However, if the affeci:ed persons are dissatisfied even after exhausting the various channels of grievance redress, recourse to civil courts is available as a last resort. These principles and procedures were also followed in Gansu and Ningxia. 8. IMPCD proposes to conduct both internal and external monitoring of the resettlement program. While the internal monitoring will focus on issues relating to compliance with the quantitative targets mentioned in the RAPs, external monitoring will aim to evaluate the qualitative impacts of the resettlement program. Indicators for both internal and external monitoring have been included in the RAPs. The Shanghai Academy of Social Sciences has been engaged by the IMPCD as the external monitoring agency. The project agencies are required to submit periodic reports (both internal and external) to the Bank within two months of each December 31 and June 30, starting December 31, 1998 and until completion of all land acquisition and resettlement under the project in the case of internal monitoring reports and within 4 months of the same dates in the case of external monitoring repoits. These monitoring arrangements will also be followed in Gansu and Ningxia. RIPA Component 9. The first year's package consists of 13 systems in 13 counties with a total road length of 836 kms. An "Inventory" of impacts has been submitted by GPCD. A total of 5377 mu of land would need to be permanently acquired while 911 mu will need to be temporarily requisitioned. 308 persons will be  Project Appraisal Document Page 87 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) directly affected by land acquisition and relocation. The total cost of resettlement implementation will be 2.46 million RMB. B. Gansu 10. The project components in Gansu involve the construction of two sections of the of the National highway number 312 and roads under the RIPA component. the highways consist of two sections: the east section is from Liugouhe to Zhonghe, a four lane expressway 33.5 kms in length; the west section, totaling 64 kms in length will connect Xujiamo and Jiepaicun with a Class 2 "auto only" highway. Land would need to be acquired for all of these components and the affected people and properties need to be resettled / relocated. 11. Detailed census and socioeconomic surveys of the affected people and properties were conducted by the CPPDI in collaboration with other concemed agencies and the local govemments in the project area during June-August, 1997. As a result of these surveys, precise categories of impact have been identified and broad resettlement entitlement policies for each category have been established. The categories of impact and the corresponding entitlement policies are given below: Categories of Impact Unit of entitlement Entitlement Policy Agricultural land PAPs; affected production teams Compensation for land; resettlement subsidy; redistribution of agricultural land(wherever possible), equity contribution (in kind) for new township enterprises, interest bearing deposits in the owned by the affected households. Affected houses Affected PAPs Cash compensation at replacement cost; transfer allowance; transition allowance Affected enterprises Affected Units Compensation equivalent to replacement cost; compensation for loss of income during move Other affected assets Owners Compensation at replacement cost Affected infrastructure Affected community Replacement of infrastructure up to the same standard 12. The census surveys show that the project would need to acquire 11, 530 mu of land. The land acquisition would directly impact 778 households (3149 persons). Impacts on residential houses would affect an additional 1010 persons in 241 households. 8 enterprises will also be slightly affected for the duration of the move, but no employees will be affected. 13. The per capita land holdings along both sections of the highways are very low and the project acquires a substantial portion of the agricultural land in the affected villages. Economic rehabilitation of the affected persons poses a big challenge. Only a small percentage of the affected households can be absorbed in agriculture through redistribution of residual farmland of the affected villages. In most of the cases land redistribution, by itself, will not suffice and a large percentage of the households would need to resort to other, non-land-based modes of economic rehabilitation. The project agencies have come up with a detailed economic rehabilitation strategy for the affected households in such villages. Typical strategies are based on developing new land for agriculture, providing irrigation and agriculture intensification, investment in new enterprises, treating land compensation as the equity of affected households into formation of these enterprises, and depositing compensation in "interest bearing deposits" managed by the affected households. The affected townships will be paid nine times the annual production value of affected land for financing these activities (3 for land compensation and 6 for resettlement subsidy).  Project Appraisal Document Page 88 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 14. The costs associated with implementation of the RAPs will be a part of the project costs. The total cost of implementing the resettlement program is estimated to be RMB 136.3 million (approx. USD 16.4 million). The cost estimates include price and physical contingencies. RIPA component 15. The first year's package consists of 2 systems with six roads in six counties with a total road length of 178 kms. An "Inventory" of impacts has been submitted by GPCD. A total of 610 mu of land would need to be permanently acquired for the 6 systems. 366 persons will be directly affected by land acquisition, while another 406 will be affected by house relocation. The total cost of resettlement implementation is estimated to be about 21.1 million RMB ($2.5 million) of which 3.62 million RMB (US$0.4 million) will be for the first year's package. C. Ningxia 16. The project components in Ningxia involve construction of a new highway from Guyaozi t:o Wangquanliang (94 km), rehabilitation of an existing highway from Yanchi to Xingren (250.5 km) and construction of roads under the RIPA component. Land acquisition and resettlement of affected persons is, therefore, necessary. The highways passes through sparsely populated areas consisting primarily of wastelands. Consequently, the extent of land acquisition and especially relocation required is minimal in comparison to the total length of the highways. Similarly the roads under the RIPA component do not involve substantial resettlement. 17. The NPCD engaged the Shanghai Academy of Social Sciences to help design the census surveys and conduct the socioeconomic surveys of the affected populations. Based on these surveys a detailed baseline of affected households, properties and enterprises has been established. This baseline forms thie basis for detailed resettlement planning. The categories of impact identified as a result of the census surveys and the corresponding resettlement entitlement policies for each of these categories are given below: Categories of Impact Unit of entitlement Entitlement Policy Agricultural land PAPs; affected production teams Compensation for land; resettlement subsidy; redistribution of agricultural land Affected houses Affected PAPs Cash compensation at replacement cost; transfer allowance; transition allowance Affected enterprises Affected Units Compensation equivalent to replacement cost; compensation for loss of income during move Other affected assets Owners Compensation at replacement cost Affected infrastructure Affected community Replacement of infrastructure up to the same standard 18. 8,704 mu of land would need to be acquired for the project in Ningxia while another 1,424 mu will need to be requisitioned temporarily. 361 households (1716 persons)will be directly affected due to land acquisition and another 62 households (324 persons) will be affected by impacts on their houses. 8 enterprises with 267 workers will also be affected partially or fully. 19, The costs associated with implementation of the RAPs will be a part of the project costs. The total cost of implementing the resettlement program is estimated to be RMB 18.3 million (approx. USI) 2.2 million). The cost estimates include price and physical contingencies.  Project Appraisal Document Page 89 Country: China Project Title: Tr-Provincial Highway Project (CN-PE-45788) RIPA Component 20. The first year's package consists of four systems in four counties with a total road length of 68 kms. An "Inventory" of impacts has been submitted by the NCD. About 381 mu of land would need to be permanently acquired for the four systems while 30 mu will need to be temporarily requisitioned.  Project Appraisal Document Page 90 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 13 Environmental Assessment and Action Plan Summary A. Background 1. Environmental assessments (EAs) of the following six major highway components were carried out by Environmental Science Research Institute of Inner Mongolia Autonomous Region [(a) and (b) below], Lanzhou University, [(c) below], and Xian Highway University [(d), (e) and (f) below]. Th,e initial draft EA documents were submitted to the Bank during November 1997 and reviewed by the Bank during the Preparation/Pre-Appraisal Mission in November 1997. (a) Baotou-Dongsheng Class I Highway (BDH: 103 km) in Inner Mongolia Autonomous Region; (b) Baiyinchagan-Fengzhen Highway (BFH: 142 km) in Inner Mongolia Autonomous Region; (c) Liugouhe-Zhonghe Expressway (LZE: 33.5 km) in Gansu Province; (d) Xujiamo-Jiepaicun Class 2 Auto-Only Highway (XJH: 64 km) in Gansu Province; (e) Guyaozi-Wangquanliang Class I Highway (GWH: 94.0 km) in Ningxia Hui Autonomous Region; and (f) Yanchi-Xingren Class 2 Highway (YXH: 250.5 km) in Ningxia Hui Autonomous Region. 2. The draft final Environmental Impact Assessment Reports (EIAs), Environmental Action Plans (EAPs) and Executive Summaries (ES) of all six highways were submitted to the Bank in December 1997, and found satisfactory. It is noted that EIA, EAP and ES of Xujiamo-Jiepaicun Highway include environmental assessment works for Jiepaicun-Gulang Highway which is out of the scope of the project. 3. Regarding the rural roads improvement program to help alleviate poverty (RIPA) in poor counties of the three provinces, it was agreed that a Sectoral Environment Assessment Approach would be applied. Accordingly, Initial Environmental Evaluation (IEE) reports and EAPs of first year package of RIPA component under the project were prepared and submitted to the Bank during December 1997- January 1998. 4. During the EA work in the three provinces, the local people along the project route have been intensively consulted, and their opinions have been reflected in the project design and environmental mitigation measures, as appropriate. 5. The policy and administrative requirements for environmental assessment of development projects in China were followed during preparation and evaluation of the EAs, as well as the Bank's policy. Major laws and regulations applied to the EAs for the Tri-Provincial Highway Project are presented below. Major national standards applied to the project are attached as Appendix to this Annex. (g) Environmental Protection Law of the Peoples' Republic of China (PRC); (h) Atmospheric Pollution Control Law of PRC; (i) Environmental Noise Control Law of PRC; (j) Water Pollution Control Law of PRC; (k) Cultural Relics Protection Law of PRC; (1) Circular on Strengthening Environmental Impact Assessment Management for Construction Projects Financed by International Financial Organizations (June 1993), issued by National Environmental Protection Agency (NEPA).  Project Appraisal Document Page 91 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 6. The scope of and the criteria for the EIAs is presented below. (m) Noise: The EAs cover areas within 200 m from both sides of the alignments BDH, BFH, LZE, XGH and GWH, and within 100 m from both sides of the alignment of YXH. Class II noise standards [60 dB(A) in daytime and 50 dB(A) at night] are applied to schools and hospitals. Class IV standards [70 dB(A) in daytime and 55 dB(A) at night] are applied to other areas such as residential areas. (n) Air pollution: The areas covered by EAs are the same as those for noise. Class II standards are applied to the project. (o) Ecological conditions (water, soil, etc.):The EAs cover areas within 200-1000 m along the alignment. (p) Target year for the predictions: In light of the construction schedule of the project, environmental predictions are carried out at three stages: at initial operational stage around 2002, at medium-term around 2010, and long-term around 2020. B. Brief Project Description 7. The Tri-Provincial Highway Project includes the following highway components for which environmental assessments are needed. (q) Construction/improvement of six main highways comprising construction/improvement of: (i) Baotou-Dongsheng Class I Highway (BDH: 103 km) in Inner Mongolia Autonomous Region. The section from Dongsheng to the south (10.9 km) will be regular two-lane Class 2 Highway; (ii) Baiyinchagan-Fengzhen Class 2 Highway (BFH: 142 km of which about 72 km will be Class 2 Auto-Only) in Inner Mongolia Autonomous Region; (iii) Liugouhe-Zhonghe Expressway (LZE: 33.5 km) in Gansu Province; (iv) Xujiamo-Jiepaicun Class 2 Auto-Only Highway (XJH: 64 km) in Gansu Province; (v) Guyaozi-Wangquanliang Class I Highway (GWH: 94.0 km of which the 10.7 km section between Yanchi and Wangquanliang is Class 2 Auto-Only) in Ningxia Hui Autonomous Region; and (vi) Yanchi-Xingren Class 2 Highway (YXH: 250.5 km) in Ningxia Hui Autonomous Region (r) Improvement and new construction of about 1900 km in total of rural roads in a program to help alleviate poverty (RIPA) in poor counties in the three provinces concerned. C. Baseline Environmental Description 8. Natural Environment: The project areas are located in the three land-locked provinces of Inner Mongolia, Gansu and Ningxia. The areas belong to the typical continental climate zone, with hot  Project Appraisal Document Page 92 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) summers, long and cold winters, a large range of temperature in the year, and very low precipitation. In general, due to those climatic factors, ecological conditions of the project areas are very vulnerable wilh poor vegetation. The proposed highways mostly go through dry land, where water resources are veiy scarce. Field surveys were undertaken along the alignment in each province during the preparation of the project. The surveys ensure that there is no natural habitats and environmentally protected areas along the project areas. Supplementary information of natural environment in each highway component are summarized below. 9. BDH goes through Baotou City, Dalate Banner and Dongsheng City of Yikezhao League in Inner Mongolia, which are relatively flat. Another highway component in the province. BFH goes through Quhar Right Wing Rear Banner, Jining City Quahar Right Wing Front Banner and Fengzhen City of Ulanquab League. Land morphology along BFH is relatively flat in the northern section (Baiyinchagan - Jining City), and is mountainous and hilly in the southern section (Jining - Fengzhen). Due to very dry weather, strong winds, and other unfavorable climatic conditions, soil erosion and land degradation are widely observed in both sections. Also, vegetation is very poor and fragile. 10. XJH goes through Yongden and Tianzhu Counties in Gansu. The proposed alignment goes through relatively level land in Yongden County, and then through rolling hill areas of Tianzhu County. Ecological conditions in Tianzhu are unfavorable with poor vegetation and prevailing soil erosion. LZE goes through hilly and gully land on loess plateau, where vegetation is generally poor and land resources have been degraded. 11. The proposed alignment of GWH and YXH in Ningxia mostly goes through flat plains. Vegetation is dry or desert steppe. Since the evaporation rate is quite high (7 - 9 times higher than annual precipitation), water resources are very scarce. Also, drifting sand dunes and salt lakes have been greatly developed. In winter and spring, sandstorms occasionally occur in the areas, particularly along YXH. 12. Socio-Economic Situations: While the project areas are rich in various resources, they are generally under-utilized with a few exceptions in Baotou City in Inner Mongolia. The majority of the farmers in rural areas are poor. The socio-economic situations of the project areas along each highway component are summarized below. 13. The population of the areas is around 1.72 million along BDH, and around 1.01 million alon,g BFH in Inner Mongolia. While living conditions in urban areas such as Baotou, Dalate and Dongsheng are higher than or equivalent to the provincial average, the majority of the farmers in rural areas are poor. These areas are rich in mineral and energy resources. In Baotou, steel and non-ferrous industries are dominant. In the rest of the project areas, the natural resources have been under-utilized, and agriculture and livestock farming are major industry. Along BFH, farmlands are dominant in the project areas, which have suffered from soil erosion and degradation. BDH mostly goes through uncultivated areas, where sand dunes and even desert are found along the proposed alignment. 14. XJH goes through Yongden and Tianzhu Counties in Gansu Province, with a population of .U 1 million in total. In these counties, agriculture and livestock farming is a major industry. LZE goes through Yuzhong County, Chengguan District and Gaolan County of Lanzhou City, with a population of 2.6 million in total. The majority of people along the alignment is dependent on agriculture and township enterprises. 15. GWH and YXH in Ningxia go through Lingwu City, Yanchi County, Tongxin County, and Haiyuan County, with a population of 1.07 million in total. While those areas are rich in natural resources such as coal and limestone, due to various reasons, the local economy is backward. Agriculture and livestock farning are major industry in the areas. Around 80 - 90 percent of total land is used for agriculture and/or livestock farming, which has been suffering from desertification.  Project Appraisal Document Page 93 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 16. Cultural Property: During the preparation of the project, cultural property along the alignment has been investigated. Except GWH, no cultural property has been observed along the proposed alignment. 17. Regarding GWH, the field survey found that there is the remains of the Great Wall along the proposed alignment, which has been greatly damaged by natural aging and various human activities over hundreds of years. While the concerned portion of Great Wall is not under protection due to its poor conditions, an additional survey was carried out during the preparation of the project to identify necessary mitigation measures to be reflected in the project design and construction works. The additional survey was designed and carried out based on Bank policy, O.P. Note 11.03. 18. Air Quality: Baseline data indicate that the current air quality (CO and NOx) along the project areas are generally in good condition with a few exceptions at the sites near urban areas such as Langzhou and Baotou. Regarding TSP, monitoring data indicate that the current levels occasionally exceed the standards due to sandy winds. 19. Noise: Present acoustic environmental conditions are generally good along most of the proposed alignment. At limited sites near urban areas such as Dongsheng, noise levels slightly exceed the standards due to the existing traffic. 20. Water Quality: Measured surface water quality data generally meet the water quality standards. D. Potential Environmental Impacts and Their Mitigation Measures 22. Major environmental impacts and their mitigation measures are summarized below. The mitigation measures identified are reflected in the project documents, as appropriate. The key elements of the EAPs are summarized as Appendix of this Annex. Design Phase 23. Alternatives Analysis: Alignments of proposed highways were selected from among several alternatives in order to minimize land acquisition, social and economic disturbances, adverse environmental impacts including noise pollution at sensitive sites and ecological disruption and, adverse impacts on cultural property, and to avoid unfavorable geological conditions. 24. Social Disruption: In order to minimize problems of community separation and interference on livestock migration resulting from the project, a large number of underpasses and overpasses were included in the project design. 25. Soil Erosion: Mitigation measures to minimize soil erosion were reflected in the project design, such as rational utilization of waste soil, proper design and protection of slopes, and construction of ditches and other drainage structures 26. Noise and Air Pollution: Noise and air pollution mitigation measures are identified and reflected in the engineering design of the project. These include construction of noise barriers, plantation of trees, installation of surrounding walls, etc.. Several buildings will be relocated due to the significant noise impacts. 27. Cultural Property: Regarding GWH in Ningxia, an additional survey was carried out in May 1997, with participation of a local expert and the concerned local authorities, to assess potential impacts on the remains of the Great Wall and to identify their mitigation measures. Also, the proposed alignment  Project Appraisal Document Page 94 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) and design were thoroughly reviewed with the local authorities of cultural property, and were approved by them. Based on this survey, the original alignment was changed so as to minimize adverse impacts. Construction Phase 28. Dust and other air pollution, noise pollution, soil erosion and water pollution have been identified as potential impacts of the project during the construction phase. 29. Dust and Other Air Pollution: Fugitive dust and other air pollution have been identified as major environmental impacts during the construction work of main highway. Construction sites will be sprayed with water to minimize fugitive dust. Asphalt and concrete mixing stations will not be locatecl near the sensitive sites. Appropriate measures will be implemented to minimize adverse impacts of transportation of construction materials. 30. Noise: Operation of heavy machinery and other construction activities will cause adverse impacts on acoustic environment at the populated project areas, in particular, at environmentally sensitive sites such as schools and hospitals. Strict regulations of schedule of construction works will be implemented to minimize such adverse impacts. Construction works will be prohibited near residential areas and other sensitive sites between 10:00 p.m. and 6:00 a.m. Stricter regulations will be adoptedi, after further consultation with concerned bodies, at several sensitive sites. 31. Soil Erosion: In order to minimize soil erosion and vegetation loss, trees and grasses plantation will be carried out, as appropriate. Temporary drainage system will be developed, where necessary, to minimize soil erosion and adverse impacts on irrigation system. 32. Water Pollution: Appropriate measure will be undertaken to prevent direct discharges of polluted water from construction activities into rivers and canals. In case of bridge construction, machinery and construction boats will be maintained in a proper manner to prevent accidental oil spills. Hazardous construction materials such as asphalt and oil will be safely stored. Garbage and wastes from construction activities including those from construction camps will be handled in an appropriate manner to avoid water pollution and sanitary problems. 33. Cultural Property: Construction works will be stopped in case new cultural relics are discovered as a result of road construction or excavation activities. The local cultural property authorities will be inforned and a field survey of the site will be undertaken. Necessary mitigation measures will be implemented, as appropriate. 34. In order to minimize adverse impacts on the remains of the Great Wall along GWH, no borrow shall be allowed within 80 m from the remains. Excavated soil will be returned and compacted in a proper manner. Any undue activities of construction workers will be prohibited. Operation Phase 35. Noise and Air Pollution: According to the noise predictions, the noise levels during the first ten years of the operation phase generally meet the standards. During 2010-2020, the noise levels exceed the standards at limited sensitive sites. In order to mitigate such noise pollution, depending on the monitoring results, appropriate measures including construction of noise barriers will be implemented. The predicled air pollution levels generally meet the standards. In order to avoid future noise and air pollution problems, development of residential areas, and construction of sensitive buildings such as schools and hospitals will be prohibited in the vicinity of the highways. Mitigation measures for each of the main highways are summarized below.  Project Appraisal Document Page 95 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 36. Inner Mongolia. The predicted noise levels along both BDH and BFH generally meet the standards during the first ten years of the operation phase. During 2010-2020, the noise levels, in particular during the night-time, exceed the standards at several sensitive sites. At Hongshaba Elementary School along BFH, mitigation measures including raising the height of existing walls and installation of double-layer glass windows will be implemented around 2001. Depending on monitoring data, appropriate measure will be considered at other sensitive sites along both BDH and BFH. 37. Gansu. The predicted noise levels along XJH and LZE generally meet the standards. Depending on the monitoring results, a noise barrier of around 300 m will be constructed at Tianzhu Normal School along XJH during 2010-2020. Regarding LZE, depending on the monitoring data, appropriate noise protection including installation of double-layer glass windows and raising the height of the existing surrounding walls will be carried out around 2010 at Qingbaishi Middle School and Gansu Education Institute. While incremental impacts of the project are relatively minimal, the predicted air pollution levels (NOx) at Donggang-Zaoshugou section which is near from Lanzhou city center exceed the standards mainly due to existing sources. The Lanzhou Municipal Environmental Protection Bureau has been strengthening mitigation measures to control such pollution, including promotion of energy savings and rehabilitation of treatment facilities. The EIA ensures that through such measures the air pollution levels in the area will be improved within an acceptable level. 38. Ningxia. The predicted noise levels along YXH and GWH generally meet the standards. During 2010-2020, the noise levels exceed the standards at limited sensitive sites. Depending on the monitoring results, at Shintangou Primary School and Hanjiaoshui High School along YXH, surrounding walls of around 800 m in total (300 m in Shintagou and 500 m in Hanjiaoshu) will be constructed during 2010- 2020. At Guyaozi of GWH, noise monitoring will be regularly carried out to evaluate noise levels. Depending on the results, appropriate measures including construction of surrounding walls will be considered. 39. Other Pollution: In order to prevent water pollution from the service areas, appropriate treatment facilities will be installed. Garbage at the service areas will be regularly collected and disposed in a proper manner. E. Environmental Monitoring 40. During the construction and operation phases, environmental monitoring will be carried out to verify the actual impacts on the environment, identify unexpected environmental problems at early stage, and adjust environmental measures as appropriate. An annual monitoring report for the previous year would be furnished to the Bank starting in February 29, 2000 and ending in February 28, 2007. Construction Phase 41. Noise and ambient air (dust and TSP) will be regularly measured at major sensitive sites along main highways in each province. In LZE of Gansu, water quality monitoring (pH, SS, DO, COD, BOD, Pb and oil) will be undertaken. Detailed information about monitoring activities such as frequencies, sites, methods are included in EAPs, respectively. Operation Phase 42. Monitoring items include noise and ambient air (NOx, CO, TSP) at major sensitive sites, and tail gas (CO, CH, SPM). Detailed information about monitoring activities such as frequencies, sites, methods are included in EAPs, respectively.  Project Appraisal Document Page 96 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) F. Institutional Arrangements and Training 43. The institutional arrangements for environmental protection of main highways are summarized below. (a) Inner Mongolia. Environmental Protection Section with four staff will be established under the project office. The Section will be responsible for environmental management of both BDH and BFH sections. Under the Section, an environmental protection office with two staff will be established at each contract section, which is responsible for environmental supervision. Environmental monitoring (air, noise water and ecological conditions) will be carried out by local environmental monitoring stations. (b) Gansu. One deputy director within the Project Office will be assigned for overall environmental management. The Environmental Protection Office (EPO) with four staff will be established within the Project Office. Under the EPO, an environmental protection group with two staff will be established for each main highway. (c) Ningxia. One deputy chief engineer will be assigned for environmental management, who will be assisted by one engineer. An engineer will be assigned for environmental management at local offices of YXH and GWH sections. Noise and dust monitoring will be carried out by supervisors at each contract sections, while TSP monitoring will be carried out by Ningxia Environmental Monitoring Station. 44. The outline environmental training programs under this project is as follows. (a) Inner Mongolia. The environmental training program would consist of four components: (i) high-level staff training (two persons for around 30 days each including overseas training), (ii) domestic training for environmental administration (seven persons for around 30 days each), (iii) domestic training for environmental engineering and technology (seven persons for around 30 days each), and (iv) domestic training for environmental supervision (seven persons for around 30 days each). (b) Gansu. The environmental training program would consist of three components: (c) training of a high-level engineer for around 30 days including overseas training, (i) training for environmental staff (two persons for around 30 days each including overseas training), and (d) domestic training for environmental supervision (sixteen persons for around 30 days each). (e) Ningxia. The environmental training would consist of four components: (f) high-level training of one person for around 20 days (g) environmental management training (administrative: three persons for around 15 days each), (h) environmental management training (engineering and technology: 3-6 persons for around 15 days each), and (i) environmental supervision and monitoring (twelve persons for around 30 days each). All those training would be domestic. G. Environmental Aspects of RIPA 45. RIPA includes 50 road segments under 22 systems with a total length of 1,887 km. Since the road segments under RIPA are large in number, and most of the RIPA projects consist of upgrading existing  Project Appraisal Document Page 97 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) roads and are small in the size of construction works, it was agreed that a Sectoral Environmental Assessment approach would be applied to the RIPA projects. Also, the RIPA projects will be undertaken in a phased approach. The environmental documents have been prepared for the first-year package in each province, and been reviewed by the Bank. 46. Twenty-three road segments in total will be included as first-year package. Three road segments all in Inner Mongolia will be newly constructed, while the remaining twenty segments will be upgraded mainly from unclassified road status to Class IV roads. The environmental documents of all these segments have been generally well-prepared and found satisfactory to the Bank. 47. Overview of Environmental Conditions. (a) Inner Mongolia. Thirteen road segments with six new construction will be included as first-year package. The project areas are mostly located in flat or gently hilly areas, which are generally in poor vegetation. Air and noise conditions are good in quality. No cultural property and natural habitats are observed along the alignments. (b) Gansu. Six road segments will be included as first-year package, which are all upgrading. The project areas are located mainly in mountainous region. While proposed road segments of System 10 (Baihe-Linggiangpu, Yaoping- Yuntai, and Hekou-Maquan) go through areas with relatively warm and moist weather, the rest of the proposed projects are located in areas with dry and severe environmental conditions. Air and noise conditions are good in quality. No cultural property and natural habitats are observed along the alignments. (c) Ningxia. Four road segments will be included as first-year package, which are all upgrading. The proposed projects are located mainly in hilly areas where the environmental conditions are vulnerable with dry weather. Air and noise conditions are good in quality. No cultural property and natural habitats are observed along the alignments. No environmentally sensitive sites such as schools and hospitals exist along the project areas. 48. Potential Impacts and Mitigation Measures. (a) Inner Mongolia. In light of existing environmental conditions and future traffic volumes, no significant potential impacts of the projects including new construction works are envisaged. Appropriate measures to minimize soil erosion and impacts on vegetation will be implemented, including slope protection, construction of retaining walls and drainage structures, and planting trees and grasses. Utilization of heavy machinery will be prohibited during night-time. During the construction phase, spraying water will be carried out to minimize dust pollution. (b) Gansu. No significant potential impacts are envisaged. Mitigation measures include: construction of additional retaining walls, slope protection, construction of temporary and permanent drainage system, and tree/grass planting. Also, mitigation measures commonly used for minimizing noise and water pollution will be implemented. (c) Ningxia. Since no environmentally sensitive sites exist in the project areas and the construction works are small in size, environmental impacts of the projects are very minimal. Slope protection and tree planting will be undertaken to minimize soil erosion and impacts on vegetation. During the construction phase, spraying water will be carried out to minimize dust pollution.  Project Appraisal Document Page 98 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) 49. Environmental Supervision and Management. (a) Inner Mongolia. The local environmental monitoring stations will be responsible for environmental monitoring. The local communication bureaus are responsible for environmental supervision during the construction phase. Inner Mongolia Highway Administration Bureau wvill be responsible for overall environmental management of RIPA. Training programs will be organized by Inner Mongolia Communication Department. (b) Gansu. The local communication bureaus will be responsible for environmental supervision during the construction phase. Gansu Highway Administration Bureau will be responsible for overall environmental management of RIPA. (c) Ningxia. The local communication bureaus are responsible for environmental supervision duriing the construction phase. Ningxia Highway Administration Bureau will be responsible for overall environmental management of RIPA. Training programs will be organized by Ning.Kia Communication Department. H. Public Consultation and Information Disclosure 50. Public Consultation and Feedback: The following approaches have been adopted for public consultation under this project: (i) workshop with participation of experts and governmental officials; (ii) consultation meetings with local governments/representatives; and (iii) questionnaire analysis of public opinion supplemented by interviews. 51. Major feedback other than those relating to resettlement issues includes: (i) Noise pollution during the construction and operation phases should be minimized (YXH, XJH and LZE); (ii) Construction work should be in a good quality so as to avoid unnecessary disturbances on the environment (BDH and BFH); (iii) Afforestation work should be timely undertaken (BDH, BFH and LZE); and (iv) Passages should be constructed so as to minimize impacts of community separation (GWH-[). Those points were reflected in selection of road alignment and/or EAP as appropriate. 52. Information Disclosure: Draft final EIAs, EAPs and ES were submitted to the Bank during December 1997-January 1998. Those environmental documents were made public locally at Provincial Communication Department in each province. Following receipt of letters of agreement on release frojm the three provinces, those documents were sent to the PIC.  Project Appraisal Document Page 99 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 13 Appendix: Key elements of EAPs for the Tri-provincial Highway Project Environmental Issues Actions Taken/To Be Taken Responsibility Design Phase 1. Route Selection The alignments were selected from several alternatives to minimize land acquisition PCDIPHDI requirements, reduce impacts on the environment, and to avoid unfavorable geological conditions and cultural relics. 2. Social Disruption Adequate number of bridges and underpasses/overpasses were designed. PHDI 3. Soil Erosion Planting of trees and grasses was included in designs where appropriate. Slope PHDI protection, retaining walls, protection walls were incorporated in the design. Temporary and permanent drainage systems were designed to minimize soil erosion and alteration of hydrological regimes. PHDI 4. Dust/Air Pollution In addition to I above, quarries, material borrow sites and waste disposal sites were PHDI selected, taking into account the dust and other problems at environmentally sensitive locations such as residential areas. 5. Noise In addition to I above, adequate measures such as noise barriers and double-glass PHDI windows were identified and integrated in the project cost. 6. Cultural Relics Cultural relics survey was carried out and mitigation measures were identified. NPCD Construction Phase 1. Dust/Air Pollution All reasonable steps, including watering, will be taken to minimize dust pollution Contractors during construction. Stockpiles and storage areas will be covered or watered to prevent dust pollution. Trucks to transport construction materials will be covered to minimize spills. Asphalt mixing sites will not be located near the sensitive sites. 2. Noise Noisy construction works will be prohibited during the nighttime in the sensitive sites. Contractors Stricter regulations will be adopted at the selective sensitive sites (GWH, YXH, and LZE). 3. Soil Erosion/Water Trees and grasses will be planted on side slope, and along the roadside, where Contractors Pollution appropriate. Temporary channel or conduit will be constructed for irrigation and drainage where appropriate. All reasonable measures shall be taken to prevent direct discharge of polluted water from construction activities into rivers and irrigation channels. 4. Construction Camps Adequate measures of wastewater treatment and garbage collection will be taken at the Contractors construction camp sites. 5. Cultural Relics Excavation will be stopped immediately if any cultural relics are found. The local PCD/Super- cultural authority will be informed of such discovery, and a field survey of the site will vision Engineer be undertaken. Operation Phase 1. Noise and Air Pollution Noise barriers or other appropriate noise protection measures will be installed at PCD location where noise significantly exceeds standard. 2. Water Pollution/Waste Wastewater at service areas will be treated by appropriate facilities. Garbage will be PCD/Operators Disposal regularly collected. (XJH, GWH, and YXH) of Highways Note: Abbreviations: Organizations: PCD: Provincial Communication Department PHDI: Provincial Highway Design Institute NPCD: Ningxia Provincial Communication Department Highways: BDH: Baotou-Donghseng Class I Highway BFH: Baiyinchagan-Fengzhen highway LZE: Liugouhe-Zhonghe Expressway XJH: Xujiamo-Jiepaicun Class 2 Auto- Only Highway GWH: Guyaozi-Wangquanliang Class I Highway YXH: Yanchi-Xingren Class 2 Highway  Project Appraisal Document F'age 100 Country: China Project Title: Tn-Provincial Highway Project (CN-Pl-_-45788) Annex 14 Project Processing Budget and Schedule Planned Actual (5/26/98) (At final PAD stage) A. Project Budget (US$000) 283,000 156,700 B. Project Schedule Planned Actual (At final PCD stage) Time taken to prepare the project (months) First Bank mission (identification) 04/03/1997 04/03/1997 Appraisal mission departure 01/12/1998 04/14/1998 Negotiations 04/20/1998 05/18/1998 Planned Date of Effectiveness 11/15/1998 11/15/1998 Prepared by: Provincial Communications Departments of Inner Mongolia, Gansu and Ningxia Preparation assistance: PHRD (review of highway designs and bid documents, social assessments, rural roads), Canadian Trust Fund (RIPA), Finnish Trust Fund (Highway Safety) Bank staff who worked on the project included: Name Specialty Robin Carruthers Economist Xin Chen Project Coordinator - China Maninder Gill Resettlement Specialist Hatim Hajj Task Team Leader, engineering, procurement Takashi Matsumura Environmental Specialist Philip Daltrop Lawyer Silvia Ross Task Assistant Claude Salem Institutional Strengthening and Training Specialist Chongwu Sun Environmental Specialist, China Cynthia Warren Task Assistant Dawei Yang Procurement Specialist, China Xiaohong Yang Disbursement Specialist, China Youlan Zou Resettlement Specialist, China Consultants who worked on the project included: Gregory Guldin Social Scientist Harri Peltola Traffic Safety Specialist V. Setty Pendakur Rural Transport Specialist  Project Appraisal Document Page 101 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) Annex 15 Documents in the Project File A. Project Implementation Plan 1. Inner Mongolia, May 1998 2. Gansu, May 1998 3. Ningxia, May 1998 B. Feasibility Studies 1. Inner Mongolia a) Baotou-Dongsheng Highway, January 1997, with supplementary information in May 1997. b) Baiyinchagan-Fengzhen Highway, May 1997 c) 13 studies, one for each segment of RIPA, December 1997 2. Gansu a) Liugouhe-Zhonghe Expressway, March 1997, with supplementary information in May 1997 b) Xujiamo-Gulang Highway, April 1997, with supplementary information in May 1997 and September 1997 3. Ninaxia a) Guyaozi-Wangquanliang Highway, January 1997 with supplements in May 1997, September 1997, and December 1997 b) Yanchi-Xingren Highway, January 1997, with supplement in May 1997 C. Resettlement Action Plan 1. Inner Mongolia a) Baotou-Dongsheng Highway, December, 1997 with supplementary information on squatters in March 1998 b) Baiyinchagan-Fengzhen Highway, December 1997 c) 13 RAPs for 13 segments of RIPA, December 1997 2. Gansu a) Liugouhe-Zhonghe Expressway and Xujiamo-Jiepaicun Highway (no. 312), May 1998 b) First-year package of RIPA, December 1997 3. Ningxia a) Gouyaozi-Wangquanliang Highway, December 1997 b) Yanchi-Xingren Highway, December 1997 c) First-year package of RIPA, December 1997 D. Environment (EIA, EAP, Summary) 1. Inner Mongolia a) Baotou-Dongsheng Highway, December 1997 b) Baiyinchagan-Fengzhen Highway, December 1997 c) First package of RIPA, December 1997  Project Appraisal Document Page 102 Country: China Project Title: Tn-Provincial Highway Project (CN-PE-45788) 2. Gansu a) Liugouhe-Zhonghe Expressway, December 1997 b) Xujiamo-Jiepaicun Highway, December 1997 c) First package of RIPA, December 1997 3. Ninaxia a) Guyaozi-Wangquanliang Highway, December 1997 b) Yanchi-Xingren Highway, December 1997 c) First-year package of RIPA, November 1997 E. Institutional Strengthening and Training 1. Inner Mongolia, December 1997 2. Gansu, December 1997 3. Ningxia, December 1997 F. Economic and Social Impacts of Main Highways Rollins International Commercial Consulting Co. Ltd., March 1998, 4 volumes (I main report and one attachment for each of Inner Mongolia, Gansu and Ningxia). G. Highway Revenues and Expenditures Report 1. Inner Mongolia, January 1998 2. Gansu, December 1997 3. Ningxia, January 1998 H. Highway Maintenance Report 1. Inner Mongolia (March 31, 1998) 2. Gansu, December 1997 3. Ningxia, February 1997 I. Procurement Report 1. Inner Mongolia (Equipment only), December 1997 2. Gansu, January 1998 3. Ningxia, December 1997 J. Traffic Engineering Report 1. Inner Mongolia:Baotou-Dongsheng Highway, January 1998 2. Gansu:Liugouhe-Zhonghe Expressway, January 1998 3. Ningxia:Guyaozi-Wangquanliang, December 1997  Project Appraisal Document Page 103 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 16 Status of Bank Group Operations in China MOP Schedule D IBRD Loans and IDA Credits in the Operations Portfolio Generated: 05/13/98 Difference Between expected Original Amount in US$ Millions and actual Loan or Fiscal disbursements a/ Project ID Credit Year Borrower Purpose No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd Number of Closed Loans/credits: 208 Active Loans CN-PE-3591 IBRD43090 1998 PRC STATE FARMS COMMERCI 150.00 0.00 0.00 150.00 0.00 0.00 CN-PE-3606 IBRD43040 1998 GOC ENERGY CONSERVATION 63.00 0.00 0.00 63.00 0.00 0.00 CN-PE-40185 IBRD42370 1998 PRC SHANDONG ENVIRONMENT 95.00 0.00 0.00 95.00 6.00 0.00 CN-PE-51736 IBRD43030 1998 GOC E. CHINA/JIANGSU PWR 250.00 0.00 0.00 250.00 0.00 0.00 CN-PE-34081 IBRD42000 1997 PRC XIAOLANGDI MULTI. II 230.00 0.00 0.00 230.00 60.00 0.00 CN-PE-34081 IBRD42001 1997 PRC XIAOLANGDI MULTI. II 200.00 0.00 0.00 190.25 60.00 0.00 CN-PE-3590 IBRD41870 1997 PRC QINBA MTS. POVTY RED 30.00 0.00 0.00 30.00 14.80 0.00 CN-PE-3590 IDAN0280 1997 PRC QINBA MTS. POVTY RED 0.00 150.00 0.00 141.21 14.80 0.00 CN-PE-3635 IBRD4063A 1997 PRC VOC. ED. REFORM PROJ 10.00 0.00 0.00 10.00 5.00 0.00 CN-PE-3635 IDA28980 1997 PRC VOC. ED. REFORM PROJ 0.00 20.00 0.00 16.61 5.00 0.00 CN-PE-3637 IDAN0270 1997 PRC NATL RUR WATER III 0.00 70.00 0.00 66.25 3.33 0.00 CN-PE-36405 IBRD41790 1997 PRC WANJIAZHAI WATER TRA 400.00 0.00 0.00 358.66 68.66 0.00 CN-PE-3643 IBRD40990 1997 PRC XINJIANG HIGHWAYS II 300.00 0.00 0.00 268.81 30.81 0.00 CN-PE-3650 IBRD41720 1997 GOC TUOKETUO POWER/INNER 400.00 0.00 0.00 400.00 37.51 0.00 CN-PE-3654 IBRD41240 1997 PRC HUNAN/GUANG HWY2-NH2 400.00 0.00 0.00 400.00 60.00 0.00 CN-PE-36952 IDA29540 1997 PRC BASIC ED. IV 0.00 85.00 0.00 76.95 -2.91 0.00 CN-PE-38988 IBRD41610 1997 PRC HEILONGJIANG ADP 120.00 0.00 0.00 117.00 10.10 0.00 CN-PE-44485 IBRD41970 1997 SHANGHAI WAIGAOQIAO 400.00 0.00 0.00 400.00 13.10 0.00 CN-PE-34618 IBRD3967A 1996 PRC LABOR MARKET DEV. 10.00 0.00 0.00 10.00 16.90 0.00 CN-PE-34618 IDA28000 1996 PRC LABOR MARKET DEV. 0.00 20.00 0.00 15.60 16.90 0.00 CN-PE-3507 IBRD3933A 1996 GOC ERTAN HYDRO II 177.68 0.00 0.00 51.63 -48.59 0.00 CN-PE-3507 IBRD3933B 1996 GOC ERTAN HYDRO II 88.84 0.00 0.00 4.04 -48.59 0.00 CN-PE-3563 IBRD40010 1996 PRC ANIMAL FEED 150.00 0.00 0.00 150.00 59.31 0.00 CN-PE-3569 IBRD39290 1996 P.R.C. SHANGHAI-ZHEJIANG HI 260.00 0.00 7.75 141.26 8.04 -4.97 CN-PE-3589 IDA27940 1996 PRC DISEASE PREVENTION 0.00 100.00 0.00 78.99 40.98 0.00 CN-PE-3594 IBRD40280 1996 PRC GANSU HEXI CORRIDOR 60.00 0.00 0.00 60.00 12.82 0.00 CN-PE-3594 IDA28700 1996 PRC GANSU HEXI CORRIDOR 0.00 90.00 0.00 70.50 12.82 0.00 CN-PE-3599 IBRD40550 1996 YUNNAN PROV. GOV. YUNNAN ENVIRONMENT 125.00 0.00 0.00 125.00 1.55 0.00 CN-PE-3599 IDA28920 1996 YUNNAN PROV. GOV. YUNNAN ENVIRONMENT 0.00 25.00 0.00 16.54 1.55 0.00 CN-PE-3602 IBRD39660 1996 PRC HUBEI URBAN ENV. PRO 125.00 0.00 0.00 125.00 56.66 0.00 CN-PE-3602 IDA27990 1996 PRC HUBEI URBAN ENV. PRO 0.00 25.00 0.00 15.33 56.66 0.00 CN-PE-3638 IBRD40440 1996 PRC SEEDS SECTOR COMNER. 80.00 0.00 0.00 80.00 17.79 0.00 CN-PE-3638 IDA28860 1996 PRC SEEDS SECTOR COMMER. 0.00 20.00 0.00 10.05 17.79 0.00 CN-PE-3646 IBRD40450 1996 PRC CHONGQING IND POL CT 170.00 0.00 0.00 170.00 57.01 0.00 CN-PE-3648 IBRD39870 1996 SHANGHAI MUN. GOVT SECOND SHANGHAI SEWE 250.00 0.00 0.00 211.80 62.00 0.00 CN-PE-3649 IDA28340 1996 CHINA SHANXI POVERTY ALLEV 0.00 100.00 0.00 49.20 -18.53 0.00 CN-PE-3652 IBRD39860 1996 PRC 2ND SHAANXI PROV HWY 210.00 0.00 0.00 178.56 43.55 0.00 CN-PE-36950 IDA28310 1996 PRC BASIC ED. POOR III 0.00 100.00 0.00 39.91 -21.09 0.00 CN-PE-40513 IBRD40270 1996 PRC 2ND HENAN PROV HWY 210.00 0.00 0.00 198.00 33.00 0.00 CN-PE-3493 IBRD39106 1995 PRC INLAND WATERWAYS 210.00 0.00 0.00 142.81 23.10 0.00 CN-PE-3571 IBRD38976 1995 PRC RAILWAYS VII 400.00 0.00 0.00 392.00 99.00 0.00 CN-PE-3585 IBRD37880 1995 GOC SHENYANG IND. REFORM 175.00 0.00 0.00 122.24 31.24 0.00 CN-PE-3596 IBRD3874A 1995 PRC YANGTZE BASIN WATER 97.26 0.00 0.00 65.06 -20.58 0.00 CN-PE-3596 IDA27100 1995 PRC YANGTZE BASIN WATER 0.00 110.00 0.00 9.45 -20.58 0.00 CN-PE-3598 IBRD37810 1995 LIAONING ENVIRONMENT 110.00 0.00 0.00 75.09 42.98 0.00 CN-PE-3600 IBRD3847A 1995 PRC TECHNOLOGY DEVELOPME 194.99 0.00 0.00 174.53 35.44 0.00 CN-PE-3603 TBRD3773A 1995 PRC ENT. HOUSING SOC. SE 262.51 0.00 0.00 240.11 132.96 0.00 CN-PE-3603 IDA26420 1995 PRC ENT. HOUSING SOC. SE 0.00 75.00 0.00 6.20 132.96 0.00  Project Appraisal Document Page 104 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Difference Between expected Original Amount in US$ Millions and actual Loan or Fiscal disbursements a/ Project ID Credit Year Borrower Purpose No. IBRD IDA Cancellations Undisbursed Orig Frm Rev'd CN-PE-36041 IBRD38736 1995 MOF FISCAL & TAX REF. & 25.00 0.00 0.00 25.00 36.68 0.00 CN-PE-36041 IDA27090 1995 MOF FISCAL & TAX REF. & 0.00 25.00 0.00 17.73 36.68 0.00 CN-PE-3612 IBRD37870 1995 PRC XINJIANG HIGHWAY I 150.00 0.00 0.00 95.75 52.76 0.00 CN-PE-3634 IDA26550 1995 PRC MATERNAL CHILD HEALT 0.00 90.00 0.00 33.43 11.11 0.00 CN-PE-3636 IDA26510 1995 PRC BASIC EDUC IN POOR & 0.00 100.00 0.00 17.64 -.30 0.00 CN-PE-3639 IBRD39066 1995 PRC SOUTHWEST POV. REDUC 47.50 0.00 0.00 35.59 22.14 0.00 CN-PE-3639 IDA27440 1995 PRC SOUTHWEST POV. REDUC 0.00 200.00 0.00 99.00 22.14 0.00 CN-PE-3642 IBRD3846A 1995 ZHEJIANG POWER DEVT 154.15 0.00 0.00 93.74 10.01 0.00 CN-PE-3642 IBRD3846B 1995 ZHEJIANG POWER DEVT 215.67 0.00 0.00 178.66 10.01 0.00 CN-PE-3647 IDA26540 1995 PRC ECONOMIC LAW REFORM 0.00 10.00 0.00 6.02 4.51 0.00 CN-PE-36947 IBRD3848A 1995 GOC SICHUAN TRANSMISSION 270.00 0.00 0.00 196.37 136.38 48.82 CN-PE-37156 IBRD3914A 1995 PRC IODINE DEF. DISORDER 7.00 0.00 0.00 7.00 19.73 0.00 CN-PE-37156 IDA27560 1995 PRC IODINE DEF. DISORDER 0.00 20.00 0.00 11.37 19.73 0.00 CN-PE-3502 IDA25390 1994 MOH RUR HEALTH MANPOWER 0.00 110.00 0.00 40.30 25.02 0.00 CN-PE-3504 IBRD37480 1994 PRC HEBEI/HENAN NATIONAL 380.00 0.00 0.00 115.10 14.07 0.00 H'WAYS CN-PE-3540 IDA26160 1994 PRC LOESS PLATEAU 0.00 150.00 0.00 41.90 -32.76 0.00 CN-PE-3557 IDA26230 1994 PRC FOREST RESOURCE DEV 0.00 200.00 0.00 94.86 41.98 0.00 CN-PE-3562 IBRD37270 1994 PRC XIAOLANGDI MULTIPURPOSE 460.00 0.00 0.00 23.36 19.63 0.00 CN-PE-3586 IBRD3711S 1994 PRC SHANGHAI ENVIRONMENT 160.00 0.00 0.00 79.76 62.05 0.00 CN-PE-3593 IDA25710 1994 PRC SONGLIAO PLAIN ADP 0.00 205.00 0.00 58.55 -8.81 0.00 CN-PE-3595 IDA25630 1994 PRC RED SOILS II DEVELOP 0.00 150.00 0.00 46.75 7.34 0.00 CN-PE-3609 IBRD3716A 1994 GOC SICHUAN GAS DEV & 175.45 0.00 0.00 145.08 60.08 0.00 CONSERVATION CN-PE-3622 IBRD3652S 1994 SHANGHAI MUNICIPAL GOVT SHANGHAI MTP II 150.00 0.00 0.00 10.39 10.40 0.00 CN-PE-3626 IBRD3681A 1994 GOC FUJIAN PROV HIGHWAY 80.33 0.00 0.00 60.53 4.02 0.00 CN-PE-3633 IBRD3687A 1994 GOVERNMENT OF PRC TELECOMMUNICATIONS 132.76 0.00 0.00 79.19 77.68 0.00 CN-PE-3641 IBRD3718A 1994 PRC YANGZHOU THERMAL POWER 248.16 0.00 0.00 89.75 25.27 0.00 CN-PE-3644 IDA26050 1994 PRC XIAOLANGDI RESETTLEMENT 0.00 110.00 0.00 37.65 2.61 0.00 CN-PE-3473 IDA24750 1993 P.R.C. ZHEJIANG MULTICITIES 0.00 110.00 0.00 43.82 43.43 0.00 CN-PE-3509 TDA24570 1993 PRC CHANGCHUN WAT SUPP & 0.00 120.00 27.55 24.15 44.04 0.00 CN-PE-3512 IBRD3552S 1993 GOVT OF PEOPLES REP. OF C SHANGHAI PORT REST. 124.26 0.00 0.00 5.11 10.33 1.09 CN-PE-3518 IBRD3530S 1993 PRC GUANGDONG PROV. 240.00 0.00 0.00 21.43 -.59 0.00 TRANSPORT CN-PE-3526 IBRD3515A 1993 GOC SHUIKOU II 43.86 0.00 0.00 18.40 18.40 18.40 CN-PE-3533 IBRD3572A 1993 TIANJIN IND. II 82.68 0.00 0.00 56.09 48.09 3.59 CN-PE-3559 IDA24620 1993 PRC AGRIC. SUPPORT SERVI 0.00 115.00 0.00 10.43 -12.41 0.00 CN-PE-3561 IDA24110 1993 PRC SICHUAN ADP 0.00 147.00 0.00 22.59 10.36 0.00 CN-PE-3567 IDA24710 1993 PRC EFFECTIVE TEACHING S 0.00 100.00 0.00 48.24 46.40 0.00 CN-PE-3570 IBRD35810 1993 PRC RAILWAY VI 420.00 0.00 0.00 125.14 103.15 0.00 CN-PE-3580 IBRD35820 1993 PRC SO.JIANGSU ENVIRON. 250.00 0.00 0.00 29.05 13.49 0.00 PROTECT. CN-PE-3581 IBRD35310 1993 PRC HENAN PROV. TRANSPORT 120.00 0.00 0.00 16.15 15.17 0.00 CN-PE-3592 IDA24470 1993 PRC REF. INST'L.& 0.00 50.00 0.00 21.57 21.23 0.00 PREINVEST(CRISP) CN-PE-3597 IBRD3560A 1993 PRC TAIHU BASIN FLOOD 88.65 0.00 0.00 64.71 62.92 0.00 CONTROL CN-PE-3597 IDA24630 1993 PRC TAIHU BASIN FLOOD 0.00 100.00 0.00 4.92 62.92 0.00 CONTROL CN-PE-3616 IBRD3606A 1993 PRC TIANHUANGPING HYDRO 196.60 0.00 0.00 96.63 61.55 0.00 CN-PE-3623 IDA24230 1993 PRC FINANCIAL SECTOR T.A 0.00 60.00 0.00 33.95 20.13 0.00 CN-PE-3627 IBRD3624A 1993 PRC GRAIN DISTRIBUTION P 325.00 0.00 0.00 325.00 339.43 -110.07 CN-PE-3627 IDA25180 1993 PRC GRAIN DISTRIBUTION P 0.00 165.00 0.00 53.50 339.43 -110.07 CN-PE-3632 IDA25220 1993 ROC ENVIRONMENT TECH ASS 0.00 50.00 0.00 14.91 14.86 0.00 CN-PE-3486 IBRD3406A 1992 RAILWAYS V 33.73 0.00 0u00 29.05 27.37 0.00 CN-PE-3492 IBRD3412S 1992 GOC DAGUANGBA-HAINAN 28,88 0.00 0.00 2.83 .97 0.00 CN-PE-3492 ilA23050 1992 GOC DAGUANGBA-HAINAN 0.00 37.00 0.00 .42 .97 0.00 CN-PE-3503 IBRD3462A 1992 ZOUXIAN THERMAL POWE 26.78 0.00 0.00 14.02 5.63 0.00 CN-PE-3534 IBRD3471A 1992 PRC ZHEJIANG PROV TRANSP 70.13 0.00 0,00 26.59 23.59 0.00  Project Appraisal Document Page 105 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Difference Between expected Originial Amount in US$ Millions and actual Loan or Fiscal disbursements a/ Project ID Credit Year Borrower Purpose No. IBRD IDA Cancellations Urndisbursed Orig Frm Rev'd CN-PE-3544 IDA23390 1992 PEOPLE'S REPUBLIC OF CHIN EDUC DEV IN POOR PRO 0.00 130.00 0.00 4.06 -3.50 0.00 CN-PE-3555 IDA23070 1992 PRC GUANGDONG AG. DEVT. 0.00 162.00 0.00 7.36 -6.18 0.00 CN-PE-3564 IBRD3415A 1992 BEIJING MUNICIPALITY BEIJING ENVIRONMENT 32.90 0.00 0.00 28.58 27.04 0.00 CN-PE-3564 IDA23120 1992 BEIJING MUNICIPALITY BEIJING ENVIRONMENT 0.00 80.00 0.00 3.69 27.04 0.00 CN-PE-3565 IDA22960 1992 SHANGHAI METRO TRANS 0.00 60.00 0.00 3.75 .69 0.00 CN-PE-3568 IDA23870 1992 R.O.C. TIANJIN URB DEV & EN 0.00 100.00 0.00 32.32 21.01 0.00 CN-PE-3587 IDA23360 1992 PRC RURAL WAT SUPP & SAN 0.00 110.00 0.00 1.80 -.71 -10.32 CN-PE-3624 IDA23170 1992 MTN. OF PUBL.HEALTH INFECTIOUS DISEASES 0.00 129.60 0.00 51.41 41.10 32.27 CN-PE-3478 IDA22100 1991 PRC KEY STUDIES DEVELOPM 0.00 131.20 0.00 .82 -.79 0.00 CN-PE-3560 IDA22420 1991 PRC HENAN AGRIC. DEVT. 0.00 110.00 0.00 3.22 -3.51 0.00 CN-PE-3582 IBRD3337T 1991 PRC IRRIG. AGRIC. INTENS 45.05 0.00 0.00 2.37 -5.15 0.00 CN-PE-3472 IBRD2968S 1988 PRC RAILWAY IV 171.30 0.00 0.00 2.04 2.05 0.00 Total 11,370.12 4,426.80 35.30 9,283.23 3,337.36 -131.26 Active Loans Closed Loans Total Total Disbursed (IBRD and IDA): 6,529.56 12,600.48 19,130.04 of which has been repaid: 17.17 2,122.25 2,139.42 Total now held by IBRD and IDA: 15,956.86 10,120.86 26,077.72 Amount sold 0.00 0.00 0.00 Of which repaid : 0.00 0.00 0.00 Total Undisbursed : 9,283.23 4.04 9,287.27 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. b. Rating of 1-4: see OD 13.05. Annex D2. Preparation of Implementation Summary (Form 590). Following the FY94 Annual Review of Portfolio performance (ARPP), a letter based system will be used (HS = highly Satisfactory, S = satisfactory, U = unsatisfactory, HU N highly unsatisfactory): see proposed Improvements in Project and Portfolio Performance Rating Methodology (SecM94-901), August 23, 1994. Note: Disbursement data is updated at the end of the first week of the month.  Project Appraisal Document Page 106 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) Annex 17 China at a glance 4123/19 POVERTY and SOCIAL East Low- China Asia income Development diamond* Population mid-1996 (millions) 1215 1,726 3,229 GNP per capita 1996 (US$) 750 890 500 Lifeexpectancy GNP 1996 (billions USS) 906.1 1,542 1,601 Average annual growth, 1990-96 Population (%6) 1.1 1.3 1.7 GNP Gross Labor force (%?.) 1.1 1.3 117 per primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of population) 9 Urban population (% of total population) 31 31 29 Life expectancy at birth (years) 70 68 63 Infant mortality (per 1,000 live births) 33 40 69 Access to safe water Child malnutrition (% of children under 5) 16 Access to safe water (% of population) 90 49 53 Illiteracy (% of population age 15+) 19 17 34 -China Gross primary enrollment (% of school-age population) 118 117 105 h Male 119 120 112 --Low-income group Female 117 116 98 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1995 1996 - __ Economic ratios' GDP (billions US$) 160.3 378.1 755.9 916.4 Gross domestic investmentVGDP 30.3 37.8 40.8 39.2 Exports of goods and seMceslGDP 5.2 9.9 21.0 19.3 Openness of economy Gross domestic savings/GDP 30.6 33.7 42.5 41.3 Gross national savingslGDP 30.6 34.0 41.0 40.0 Current account balancelGDP -0.2 -3.9 0.1 0.5 Interest paymentslGDP .. 0.2 0.7 0.6 Savings Investment Total debt/GDP .. 5.5 16.9 15.6 Total debt service/exports .. 8.4 9.9 9.8 Present value of debVGDP .. .. .. 14.1 Present value of debt/exports .. .. .. 72.3 i Indebtedness 1975-85 1986-96 1995 1996 1997-05 (average annual growth) -China GDP 8.3 9.9 10.5 9.6 8.5 _ Low-income group GNP per capita 7.5 8.3 7.9 8.6 7.7 Exports of goods and services 17.2 13.6 13.2 8.3 8.9 STRUCTURE of the ECONOMY 1975 1985 1995 1996 II (% of GDP) d Growth rates of output and Investment (%) Agriculture 32.0 28.4 20.5 20.2 ! 30- Industry 42.8 43.1 48.8 49.0 20 Manufacturing 31.6 35.4 38.1 38.1 t Services 25.2 28.5 30.7 30.8 10 Private consumption 61.9 53.1 46.0 47.6 91 92 93 94 95 96 General government consumption 7.6 13.2 11.4 11.1 GDI OGDP Imports of goods and serces 5.0 14.0 19.3 17.1 1975-85 1986-96 1995 1996 (average annual growth) Growth rates of exports and Imports (%J Agriculture 5.4 4.3 5.0 5.1 i 40 Industry 10.4 13.5 13.9 12.1 Manufacturing 13.0 13.0 13.3 11.7 20 Serces 9.8 9.0 8.3 7.9 Private consumption 8.2 8.8 9.7 11.9 I0 9 9 General govemment consumption 9.0 9.2 .. 8.3 Gross domestic investment 9.8 10.8 16.2 7.6 -20 Imports of goods and services 22.1 11.7 10.8 8.8 Exports lmports Gross national product 9.0 9.8 9.0 9.7 Note: 1996 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete.  Project Appraisal Document Page 107 Country: China Project Title: Tri-Provincial Highway Project (CN-PE-45788) China PRICES and GOVERNMENT FINANCE 1975 1985 1995 1996 Domestic prices Inflation I%) (% change) 30- Consumer prices .. 9.2 17.1 8.3 20 Implicit GDP deflator -0.9 10.1 13.2 7.0 20 Government finance (% of GDP) 0 Currentrevenue ., 25.5 11.4 11.5 91 92 93 94 95 96 Current budget balance .. 6.7 -1.4 0.5 - GDP def. -0-C Pi Overall surplus/deficit .. -0.5 -1.7 -1.6 TRADE 1975 1985 199S 1996 - - ___ (millions US$) Export and import levels (mill. US$) Total exports (fob) .. 27,350 148,770 151,073 200.000 - Food .. 3,803 9,954 \ 10,232 Fuel .. 7,132 5,335 5,929 150,000 _- Manufactures .. 13,522 127,283 129,141 _ I Total imports (cif) .. 42,252 132,078 138,828 100,000 - Food .. 1,881 9,126 7,866 -0 ,. Fuel and energy .. 172 5,127 6,877 5000-f Capital goods .. 18,694 57,481 63,901 Export price index (1987=100) 92 133 129 so 91 92 93 94 95 93 Import price index (1987=100) .. 78 132 129 jExports I Imports Termsoftrade (1987=100) .. 118 101 100 BALANCE of PAYMENTS 1975 1985 1995 1996 - . (millions US$) Current account balance to GDP ratio (%) Exports of goods and services 7,828 28,163 147,240 153,740 4 Imports of goods and services 8,097 41,149 135,284 141,340 __ = Resource balance -269 -12,986 11,956 12,400 2- Net income 0 932 -11,774 -10,370 Netcurrenttransfers 0 171 810 1,580 . i_ _ Current account balance, 90 91 92 93 94 95 96 before official capital transfers -269 -11,883 992 3,610 .-2 - Financing items (net) .. 9,443 21,477 28,030 Changes in net reserves .. 2,440 -22,469 -31,640 -4 Memo: Reserves including gold (mill. US$) .. 16,853 80,312 111,690 Conversion rate (Iocal/US$) 1.9 2.9 8.4 8.3 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1995 1996 (mittions US$) .Composition of total debt, 1996 (mill. US$) Total debt outstanding and disbursed .. 16,696 118,090 128,817 IBRD .. 498 7,209 7,616 A IDA ,, 431 7,038 7,579 7616 57 25407 Total debt service .. 2,478 15,066 15,756 2501 IBRD .. 26 810 840 . . 2501 IDA .. 4 63 73 -- E Composition of net resource flows 21737 Official grants .. 117 328 248 Official creditors .. 1,117 7,902 4,359 Private creditors .. 2,867 5,013 6,454 Foreigndirectinvestment .. 1,659 35,849 40,180 Portfolio equity ,, 0 2,807 3,466 F F 63977 World Bank program Commitments .. 1,092 2,850 1,900 A - IBRD E - Bilateral Disbursements 565 2,269 2,097 B - IDA D - Other multilateral F - Private Principal repayments 0 364 364 C - IMF G - Short-term Net flows 565 1,905 1,734 i Interest payments 29 509 549 Net transfers .. 536 1,396 1,185 Development Economics 4/23/98 Note: The dollar estimates for China's GNP per capita, GNP and GDP are preliminary figures based on an on-going World Bank study of China's GDP. They were calculated to facilitate inter-country comparisons. Official statistics are used as the basis for all other economic analysis contained in this document.  MAP SECTION  75 85' 95, 15' Lie 125' 130' ~~~~~~~~~~~~~~~~~~~~~~~~~~~IERD 29472 55 'I -.. -V.-~~~~~~~~~~~~~~~~~~9~ i~12,i 0 RUSSIAN FEDERATION "7 N KAZAKHSTAN. . t~~~ LL""%zt>,.9 ! K. ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~ / ~i~0NC-jiANG UZBEKISTAN -HARBIN CHNCHN* t KYRGYZ