Document of The World Bank FOR OFFICIAL USE ONLY Report No: 21499 IMPLEMENTATION COMPLETION REPORT (CPL-37480) ONA LOAN IN THE AMOUNT OF US$ 380 MILLION EQUIVALENT TO THE PEOPLE'S REPUBLIC OF CHINA FOR THE NATIONAL HIGHWAY PROJECT DECEMBER 19, 2000 TRANSPORT SECTOR UNIT EAST ASIA AND PACIFIC REGIONAL OFFICE This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June 30, 2000) Currency Unit = Renminbi (RMB) = 100 Fen RMB 1.0 = US$ 0.1207 US$ I = 8.2782 FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS AXE - Anyang-Xinxiang Expressway EIRR - Economic Internal Rate of Return EMS - Electrical and Mechanical Systems GOC - Government of China GOVAI - Gross Output Value of Agriculture and Industry PCD - Provincial Communications Department MOC - Ministry of Communications MOF - Ministry of Finance NPV - Net Present Value NTHS - National Trunk Highway System IRIP - Interconnecting Road Improvement Program SAE - Shijiazhuang-Anyang Expressway SAXE - Shijiazhuang-Anyang-Xinxiang Expressway Vice President: Jemal-ud-din Kassum, EAPVP Country Director: Yukon Huang, EACCF Sector Director: Jitendra N. Bajpai, EASTR Task Team Leader/Task Manager: Jacques M. Tollie, EASTR FOR OFFICIAL USE ONLY FOR OFFICIAL USE ONLY CONTENTS Page No. 1. Project Data 1 2. Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 1 4. Achievement of Objective and Outputs 3 5. Major Factors Affecting Implementation and Outcome 6 6. Sustainability 7 7. Bank and Borrower Performance 8 8. Lessons Learned 10 9. Partner Comments 11 10. Additional Information 23 Annex 1. Key Performance Indicators/Log Frame Matrix 24 Annex 2. Project Costs and Financing 25 Annex 3. Economic Costs and Benefits 28 Annex 4. Bank Inputs 30 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 31 Annex 6. Ratings of Bank and Borrower Performnance 32 Annex 7. List of Supporting Documents 33 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Project ID: P003 504 Project Name: HEBEI/HENAN NATIONAL Team Leader: Jacques M. Tollie TL Unit: EASTR ICR Type: Core ICR Report Date: December 19, 2000 1. Project Data Name: HEBEI/HENAN NATIONAL L/C/TF Number: CPL-37480 Country/Department: CHINA Region: East Asia and Pacific Region Sector/subsector: TH - Highways KEY DATES Original Revised/Actual PCD: 05/15/92 Effective: 10/24/94 10/24/94 Appraisal: 06/18/93 MTR: Approval: 06/07/94 Closing: 06/30/2000 06/30/2000 Borrower/lImplementing Agency: PRC/HEBEI & HENAN PROVINCES Other Partners: STAFF Current At Appraisal Vice President: Jemal-ud-din Kassum Gautam Kaji Country Manager: Yukon Huang, EACCF Nicholas Hope Sector Manager: Jitendra N. Bajpai, EASTR Richard Scurfield Team Leader at ICR: Jacques M. Tollie Jose Veniard ICR Primary Author: Ephrem Asebe and Jacques M. Tollie 2. Principal Performance Ratings (H-IS=ighly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability: L Institutional Development Impact: SU Bank Performance: S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 Original Objective: The project was designed to: (a) relieve transport congestion and improve the integration of inter-regional commerce by assisting in the development of National Highway 107 between Hebei and Henan; (b) facilitate access within the area of influence, ensuring that the benefits of improving the trunk road extended to a wider area by rehabilitating and expanding the critical sections of the major roads interconnecting with the section of National Highway 107 concemed; (c) strengthen the interprovincial coordination of trunk road operations and promote the free flow of goods and travelers between Hebei and Henan; and (d) strengthen the provincial highway agencies in road investment planning, highway management and maintenance, and traffic safety. The project objectives were clear, focused and responsive to the development needs of the provinces. They also had high national priority since Route 107 is a key element of the National Trunk Highway System (NTHS) in the principal North-South transport corridor. Facilitation of interprovincial trade was one of the priorities identified in a Bank sector strategy report titled Highway Development and Management Issues, Options, and Strategies (February 1994). As such, the objectives were in line with the Banks Country Assistance strategy which supported sectoral reforms and investments aimed at removing infrastructure bottlenecks and modemizing the transportation system and its management. 3.2 Revised Objective: None 3.3 Original Components: The project comprised (a) the construction of the 340 km long Shijiazhuang-Anyang-Xinxiang Expressway (SAXE), a four-lane, access-controlled toll highway of which 216 km are in Hebei and 124 km in Henan, including service facilities; (b) an Interconnecting Roads Improvement Program (IRIP) for upgrading 14 provincial highways interconnecting at interchanges with the expressway; (c) the coordination of expressway operations between Hebei and Henan and a study of facilitation of interprovincial traffic flows; (d) a study of highway capacity; and (e) institutional strengthening through training and equipping of selected agencies in Hebei and Henan Provincial Communications Departments (PCD). T'hese components are well related to achieving the project objectives: (i) the SAXE would complete the gap on the NTHS between Beijing and Zhengzhou, capital of Henan Province and a main transport hub at the intersection of the north-south Route 107 and the east-west Route 310 (the latter being improved under ongoing and planned Bank operations); (ii) the IRP would help counter the prevalent approach to confine the development of the NTHS to the expressways themselves, benefiting mostly end-to-end traffic and limiting sharing in the project benefits by the area alongside the expressway; and (iii) on the institutional side, the project would focus on the interprovincial coordination of highway planning and management, through the promotion of long-distance trade and the development of highway capacity guidelines based on Chinese conditions. As a bi-provincial undertaking, the approach brought significant departure from previous highway projects which were exclusively province-based, a risk which was rightly accepted in view of the expected rewards. 3.4 Revised Components: The IRIP was modified to take into account to the updated development needs of the areas traversed by the expressway. In Hebei, the program was expanded to accommodate six additional interconnecting roads including a new interchange, while in Henan one road was deleted from the program because it was to be improved under local funding. In addition, there were two modifications to the Henan portion: (i) the upgrading works between Xinjiang (the southern end of SAXE) and Zhengzhou were added to the project, and (ii) because of delays in the procurement of the E&M works on the Henan section, their financing was transferred from the loan to local funding. No restructuring was needed. - 2 - 3.5 Quality at Entry: The quality at entry is considered satisfactory, based on the relevance of project objectives, the quality of the technical, economic and financial analyses, the implementation readiness, and the overall risk assessment. In particular, the assumption that the critical interprovincial coordination was a medium-risk/high-reward objective was reasonable. Like most Bank financed projects of that period, the performance indicators were not explicitly developed; they were however retrofitted in the project at an early stage of project implementation. 4. Achievement of Objective and Outputs 4.1 Outcome/achievement of objective: The project has substantially achieved its major development objectives, the main shortcoming being the delays in the installation of the traffic engineering systems on the Henan section expressway. The overall satisfactory rating is based on the performance indicators shown in Annex 1. The physical targets have been substantially met with satisfactory economic returns. Traffic increased significantly in the SAXE corridor (albeit at a lesser rate than forecast), putting however more pressure on southem sections of Route 107 which needed increased capacity (see para 4.2.1 below). Delays in implementation of the traffic engineering works have been compensated by manual operation of some functions of the expressway and continued cooperation between the two expressway operators. The IRIP has substantially expanded the zone of influence of the expressway, as witnessed by the agricultural and industrial output value index which shows a steady increase in all counties affected by the project. The training of staff has resulted in better performance of the entities in Hebei and Henan PCD that were selected for strengthening under the project. Several of the recommendations of the Traffic Facilitation Study have been implemented and an action plan has been developed for further implementation. The Highway Capacity Study has been considered a "best practice" in terms of collaboration between Hebei, Henan and MOC, and resulted in an useful final product. Finally performance with safeguard policies including environmental, cultural property, and involuntary resettlement has been satisfactory. 4.2 Outputs by components: 4.2.1 Traffic congestion relieved and mobility increased in the main corridor. The satisfactory implementation of the SAXE and IRIP components has significantly eased traffic operation and increased mobility in the corridor. Both sections of the expressway (Shijiazhuang-Anyang Expressway or SAE in Hebei, and Anyang-Xinxiang Expressway or AXE in Henan) were concurrently opened to traffic by the end of December 1997. In Hebei, the traffic engineering works on SAE involving the supply and erection of the electrical/mechanical systems (EMS) comprising the surveillance/control system, the toll system and the communication system- was completed satisfactorily in May 2000. However in Henan, results of the 1996 tender call were rejected in 1999 because the bids were considered no longer valid. Re-bidding under the project would have required an extension of the loan closing date by at least two years. Henan PCD preferred instead to procure the EMS contract using their own funds. This delay resulted in a somewhat lower level of service of the expressway, in particular because of manual operation of the toll collection system. During implementation, the government decided to extend the expressway to the south, by constructing the Xinxiang-Zhengzhou Expressway (XZE) along a new alignment with a new bridge on the Yellow River to the east of Zhengzhou This was expected to be the long-term solution to the capacity requirements in this section, but in the meantime the existing Xinxiang-Zhengzhou highway remained heavily congested. It was - 3 - then agreed to finance the upgrading of this section of Route 107 using loan savings, considering that the new XZE would not be completed before 2004. 4.2.2 Supervision of construction. The supervision of SAE and AXE was carried by two joint Chinese/foreign consulting companies. Both joint supervision teams have performed satisfactorily in assuring the quality of the works. The joint-team approach provided the local staff with extensive experience in the supervision of high grade highway construction. 4.2.3 Coordination between Hebei and Henan. The two provinces have coordinated very well during the design, construction and operation phases of the project. The joint toll station at the provincial boundary was the first in China and became a model for similar stations including the one at the Shaanxi-Henan border (under Shaanxi II and Henan II Provincial Highway Projects). Further, the two provinces cooperated very closely in the toll studies and in narrowing the gap between the tolls to be charged in each province. Also, there were agreements on joint handling of major traffic accidents as well as other aspects of expressway policing. The interprovincial coordinating committee played a key role during implementation of the two studies. The recommendations of these studies were jointly discussed and implemented. In the later stages of project implementation, both provinces issued a joint annual monitoring report to track the performance indicators. 4.2.4 Traffic Facilitation Study. This study addressed a wide range of issues relevant to the modemization of the road transport industry. Assessments and recommendations covered the improved utilization of road vehicles, changes in axle load and introduction of larger vehicles, inter-modal transport, containerization and logistics, cargo consolidation terminals, toll structures, and policy and institutional reforms towards deregulation and professionalization of the road transport industry. Both provinces have started implementing several of the recommendations of the study. 4.2.5 Highwa Capacity Study. This study provided a major input to the development of the Chinese Highway Capacity Manual undertaken by MOC. Technical reviews were carried out and the findings were disseminated. At the provincial level, the guidelines for highway capacity analysis have been used in road planning, including feasibility studies and design of interurban highways. 4.2.6 Impact of Land Acquisition and Resettlement. The impact of the project can be summarized in the following two tables: A. Hebei portion SAE IRIP Planned Actual Planned Actual Land acquisition (mu) 23,874 26,282 6,384 6,547 House demolition (sq.m) 16,604 24,587 5,566 5,566 People aff. By relocation 222 330 165 219 Resettlement cost (Ymil) 190.81 302.73 63.92 81.75 -4 - B. Henan portion AXE IRIP XZH upgrading Planned Actual Planned Actual Planned Actual Land acquisition (mu) 9,336 10,876 n.a. 349 1,878 2,023 House demolition (sq.m) 8,832 14,274 n.a. 8,930 11,907 22,743 People aff. By relocation 277 304 n.a. 1,137 760 1,368 Resettlement cost (Ymil) 78.59 125.38 n.a. 1.95 37.23 42.08 The larger than expected impact explained that the resettlement costs were increased by about 60% both on the SAE and the AXE. The increased costs were due (i) in Hebei to the increase of temporary land use and the design changes, and (ii) in Henan to the larger requirements in terms of land and assets and the higher compensation rates for the affected assets. After land redistribution, the land holding capacity was reduced by less than 10% for each affected person. The productivity was however not adversely affected owing to the construction of farmland irrigation works and assistance in the development of a more diversified economy in the rural areas. The livelihood was indeed improved by completion of public infrastructures and service facilities in the affected villages. The evaluation of the livelihood of the project affected people (PAP) undertaken by the independent monitoring unit showed that the net income of all affected persons have been improved. The resettlement objectives have been met, i.e. restoration and improvement of income, livelihood and productivity of the PAP. All activities planned in the Resettlement Action Plan have been completed. 4.2.7 Environmental Management. Since the SAXE corridor traverses mostly flat terrain in Hebei and Henan, construction of the expressway was expected to have only very limited adverse impact on the environment. Major environmental issues were rightly identified in the Environmental Assessment report as dust and noise pollution in the construction and operation phases, and drainage and embankment protection. The engineering design and technical specifications provided specific treatments for the protection of embankment slopes and roadside drainage, which were applied during the construction and operation phases. No unforeseen adverse environmental problem emerged. Environmental monitoring reports were delivered on time to relevant parties in accordance with the project requirements. Some erosion or slope failures were reported on the higher embankment sections in times of heavy rains, however both PCDs were well equipped to handle such emergencies promptly and efficiently. Also, reduction of noise in towns and villages along the SAXE was generally effective, owing to appropriate mitigation measures such as noise barrier installation. Control of air pollution has been more problematic in some areas, since factors were mostly outside the purview of the implementing agencies. Both PCDs are aware of the need for continuous environmental monitoring during operation, and have taken steps in this respect. 4.3 Net Present Value/Economic rate of return: The Expressway. The ex-post Economic Internal Rate of Retum (EIRR) of the expressway is estimated to be 14.1 % versus the SAR estimate of 22.9%, and the Economic Net Present Value (ENPV), at a discount rate of 12%, is estimated to be RMB 1.28 billion versus RMB 6.06 billion. The recalculated EIRR and ENPV are lower than anticipated at appraisal mainly because of increases in the project costs and lesser increase in traffic. Also assumptions about traffic diversion (from existing Highway 107 to the expressways) did not materialize, especially in Hebei, because of improvements brought to parallel sections of Highway 107. The detailed economic analysis is in the Project ICR Files (Annex 7) and a summary is provided in Annex 3. Interconnecting Roads Improvement Program (aRIP). The total number of the roads under IRIP increased from 14 roads to 19 roads. The EIRR for the RIP as a whole is estimated at 22.3% versus the SAR estimate of 39.9%. The roads under IRIP are located along the expressway and traffic on most of these roads was also less than projected at appraisal. Also the total economic cost of IRIP increased substantially. Because of the changes in project scope, the evaluations of the IRIP under the ICR and the SAR are not fully compatible. Details are provided in Annex 3. EIRR and NPV for the total project. The EIRR and ENPV for the SAXE and the IRIP in both provinces are estimated to be 15.1% and RMB 2.1 billion, respectively, compared with 24% and RMB 7.44 billion estimated in the SAR. 4.4 Financial rate of return: The financial evaluation of the project is focused on the expressway whose cost constituted about 88 percent of total project cost, and which generates revenues through tolls. At the opening to traffic in December 1997, both PCDs established separate highway agencies to operate the expressways. The toll charges are the main revenue for the companies, which is strictly controlled by the government. The basic principle for toll collection on the SAXE has been repaying the Bank's loan, rather than maximizing the financial rate of return (FRR) on the investment. Combined with the high construction cost and lower traffic, this principle leads to an estimated FRR for the total investments in Hebei and Henan of -4.6% and -5.2%, respectively. This does not allow for adequate depreciation of the assets, and government financial assistance would be needed for major maintenance works when they come due, unless and until more progress is made on toll highway commercialization. 4.5 Institutional development impact: The project has had a substantial institutional development impact, as noted above. All the agencies in both provinces involved in the preparation, implementation and operation of the project have shown significant improvement in their performance. Through the joint-team operation approach followed in supervision activities as well as in the studies, chinese staff have had opportunities to get acquainted with modem technologies. Measures taken to strengthen, through training and provision of specialized equipment, the institutions within both PCDs were effective. The two studies provided methodological approaches and a collaborative (MOC, provinces, intemational experts) management model which were useful in other studies. 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or implementing agency: The major factor outside the control of government that affected project outcome was the extemal economic conditions. Both expressways opened to traffic in late 1997, at a time when an economic and financial crisis swept across Asia. This had an adverse effect on the demand for transport, and slowed down the build-up of traffic on SAE and AXE. Signs that traffic growth has recovered are apparent from preliminary data for year 2000. Globally, the impact on the economic viability was slight, but it was more important on the financial viability. 5.2 Factors generally subject to government control: Delays occurred in the procurement of the EMS works, resulting in the expressways being opened to traffic without the benefits of efficient tolling and traffic surveillance systems. The main reasons were traced to - 6 - the lengthy procedures for (i) the design and preparation of bidding documents, (ii) the preparation of the evaluation reports, and (iii) for the internal clearances both at central and provincial levels. These factors played more forcefully in the case of Henan (which would have needed a two-year extension of the loan closing date to complete the EMS component) than in the case of Hebei (which was able to complete the EMS works by the closing date). In the end, Henan agreed to implement the EMS component under local funding, in accordance with an implementation schedule which was reviewed by the Bank and found acceptable. Records regarding traffic safety have been mixed. The expected drop in traffic accidents subsequent to the opening of the expressways did not materialize. A main factor impacting on the safe and efficient operation of the expressway is the good cooperation between the PCDs and the Traffic Police in charge of enforcement. The Leading Group for Coordination set up under the project was more successful with the cooperation amongst the two PCDs than between the latter and the Traffic Police. 5.3 Factors generally subject to implementing agency control: Both Hebei and Henan PCDs adopted the "two provinces -one project" stance, which led to very effective inter-provincial coordination of critical activities under the project. This strong cornmitment both at management and working levels did mitigate the risks that this first National Highway Project would just be the juxtaposition of two parallel provincial projects. There was value added in the search for harmonization in the design, construction and operation of the expressways, as well as in the joint implementation of the studies. 5.4 Costs and financing: As presented in Annex 2a, the total project cost in US dollar equivalent was almost identical to the appraisal estimate, showing that the physical and price contingencies were overall adequately assessed. On the physical side, the following points can be made: (a) in addition to the expansion of the IRIP component, there was an increase in the construction standards in Hebei, especially with regard to bridge abutments and the wearing course; (b) in Henan, the requirements for land acquisition and resettlement under the AXE and the upgrading works led also to a sharp increase in the final cost; and (c) both provinces had to deal with an increase in the number and often size of underpasses and culverts, and an enhancement in the quality of the service areas and toll stations. Costwise, it is worth noting that in 1994 price escalation was high in China and the appraisal cost estimates reflected this high inflation. However, in 1995 the Renminbi was devalued against the dollar and price escalation decreased appreciably; also severe competition among civil works contractors led to lower capital costs. The use of loan funds, broken down into ICB, NCB, and other procurement methods, did not differ significantly from the SAR estimates, as shown in Annex 2b. The proportion of NCB procurement in Hebei increased because of the expanded IRIP in that province. Regarding project financing, the Bank loan was used up to 94% on average. It was fully disbursed in Hebei, and only up to 84% in Henan because of a reduced IRIP and the transfer of the EMS component to local funding (Annex 2c). 6. Sustainability 6.1 Rationale for sustainability rating: The project is likely to be sustainable when considering the achievements under each of the components, and sustainability is enhanced by follow-up projects, as argued below: -7 - (i) Traffic congestion has been remedied in the Shijiazhuang-Xinxiang corridor. The gap existing to the south is being tackled under the Xinxiang-Zhengzhou expressway construction project financed with domestic and Japanese funds. Once the latter is completed, the north-south traffic traversing Hebei and Henan will be facilitated. (ii) The IRIP component has greatly enhanced accessibility and mobility, and broadened the zone of influence of the SAXE. The program is being expanded by further investments in both provinces to improve the connections with rural roads. (iii) The Highway Capacity Study has led to significant transfer of technology to local staff. The study has also been an important input for MOC in the preparation of the Chinese Highway Capacity Manual. (iv) Important recommendations of the Traffic Facilitation Study have been implemented, and an action plan has been developed for further implementation. In the case of Henan, this action plan is to be monitored under the Third Henan Highway Project which is expected to become effective in early 2001. 6.2 Transition arrangement to regular operations. The SAE and AXE were opened to traffic in December 1997. Operation and maintenance of the expressways have been generally satisfactory except for the lack of traffic engineering equipment, and tolls were collected manually. Also traffic safety has remained an issue, requiring continuous coordination and improved cooperation with the Traffic Police. At the end of the project, the E&M systems have become operational on the SAE and the level of service is expected to be substantially improved in terms of (i) waiting time at the toll booths, and (ii) incident -or accident- response time with the use of the emergency telephone and other traffic surveillance systems along the expressway. Manual systems will be used on the AXE for about two more years. In addition, level-of-service type indicators, similar to the ones used in more developed expressway networks, will be used by the expressway agencies to monitor their operation. 7. Bank and Borrower Performance Bank 7.1 Lending: During project identification and preparation, Bank staff was working concurrently on an important piece of sector work titled Highway Development and Management Issues, Options and Strategies. This helped ensure the design was firmly grounded in the sector assistance strategy for the mediurn term. The Bank was also selective in the range of sector issues to be addressed in this particular project, and the final choice (facilitation of inter-provincial traffic and formulation of highway capacity standards) was highly relevant and supported by the Borrower and the two PCDs. During appraisal, the major risks were considered to be (i) delays in the completion of the expressways, and (ii) the lack of experience in inter-provincial coordination to the extent required to achieve the project objectives. The measures designed to mitigate both risks proved effective, except for the traffic engineering components which were still new to the agencies and would have warranted a stricter set of preparation and implementation guidelines. Like in other Bank projects of the period, performance indicators were not explicitly developed. The provinces later retrofitted specific performance indicators. - 8 - 7.2 Supervision: Bank supervision focused on facilitating a smooth cooperation between the two provinces, and several coordinating meetings were attended by Bank missions. The Bank showed responsiveness and flexibility in approving needed modifications, in particular regarding the expansion of the IRIP in Hebei or the addition of the upgrading works in Henan. In both cases, a mini-appraisal was conducted to ensure compliance with the project requirements. In the case of the EMS component in Henan, even though it would not be funded from the loan, the Bank made it clear that this component remained an integral part of the project and that its implementation should ensure a safe and an efficient operation of the AXE. Bank involvement was also critical in the two studies, where staff provided useful advice to improve quality of the analyses and recommendations. The Bank conducted 12 supervision missions from 1994 to 2000, a little less than 2 missions per year on average. A total of about 90 staff-weeks were spent on supervision activities. Efficiency gains were achieved by Bank missions dealing with several projects during each stay. Continuity of staffing on the project was generally achieved, but the skill mix was limited. Resettlement and environment staff provided specialized reviews during the critical phases of the project, but could have been used more widely. As available resources from the field office increased, they were tapped accordingly. 7.3 Overall Bank performance. Overall, Bank performance was satisfactory for the reasons noted above. Borrower 7.4 Preparation: All aspects of project preparation were handled satisfactorily, in spite of the technical and managerial complexity of the project, compounded by the difficulties to coordinate between the two provinces. During the preparation phase, stakeholders commitment was high. The government team was responsive to the feedback provided by the Bank and was quick to respond to the changing assumptions and conditions during the preparation of the project (for instance, it was agreed that sections totaling about 10 km of the expressway around Shijiazhuang would be designed as 6-lane facilities to improve the coordination of expressway planning with city plans). 7.5 Government implementation performance: Both the Ministry of Communications and the State Planning Conmmission were supportive of the project. MOC was itself involved in the Highway Capacity and Traffic Facilitation Studies and this contributed to the high quality of the studies and the implementability of their recommendations. However, the process for obtaining internal clearances for bidding documents and evaluation reports was much slower than expected, due to the cumbersome internal processes involving both provincial and central agencies, especially with regards to the EMS components. 7.6 Implementing Agency: Coordination between Hebei and Henan PCD was smooth and joint activities like the two studies were carried out in a satisfactory manner. Both PCDs were alert to adapt the project to changing circumstances, and to suggest changes to project components accordingly, as in the case of the IRIP in Hebei or the -9- upgrading works on Xinxiang in Henan. Civil works were procured and supervised in accordance with agreed procedures. However there was some failure to anticipate the difficulties of procuring complex works like the EMS. In the case of Henan, the lessons from the first Henan Provincial Highway Project had been useful, in that the EMS bids were opened reasonably on time, in November 1996. However it took more than two years for the bid evaluation report to reach the Bank, in March 1999. In the end the Bank could not accept the recommendations of the report, and it was agreed that the EMS component on the AXE would be implemented under local funding. 7.7 Overall Borrower performance: Overall, borrower implementation performance is considered satisfactory. 8. Lessons Learned 8.1 Interprovincial Cooperation. The project has shown that interprovincial cooperation is an ambitious undertaking but can succeed with good preparation and management. Benefits in terms of promotion of long-distance trade are obvious. This lesson has been learned in the subsequent National Highway Projects financed by the Bank. 8.2 Implementation of EMS cRmponents. Delays in the timely completion of these components have prevented an optimal operation of the assets built under the project. Similar delays have occurred under other Bank-financed projects implemented in the mid 1990s. Recommendations have been made for a stricter control of the procurement schedule of these components. However these recommendations are valid not only for the implementing agencies, but also for the many central government agencies involved in the clearance process. 8.3 Drive towards commercialization of toll hinhwavs. Both provinces have recognized the limitations of operating their expressway under a Branch of Government type of organization. This entails constraints which hinder the financial viability of the project. In order to enhance the sustainability of this type of project, both provinces have agreed to take steps for further commercialization of their respective expressway management companies. 8.4 Coordination of expressway planninz with city plans. Five main cities are located in the SAXE corridor. The expressway affects the growth of those cities and their land use and transport plans. It is important that this aspect receive special consideration in the planning and design of the expressway so as to cater for existing needs and the needs over the next 20 years or longer. This affects the location of the expressway and number of lanes to be provided; the number of interchanges, location, type and geometrics of the interchanges; the number of grade separations and the cross section of the under-structures as well as the need to convert some of those structures to interchanges in the future. This issue was critical in the case of the upgrading of the Xinxiang-Zhengzhou Highway which ends in the northern part of Zhengzhou. A mechanism has to be worked out to improve coordination between the municipalities and the PCD in such cases. - 10 - 8.5 Efficiency of technical assistance (TA). The efficiency of TA in Highway Projects has sometimes been questioned in terms of its high costs and limited effectiveness as perceived by some provinces. The TA provided for the two studies under this project has been considered successful by all parties involved, and the ingredients for success appear to be: (i) firm grounding in a sectoral strategy, (ii) support from MOC as well as the provinces, (iii) good selection of local and international teams, (iv) appropriate arrangements for the conduct of the studies and their dissemination, and (v) recognizing that the process of change may take time, devise action plans for short-term and long-term recommendations. 9. Partner Comments (a) Borrower/implementing agency: Hebei PCD Assessment Summary (full assessment in Project ICR Files) Introduction 1. Hebei section of China-National Highway Project was appraised in July 1993. The Loan and project Agreements were negotiated from February 28 to March 5, 1994 and were signed. On October 24, 1994, the Agreements and a loan of US$240 million were approved by the Board of Executive Directors. The Agreements and the loan were declared effective on July 25, 1994. Closing date of the loan was June 30, 2000 in the Staff Appraisal Report (SAR), but the account was actually to be closed on October 31, 2000. A. Proiect Descrintion 2. The major objective of the Project was to mitigate traffic congestion of the existing National Highway 107 and to form national traffic network. 3. The Project consists of: (a) construction of a 216.05 kIn, four-lane divided with the access controlled expressway; (b) construction of 17 interconnecting roads of 179.788 km; (c) consulting services for construction supervision and training; (d) highway capacity study; (e) procurement of maintenance equipment; (f) traffic control and surveillance, telecommunication and toll systems; (g) staff training; (h) improving road safety. B. Achievement of Proiect Obiectives 4. All major objectives of the Project were achieved for various components including: (a) 216.05 km Shijiazhuang-Anyang Expressway Project, traffic control and surveillance, telecommunication and toll systems as well as service areas along the Expressway; (b) 17 interconnecting roads of 179.788 kcm; (c) consulting services for construction supervision and training; (d) highway capacity study; and (e) staff training. - 11 - C. Proiect Identification 5. Preparatory work of the Project started in March 1992. Bank procedures as well as local procedures for infrastructure projects were applicable to the project and were gone through. LOCAL PROCEDURES BANK PROCEDURES Subject Date of Approval Subject Date of Approval Document Code 1 Project recommendations Aug. 31, 1992 Project Identification Mar. 18-27, 1992 No. 1431JJT (1992) 2 Feasibility study Mar. 17, 1993 Project Preparation Mar. 16-25, 1992 No. 396JJT (1993) 3 Preliminary design Mar. 14, 1993 Project Pre-appraisal Mar. 16-25, 1993 No. 630JGF (1993) 4 Report for comnuencement Oct. 20, 1994 Project Appraisal July 2-13, 1993 No. 1312JTZ (1994) No. 1340JTZ (1994) 5 Loan Negotiation Feb. 28-Mar. 5, 1994 6 Approval of Loan Oct. 24, 1994 Agreement D. Proiect Plannin2 and Desi2n 6. Implementation of the Project would help in: (a) introduction of improved road planning techniques; (b) improving specifications for design and construction and contract documents; (c) supporting the Province's move to competitive bidding for civil works and developing institutional capacity for supervision of civil works construction; (d) training of staff; and (e) forming highway network. 7. To accomplish these objectives, project scope was defined including: (a) construction of 216.05 km 4-lane Expressway with the access controlled connecting Beijing-Shijiazhuang Expressway and going to the south; (b) construction of 17 interconnecting roads; (c) consulting services for construction supervision and training; (d) provision of equipment for traffic control and surveillance, telecommunication and toll systems; (e) provision of equipment for maintenance; (f) improving road safety; and (g) training of staff. E. Proiect Implementation 8. Highwav Capacity Study. The two provinces of Hebei and Henan coordinated very well in their joint implementation of the Highway Capacity Study. The Study was completed in March 1999 and was expected to provide a major input to the development of Chinese Highway Capacity Study Manual. Technical review was carried out and findings were disseminated. It provided for the Chinese members of the joint study team a good forum to acquaint themselves with current technical advances in their respective fields. Objectives of the Study was achieved. 9. Shi-An Expressway. The Expressway was composed of 9 contract sections for civil works. Construction was commnenced in August 1994 and completed by the end of December 1997. The 9 civil - 12 - works contracts were awarded under international competitive bidding (ICB). Joint local and foreign consultant services were applied for construction supervision. Construction of the 17 interconnecting roads was done in three stages. Construction of the roads of Stage I started in August 1994 and that of Stage II in July 1997 and they were completed in December 1997 and December 1998, respectively. ICB was also adopted for award of the Electrical and Mechanical (E&M) Contract. Construction of the E&M Contract commenced on June 21, 1997 and completed in April 2000. Other relevant works such as building works including toll stations, control centers and service areas were divided into 10 contracts which were awarded under local competitive bidding (LCB). Construction of these started, respectively, in September 1996 and October 1997 and completed in 1998. 10. Consulting Services for Construction Supervision. Snowy Mountains Engineering Corporation (SMEC) of Australia succeeded in the bidding and was awarded the contract for providing consultant services for construction supervision and training. Allocation of loan for this work component as well as the contract price was US$3.80 million. Revised contract value was A$4,575,452. Actual payment was A$3,806,488.01. This contract was completed at the same time with contracts of civil works. Total man/months of consulting services were 188.5. 11. Maintenance Eguiment. Amount of allocation of loan for this component was US$10.38 million in the SAR. To ensure smooth medium-size maintenance as well as overhaul after completion of construction, amount of loan for this component was increased to US$13.10 million upon approval by the State Planning Commission (SPC). Procurement was finished in December 1996. 12. Traffic Control & Surveillance. Telecommunication and Toll Systems. Bidding documents for this component were issued on May 14, 1996. The contract was awarded to Huaneng Basic Industrial & Investment Corporation (Huaneng). It was responsible for organization and coordination of the systems. Among the three systems, Alcatel was responsible for design and installation of the telecommunication system. Apart from that, it was also responsible for coordination of technical aspect. Honeywell was responsible for design and installation of traffic control system. Contract was signed on May 23, 1997 and the construction period was 24 months with a total cost of US$20.89 million. The contract came to its defect liability period in April 2000. - 13- 13. Staff Training. According to the SAR, comprehensive training program involved training of 38 persons for 79 man-months at an estimated cost of US$553,000. Training program actually implemented included 66 persons for 81.8 man-months at a cost of US$489,886. Training courses conducted included: Implementation Subject Consultants No. of Man- Year Trainee month 1 1995 Highway finance BCEOM, France 3 2.1 2 1996 Hwy. constru. Management Amman & Whitney, 2 1.4 USA 3 1996 Traffic engineering Saint-co, Spain 5 3.5 4 1996 Hwy. transportation planning FinRoad, Finland 5 3.5 5 1996 Operation management CS Route/ENPC, 5 3.5 France 6 1997 Human resource development TTA, Canada 6 4.2 7 1997 Project management and SOWI, UK 8 16.0 Procurement 8 1997 Expressway design Louis Berger, USA 4 12.0 9 1997 Finance management BCEOM, France 6 6.0 10 1997 Pavement cons. management Snowy Mountains, 6 6.0 Australia 11 1997 Equipment management and Hoss Equipment, USA 5 7.5 Application 12 1998 Maintenance management VicRoad, Australia 6 6.0 13 1998 Design of traffic engineering CS Route/ENPC, 5 10.0 France Total 66 81.8 Objectives of the training program were satisfactorily achieved as those trained abroad became much acquainted with the most advanced and up-to-date techniques of highway project management. They put what they learned during their overseas training into actual work and played a valuable role in their daily work. Knowledge was renewed and visions were widened. HPCD owed a lot to the Bank's provision of such opportunities for HPCD's staff to be promoted both in their highway project management level and in their professional level. F. Operations 14. Operation of the Expressway as well as other project components is good. 15. Shi-An Expressway. The Expressway was opened to traffic in December 1997. Operation is very good since its opening three years before. Average daily traffic is 9500 which is higher than projected. Toll revenue in 1999 was RIM 320 million Yuan. Social benefit as well as economic benefit of the Expressway are significant which is greatly helpful to the Province and the Project area. At the beginning of the construction, Shi-An Expressway Construction Management Division (Shi-An ECM Div.) was established. After completion of the construction, it was changed to Shi-An Expressway Management Division (Shi-An EM Div.) to be mainly responsible for maintenance and operation of Shi-An Expressway. - 14 - G. Works by Contractors and the Engineer 16. International competitive bidding (ICB) was applied for construction of civil works of the Expressway. Civil works were composed of 9 contracts: Contract Length (km) Contractor A 11.855 Highway Engineering Bureau of Hebei Province B 21.095 No. 1 Highway Engineering Corp. of MOC C 29.644 Highway Engineering Bureau of Hebei Province D 27.230 Div. No. 3 of 17th Engineering Bureau of MOR E 35.455 No. 5 Municipal Engineering Company Limited of Tianjin City F 19.067 No. 1 Municipal Engineering Company of Tianjin City G 12.033 No. 2 Municipal Company of Beijing City H 24.125 No. 19 Engineering Bureau of MOR I 35.546 Highway Engineering Bureau of Hebei Province, and Beijing City Engineering Bureau Total 216.050 There were 17 interconnecting roads which were implemented in three stages under local competitive bidding (LCD). For the E&M contract, contractor was Huaneng Basic Industrial & Investment Corporation. Building works were composed of 10 contracts and were implemented in two stages under local bidding. 17. Construction Period. Construction periods for different project components were as follows: 10 contracts of civil works for 36 months, E&M contract for 34 months, first stage building works for 18 months, second stage building works for 13 months. Major quantities of civil works included 2336.32 cu.m earth works, 6 super-large bridges, 13 large bridges, 53 medium-large bridges, 392 underpasses, 134 culverts, 16 interchanges, and 37 grade separations. Pavement was 70-75 cm thick. Quality and status of operation of Shi-An Expressway were good. 18. Snowy Mountains Engineering Corporation (SMEC) of Australia mobilized 8 technical personnel to carry out supervision for three years together with local staff. SMEC engineer worked closely with local supervisors to enhance organization and management. Altogether SMEC provided 1885. man-months services for construction supervision and training. The Bank expressed its satisfaction for this. 19. Work by the Engineer. ICB was applied for construction supervision. The Engineer controlled construction quality, construction progress and payment by following the conditions of contract, supervision procedures and FIDIC conditions. To ensure construction quality, the Engineer applied a thorough supervision system. In detail work done by the Engineer included; no material was permitted to enter the site if not tested; construction was not permitted to start if test was not reviewed; stand-by supervision was applied and next step was not allowed to start if previous work was not accepted; no payment was to be made for works done but not accepted and signed by the Engineer. Strict supervision procedures ensured construction quality. - 15 - 20. Experience. Abundant experience was achieved through construction of the Shi-An Expressway Project which included: (a) establishment of complete quality assurance system (self-inspection of contractors, stand-by supervision, sample inspection by supervisors, and government monitoring) significantly ensured quality; (b) high standard and rigorous requirements could ensure high quality; (c) establishment of competition and inspiration mechanism could enhance quality and expedite progress; and (d) embrace of Bank's requirements and guidance could ensure smooth work. H. Work by Executing Agency 21. Project Preparation. HPCD made full preparation for construction of Shi-An Expressway. In 1992 preparation of feasibility study report was finished and in February 1993 the report was approved. From October 1992 to November 1993, joint design of the Expressway was carried by the Highway Planning & Design Institute together with No. 2 Highway Survey & Design Institute and No. 1 Highway Survey & Design Institute of MOC. 22. Project Implementation. To implement Shi-An Expressway project, a construction leading group was set up by Hebei Province. In March 1992 HPCD set up its construction leading group naming the international financial institutions loan project office (IFILPO) to be responsible for project management including coordination, land acquisition, resettlement, finance management and quality management. 23. Experience. The Employer worked out relevant measures based on FIDIC conditions by considering actual conditions for implementing and managing the Project. This helped achieve good effect and rich experience. For instance, a Quality Supervision Group (QSG) was formed by HPCD to strengthen quality control. Much more attention was given to the following: (a) improving design of expansion joints by introducing advanced techniques; (b) increasing pavement standard; (c) increasing quality standard of subgrade; (d) introducing rational techniques for back-fill of end bridges; and (e) strengthening of planting. 1. Major Factors Affecting the Proiet 24. Based on the contract documents, construction of the Expressway was finished on schedule. However, commencement of E&M contract was in June 1997 which was late. Progress of building works were delayed due to design variations. These affected completion of the Project. J. Work by the Bank 25. Project Preparation. The Bank started its work on the Project in March 1992. Bank missions reviewed the feasibility study report prepared by I-IPCD and then mobilized missions to review and inspect the technical, organizational and economic aspects of the Project. In July 1993 project appraisal was conducted. In the appraisal report, detailed description was given to the project scale, economic benefit and organization structure to implement the Project. The Bank provided great support and help to the EA. 26. Project Implementation. During implementation of the project, the Bank mobilized missions to supervise the project. they proposed many rational recommendations concemning quality, finance management, resettlement and organizational structure which greatly helped project implementation. - 16- 27. Cooperation between EA and the Bank. Sound cooperation between the two sides has been established. Relevant Bank staff know very well about the demand for developing infrastructure facilities in China and has provided great help to Hebei Province. This is highly appreciated by Hebei Provincial Government and HPCD. They sincerely hope to have further opportunity to get more help from the Bank. 28. Experience. Main benefits from the Project include: (a) FIDIC conditions of contract have been widely applied in highway construction in Hebei Province due to their effectiveness and advancement; (b) a number of engineers and management staff widened their visions and put what they have learned into practice in the following fields through training including highway project management, finance management, highway maintenance, and traffic engineering. They have played an important role in project implementation; (c) availability of fund, inspection of Bank missions and timely settlement of issues occurred during project implementation ensured smooth work progress. K. Operation Schedule 29. Future Plan and Recommendations. (a) To reduce cost by decreasing height of subgrade filling during the design, elevation of many underpasses was constructed low and eventually resulted in collection of water during rainy seasons; (b) management entity of Shi-An Expressway will be commercialized in future to be responsible for operation, maintenance and management of the Expressway; (c) strengthening of coordination with the traffic police to form a joint management system; (d) strengthening of coordination with Henan on tolling to create a sound tolling order; and (e) monitoring indicators: indicators to be monitored in the future include internal rate of return (IRR), net economic value (NEV), repayment period, dynamic repayment period, net benefit value, traffic volume, growth rate of generated traffic, traffic accident, average annual maintenance and overhaul cost, toll rate, toll revenue, etc. Henan PCD Assessment Summary (full assessment in Project ICR Files) ANYANG-XINXIANG EXPRESSWAY PROJECT ICR (SUMMARY) ANYANG-XINXIANG EXPRESSWAY PROJECT ICR (SUMMARY) A. Anyang-Xinxiang Expressway: Civil Works Completion Report Outline I. The Anyang - Xinxiang Expressway (AXE), part of the national trunk highway between Beijing and Zhuhai, is a major highway project listed in the Ten-Year Development Plan and in the Eighth-Five Plan Program for the National Economy and the Society. AXE was designed as a dual-direction four-lane expressway with all accesses under control in flat and slightly rolling areas following the Highway Engineering Standards (JTJOl-88) issued by Ministry of Communications (MOC). It is the second highway financed by the World Bank in Henan and the works were procured following the ICB procedures. The construction of the expressway followed the international practice by adopting the FIDIC contract conditions in the administration and supervision of the works. The total cost estimate of AXE as approved by MOC in its document No. JIAOGONGFA[1993] 700, was RMBY2,030,725,985.00. 2. AXE starts from the Xilinzhi village, Anyang City, linking up with the Shijiazhuang - Anyang Expressway constructed by Hebei Province, and ends at Guanti, Xinxiang City, connecting with the Class A highway between Xinxiang and Zhengzhou at the south abutment of the Xinchang interchange. The total distance of AXE is 121.704 km and from north to south, AXE passes through seven counties and cities under the jurisdiction of Anyang, Hebei and Xinxiang cities, namely Anyang, Tangyin, Junxiang, Qixiang, Weihui, - 17 - Yanjin and Xinxiang. The civil works of AXE were packaged into five contracts as per political administration and the quantity of work. The total price of contracts of AXE was RMBY1067.80 million and the works were actually commenced from September 14, 1994 and completed by November 28, 1997. The successful bidders were, from Contract No. 1 through No. 5, No. 2 Engineering Bureau of MOC, No. 14 Engineering Bureau of MOR, No. 11 Engineering Bureau of MOR, Henan Transport and Highway Engineering Bureau, and No. 3 Engineering Bureau of MOR. 3. The Project's major technical standards are as follows: (i) Designed driving speed: 120 km/h; and (ii) Width of subgrade: 26 m, including: a median of 3 m in width, driving lanes of 2 x 2 x 3.75 m in width, left curb belt of 2 x 0.75 m in width, hardened shoulders of 2 x 2.5 m in width (plus right curb belt of 2 x 0.75m in width), earthen shoulders of 2 x 0.75 m in width. B. Buildings and facilities on the AXE 4. The building construction project is an important part, which are scattered from the north to the south in six cities/counties, namely Anyang City, Tangyin County, Xunxian County, Qixian County, Weihui City and Xinxiang City respectively under the jurisdiction of Anyang City, Hebei City and Xinxiang City of Henan Province. The express way was divided into 11 contract sections for all buildings and facilities. C. Organization of Maintenance on the AXE 5. In Henan Provincial Expressway Construction and Operation Administration, a maintenance division was set up, responsible for maintenance management of expressways in the province, including preparation of yearly maintenance programs, maintenance specifications and maintenance procedures; programming, supervision and testing and acceptance of heavy maintenance works and some special maintenance works of the expressways across the province; and inspection and evaluation on the maintenance activities performed by the branch offices. The expressway section between Anyang and Xinxiang is under the management and maintenance of Anyang, Xinxiang and Hebei Branch Offices -At each of such branch offices, there is a maintenance division and a maintenance depot, looking at expressway repairing and maintenance. Henan Expressway Maintenance Center, which is still under construction, is located at Xuedian, Zhengzhou and will be equipped with advanced machines and equipment such as MARINI100 asphalt mixing plant, ABG-422 pavers, WIRTGEN 200DC milling machines, INGERSOLAND and HAMM road rollers. The center is expected to be capable of implementing independently expressway specialized maintenance operations and providing asphalt mixed materials for repairing and asphalt for joint filling undertaken by nearby branch offices. 6. The maintenance staff is 40. On average, the staging is 3 km/person. Taking various measures actively to achieve good maintenance management: (i) Giving a full play to the maintenance equipment available; (ii) Establishment of an expressway maintenance quality control system; (iii) Establishment of the Central Lab; (iv) Implementation of the Supervision System for Special Works and Heavy maintenance; (v) Safety (vi) Emphasis on routine maintenance and strengthening inspection; (vii) Information Management for In-door Management; (viii) Staff training; (ix) Systems and Regulations; and (x) Study and Research. 7. Experience and Lessons a) It was found, in the implementation of pavement special works, that differential strength exists between the newly-laid concrete base and the base of the existing pavement and that the treatment currently made to flexible pavement leading to difficult bonding between rigid layer and flexible layer in the base of the pavement, which becomes the weak point of frequent - 18 - distresses. It is therefore necessary to apply new design, new materials, new techniques and new workmanship for pavement special works. b) It is worthy further research for solutions for treatment to pavement cracking and joints, especially the cracking in compound type pavement and joints as well as the bonding between rigid and flexible layers left after pavement special works. c) It is worthy attention to how to further give full plays to the maintenance equipment available, how to raise to the maximum degree the application rate of the machines and equipment and to open extemal market by using the heavy-duty equipment in order to create economic benefits. d) Most of the distresses occurred in the expressway pavements, subgrades, bridges and culverts in Henan have direct or indirect connection with moisture, and therefore, more attention to expressway drainage systems should be given by the research and design departments. e) In view that the Highway Maintenance Specifications were prepared for ordinary roads and are not quite suit to the maintenance of expressways, it is recommended that an expressway maintenance specifications be prepared and publicized. D. Anyang-Xinxiang Expressway Traffic Engineering Special Report 8. During the stay of the delegation in Zhengzhou from 10 October 1999 to 20 October, HPCD submitted a report to WB-Schedule for Construction and Procurement of Anyang-Xinxiang Traffic Engineering. After a second consultation between HPCD and the delegation of WB, they reached an agreement, i.e. WB will not provide loan for the project and HPCD collecting domestic fund US$13,000,000 which is equivalent to RMB107, 900,000 yuan (exchange rate: lUS$=RMB8.3 for the completion of the project. At the same time, the delegation of WB stressed in Inspecting Delegation Memorandum (from October 10 to October 20,1999) of National Trunk Highway (Henan Section) LN3748 that although WB did not offer loan to the project, yet it was still part of the whole Anyang-Xinxiang Expressway. The project must ensure a safe and efficient operation of the Expressway and satisfy the WB. 9. The project will be implemented referring to the schedule of procurement execution confirmed by BPCD and WB and using Intemational Open Competitive Bidding. We will choose eligible contractor who has good reputation, achievements, adequate experience and capacity of performance to implement the works. Henan Provincial Expressway Development Company with Limited Liability will fully undertake the responsibility to form a project management department who has the status of a legal entity to perform the managing obligation, and check the alteration works of the project and calculation and measurement payment. At the same time, through bidding on national construction procedure we choose excellent Electromechanical Supervision Company with first-class quality certificate to undertake the responsibility for investment control, quality control and progress control, to adequately ensure the execution quality and progress of the project and contract management. E. Resettlement Completion Report Summary 10. A total amount of 10876 mu (725.07 hectare) land has been acquired for the National Highway Project (Anyang-Xinxiang Section), and 8 counties/cities, 25 townships and 87 villages have been affected. It resettles 58 households (304 people) and 2 enterprises, and the total project resettlement investment amounts to 125.38 million yuan. Physical index investigation was conducted during the period from December 1992 to April 1993, and verification took place from August 1993 to March 1994. The resettlement action plan was - 19 - formulated in September 1993. Compensation started to be dispersed after physical index verification, and it had been fully dispersed by April 1995. Relocation started in May 1994, and cleanup work completed on August 30, 1995. House construction and relocation of resettlers took place during the period from May 1994 to March 1996, while production re-establishment was carried out from the end of 1994 to 1997. The administration of resettlement implementation of this Project is organized by the High-Grade Highway Construction Headquarters of Henan Provincial Bureau of Communication, whose name has been changed to Henan Provincial Expressway Development Co., Ltd., while its branch offices at Anyang, Hebei and Xinxiang take charge of implementation. F. Environmental Protection Completion Report Summary 11. The project implementation agency (Henan Provincial High-Grade Highway Construction Authority) earnestly implemented the environmental impact assessment system and substantially ensured the implementation of the relevant environmental mitigation measures according to the EIA approved by the National Environmental Protection Administration, realizing the simultaneous designing, implementation and turning to operation for the expressway and the environmental facilities as well. In April 2000, the National Environmental Protection Administration held the environmental facilities completion acceptance meeting for the project and concluded that the works basically satisfy the requirements for acceptance. It was agreed that the environmental facilities are qualified for acceptance though request for correction to some existing problems was made. G. Financial Management and Disbursements under China National Highway Project 12. Financial Management One level calculation system was applicable to financial management, financial division in the Authority was in charge of calculating cost and expenditure, the cost and expenditures by the corresponding sub-authorities were internally packed by themselves, and these financial sheets were absent from the current summaries, and also they function the additional information to the whole expenses of the project. Besides for 824.68 million RMB yuan financed by the Bank (equivalent to 99.61 million USD), 573 million RMB yuan aided by MOC and 1031.07 million RMB yuan collected within the province had been spent on AXE implementation. Up to now, 2.1 billion RMB yuan had been completed for AXE implementation, which include 166.62 million RMB yuan for house engineering, 124.08 RMB yuan for land fee, 1735.07 million RMB yuan for highway construction and 74.23 million RMB yuan for equipment and plant procurement, however, completion certificate approval is not addressed for AXE. And in addition, to comply with the requirement from the upper level, assets of AXE, appraised and confirmed by legal procedure, and valued by the date of April 30, 2000, has been incorporated into the newly reorganized fHenan Expressway Development Co., Ltd., and later, the asset management and calculation of the expressway will abide by the codes specified in Financial Management Methods for Expressway Company and Accounting Regulations for Highway Operation Enterprises released by the Ministry of Finance (hereinafter called "MOF"). 13. In the whole period of the project implementation, its financial management and accounting calculation had successfully passed the audit procedure by qualified audit department in every fiscal year, such management and calculation comply with the financial and accounting specifications from both Chinese side and the Bank. - 20 - 14. Accounting Withdrawal and its Submittal Accounting withdrawal and its submittal proceeded in a strictly manner as specified in the loan agreement for the requested items and their proportion, up to date, 99.61 million USD had been withdrawn, of this figure, 92.13 million USD flown toward civil engineering, 5.58 million USD toward commodities and the rest 1.9 million USD toward consulting service and training center. The specifically accounting number was issued in Henan Provincial Financial Department (hereinafter called "HPFD"), expenditure numbers were opened in HPCD and the Authority, respectively. In the later stage, due to the policy variation, the nurnber in the Authority could not undertake payment obligation, payment of foreign currency was directly finished by the number of HPCD. 15. Operation Income and Expenditure Balance During its construction, the Authority regarded AXE as one integrity for its financial management and calculation, after it was completed and entered a trial passing period by the end of 1997, the whole AXE stepped into its operation management phase, and its roadway asset was overall transferred to the then-incorporated Expressway Construction Management Bureau of HPCD, (hereinafter called "the Bureau"), and three sub-bureaus were established along the line in Anyang, Hebei and Xinxiang cities for their divided sections' management of the expressway, respectively, dated by August 31, 2000, 402.08 million RMB yuan had been recouped from the entire alignment, more details are like this, 119.88 million RMB yuan in 1998, 164.99 million RMB yuan in 1999 and 117.21 million RMB yuan by the end of August of the current fiscal year. The expenditures for operation management mainly consist of operation taxes and their addition, management fees (including staff wages, highway admninistration cost, levy administration fee, civilization construction expense), maintenance cost on expressway and its depreciation (calculation & withdrawal for this item exclusive before restructuring), expense for equipment purchase (specifically scheduled cost for this item prior to restructuring) and financial expenses. H. Anyang-Xinxiang Expressway Toil Management Report 16. The AADT of Anxin freeway in 1999 is 9226 Vehicles/day, the peak hourly traffic volurne V) of Anxin freeway in one direction is 672 vehicles/hour, about 874 PCU/hour. The AADT in 1999 is 9226 vehicle/day, is 42.9% more than the AADT in 1998 which is 6456 vehicle/day. It says that the Anxin Freeway has very higher attraction to the traffic volume. The toll income of Anxin Freeway in 1999 is 164,864 thousand RMBY; it is 48% more than the income in 1998 that is 114,020 thousand RMBY. I. Traffic Facilitation Study Completion Report 17. The National Eighth Five-Year Plan provided for investment in the transport sector to remove bottlenecks which constrain development. In support of this plan the World Bank provided a loan to the Government of the Peoples' Republic of China to build a new expressway between Shijiazhuang and Xinxiang. In order to make the best use of the new expressway, the Henan Provincial Communications Department and the Hebei Provincial Communications Department made an agreement with the World Bank to carry out the Henan-Hebei Traffic Facilitation Study. It was designed to identify all constraints that may impede the free flow of vehicles, freight and passengers that will use the new expressway between Shijiazhuang and Xinxiang. The study was to analyze their relative importance, assess their relative magnitudes and impact and recommend measures to remove or alleviate the most damaging constraints. - 21 - J. Staff Training Implementation Assessment Report 18. Generally the training program under Henan Highway Project (Henan section) progressed well with strong support and assistance from the World Bank and MOC. An investigation was conducted once by issuing and collecting questionnaires about the effect of the training courses and the finding show that the training courses brought in good benefits. Through training, some advanced technologies and management skills were absorbed and introduced from developed countries, substantially raising the career qualification and technical skills of our engineers and managerial staff and effectively facilitating the development of the highway sector in the province. K. Highway Capacity Study Results 19. The study was implemented in a three-year period, and the results achieved have been as follows: a) Evaluated the method of HCS in China; b) Established the data bases of road and traffic conditions of surveyed sites; c) Determined the relationships between traffic flow parameters to road and traffic conditions of Hebei and Henan Provinces; d) Determined PCE of main vehicle types in various terrain and various flow levels; e) Determined 5 and 15 minutes peak hour factor and K factor which reflect the relationship of Max. Hour flow to AADT for each road class; f) In accordance with road and traffic conditions of Hebei and Henan, developed simulation model program for Chinese two-lane rural roads base VTI model; g) Determined analysis methods for highway capacity and operation analysis in determined road and traffic conditions; h) Developed The Highway Capacity Guideline for highway plan and feasibility study for Hebei and Henan. - 22 - L. Overall Assessment 20. Through World Bank-financed highway project the FIDIC clause of the conditions of contract have been widely adopted in Henan Province for highway construction works since this system is very advantageous and effective; Through the training of personnel, a batch of professionals were trained on highway maintenance and traffic engineering. These people were well trained, and broadened and made full use of their knowledge during project implementation and they played important roles in their work. During the project preparation and implementation, the Bank staff provided a lot of assistance to the Implementation Agency. Henan Provincial Government and Henan Provincial Transport Department would like to express heartfelt thanks to the World Bank for its cooperation and support, and hope to have further opportunity to get the Bank's assistance and the chance for even better cooperation. (b) Cofinanciers: (c) Other partners (NGOs/private sector). 10. Additional Information - 23 - Annex 1. Key Performance Indicators/Log Frame Matrix Outcome Indicators: Indicator SAR (or as retroffited) Actual/Latest Estimate 1. Average daily traffic on existing (in Medium Truck Equivalent/Day) (Year 1999) Highway/new Expressway: - in Hebei 8094/12856 7886/8370 - in Henan 5384/14982 6906/9567 - in SAXE Corridor 6739/13419 7396/8968 2. Average speed on existing (in km/h) Highway/new Expressway: - inHebei 43/80 45/85 - inHenan 51/89 54/74 - in SAXE Corridor 46/83 49/79 3. Gross Output Value of Agriculture (in RMB Billion) and Industry in affected counties: - in Hebei 18.6 23.1 - in Henan 21.7 23.6 - in SAXE Corridor 40.3 46.7 Output Indicators: Indicator SAR (or as retroffited) Actual/Latest Estimate 1. Construction of Expressway: - SAE 216 km 216 km - AXE 124 km 124 km (+ 43 krn upgrading works on XZH) 2. Interconnecting Roads Improvement Program: 11 roads/I100 km 17 roads/180 km - in Hebei 3 roads/60 km 2 roads/47 krn - in Henan 3. Coordination Meetings Planned 2 tirnes/year Actually met 3.5 times/year 4. Completion of Traffic Facilitation Study/Highway Capacity Study 1996/1998 1996/1999 5. Training (person-months): - in Hebei 265.0 248.7 - in Henan 192.4 187.9 - 24 - Annex 2. Project Costs and Financing Annex 2a. Project Cost by Component (in US$ million equivalent) Hebei Portion Appraisal Estimate Actual/Latest Percentage of Estimate Appraisal Shijiazhuang-Anyang Expressway 431.7 406.5 94% E&M works on SAE 40.2 22.0 55% Interconnecting Roads Improvement 35.9 76.3 213% Program (IRIP) in Hebei Subtotal 507.8 504.8 99% Equipment 17.2 15.6 91% Institutional Strengthening and Training 14.7 14.9 102% Land Acquisition and Resettlement 31.20 46.3 148% Total 570.90 581.7 102% Henan Portion Appraisal Estimate Actual/Latest Percentage of Estimate Appraisal Anyang-Xinxiang Expressway 259.6 236.4 91% E&M works on AXE 14.4 13.0 90% Interconnecting Roads Improvement 15.1 5.9 39% Program (IRIP) in Henan Subtotal 289.1 255.3 88% Equipment 17.1 12.8 75% Institutional Strengthening and Training 8.0 3.4 43% Land Acquisition and Resettlement 9.6 20.4 213% Total 323.8 292.0 90% Consolidated Costs Appraisal Estimate Actual/Latest Percentage of Estimate Appraisal Shijiazhuang-Anyang-Xinxiang Expressway 691.3 643.0 93% E&M works on SAXE 54.6 35.0 64% IRIP 51.0 82.0 161% Subtotal 796.9 760.2 95% Equipment 34.3 28.4 83% Institutional Strengthening/Training (IST) 22.7 18.3 81% Land Acquisition and Resettlement (LAR) 40.8 66.7 164% Total 894.7 873.7 98% - 25 - Annex 2b. Project Costs by Procurement Arrangements (in US$ million equivalent) Hebei Appraisal Estimate Actual/Latest Estimate Category ICB NCB Other NBF Total ICB NCB Other NBF Total Works 448.0 56.4 3.4 507.8 422.1 76.3 6.5 504.9 Goods 9.0 5.5 2.7 17.2 10.1 5.5 15.6 Services 14.7 14.7 14.9 14.9 Misc. 31.2 31.2 46.3 46.3 Total 457.0 56.4 23.6 33.9 570.9 432.2 76.3 26.9 46.3 581.7 Henan Appraisal Estimate Actual/Latest Estimate Category ICB NCB Other NBF Total ICB NCB Other NBF Total Works 265.9 21.1 2.1 289.1 223.2 25.9 6.3 255.4 Goods 8.6 5.5 3.0 17.1 10.1 2.7 12.8 Services 8.0 8.0 3.4 3.4 Misc. 9.6 9.6 20.4 20.4 Total 274.5 21.1 15.6 12.6 323.8 233.3 25.9 12.4 20.4 292.0 Consolidated Appraisal Estimate Actual/Latest Estimate Category ICB NCB Other NBF Total ICB NCB Other NBF Total Works 713.9 77.5 5.5 | 796.9 645.3 102.2 12.8 | 760.3 Goods 17.6 _ 11.0 5.7 34.3 20.2 _ 8.2 1 _ 28.4 Services _ 22.7 _ 22.7 _ 18.3 18.3 Misc. l _ 40.8_ _ 40.8 l l 66.7 66.7 Total 731.5 77.5 39.2 46.5 894.7 665.5 102.2 39.3 66.7 - 873.7 Notes: 1. Other includes international and national shopping, and consulting services. 2. NBF includes reserved procurement and land acquisition and resettlement. - 26 - Annex 2c. Project Financing by Component (in US$ million equivalent) A raisal Estimate Actual/Latest Estimate Percentage of Appraisal Hebei Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. I ~~% % SAE 178.7 182.1 70.9 181.4 135.1 90.0 102% 74% 127% E&M works 27.5 12.7 16.8 5.2 61% 41% on SAE IRIP 11.5 24.4 25.0 51.3 217% 210% Equipment 14.5 2.7 13.1 2.5 90% 93% IST 7.8 6.9 3.7 11.2 47% 163% LAR 31.2 46.3 148% Total 240.0 260.0 70.9 240.0 251.6 90.0 100% 97% 127% Appraisal Estimate Actual/Latest Estimate Percenta e of Apraisal Henan Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. I ~~~% % AXE 108.4 109.8 41.4 104.0 67.4 65.0 96% 61% 157% E&M works 9.6 4.8 13.0 271% on AXE IRIP 4.9 10.2 2.3 3.6 47% 35% Equipment 14.1 3.0 10.0 2.8 71% 93% IST 3.0 5.0 1.9 1.5 65% 29% LAR 9.6 20.4 213% Total 140.0 142.4 41.4 118.2 108.7 65.0 84% 76% 157% Consolidated An raisal Estimate Actual[Latest Estimate Percentage of Anpraisal Financing Bank Govt. CoF. Bank Govt. CoF. Bank Govt. CoF. I ~~ ~~% % I SAXE 287.1 291.9 112.3 285.4 202.5 155.0 99% 69% 138% E&Mworks 37.1 17.5 16.8 18.2 45% 104% on SAXE IRIP 16.4 34.6 27.3 54.9 166% 159% Equipment 28.6 5.7 23.1 5.3 81% 93% IST 10.8 11.9 5.6 12.7 52% 107% | LAR 40.8 66.7 163% Total 380.0 402.4 112.3 358.2 360.3 155.0 94% 90% 138% Note: "Govt." refers to the Provincial Government while "CoF." refers to the Central Government. - 27 - Annex 3: Economic Costs and Benefits SUMMARY OF ECONOMIC RE-EVALUATION 1. The economic re-evaluation of the project covers the following two components: (a) construction of the 216.5 km Shijiazhuang- Anyang Expressway (SAE) in Hebei province and the 124.4 km Anyang - Xinxiang Expressway (AXE) in Henan province, and (b) an Interconnecting Roads Improvement Program (IRIP) for the improvement of 19 provincial highways in Hebei and Henan, and the Upgrading of the Xinxiang-Zhengzhou Highway (XZU). 2. The economic analysis is based on the re-evaluation of data on traffic, operational performance, costs and benefits of project components. The methodology used was similar to that employed by the SAR and is summarized as follows: (a) capital investment and maintenance costs were revised to reflect December 2000 prices and are included in the cost stream; (b) the benefits stream, also reflected in December 2000 prices, were included, and consist of savings in vehicle operating costs, reduced traffic congestion on existing routes, and enhanced road safety; and (c) a project life of 20 years has been assumed and the capital investment period for all components was from 1994 to 2000, depending on the construction phases. 3. During project imnplementation, some project components under IRIP have been modified. Hebei expanded its IRIP from 11 roads to 17 roads, while Henan dropped one of its three IRIP roads. In addition, Henan included the Upgrading of the Xinxiang- Zhengzhou Highway as an extension of the new expressway. These new components were included in the economic analysis conducted for the ICR. 4. The re-evaluation report is comprised of four parts. Part I is the economic evaluation of SAE and AXE; Part II is the economic evaluations of the 20 roads under the IRIP; Part III is the overall economic evaluation of the project, including probabilistic risk analysis; and Part IV is the financial evaluation of the project. This document is available in the Project ICR File (see Annex 7). 5. This annex provides summary tables on the economic re-evaluation of SAXE, the Interconnecting (IRIP) and Upgrading (XZU) Roads Programs, and the project as a whole. - 28 - A. SAE and AXE Expressways Economic Cost (Y million). EIRR (in %) and NPV (12%. Y million)- The SAR The ICR SAE AXE Total SAE AXE Total Cost 3,524/_1 1,984/_1 5,508 4,734 2,650 7,384 EIRR 22-8 23.1 22.9 13.3 15.8 14.1 NPV 3,785.2/ 1 2,272.7 / 1 6,057.9 511.6 766.0 1,277.6 /_1: Updated to 2000 prices by multiplyinz with a factor of 1. 126. SENSITIVITY ANALYSIS EIRR (in %) NPV(12%. Y million) VOC savings reduced by 15% 12.5 290.0 Passenger time savings reduced to zero 13.5 870.1 Congestion savings reduced to zero 13.8 1,083.5 Total benefits reducedby 15% 12.5 286.6 B. Interconnecting and Upgrading Roads Programs TRIP and XZU Cost Comparison (Yuan Million) Estimate (Yuan million) Actual (Yuan million) December 1994 prices Dec. 2000 Financial Dec. 2000 (B)/(A) Economic Economic (A) (Current) Economic (B) (in %) Total 373.5 420.4 / a 964.1 1.019.4 +142.5 /_a: Updated to 2000 constant prices by multiplying with a factor of 1.126 EIRR AND NPV OF THE IRIP and XZU EIRR (in %) NPV (12%, Yuan million) The SAR The ICR The SAR / a The ICR Hebei 40.2 14.7 987.6 159.9 Henan 36.3 45.6 394.7 660.1 Total 39.9 22.3 1.382.3 820.1 /_a: UDdated to 2000 prices by multiplying with a factor of 1.126. C. THE OVERALL ECONOMIC EVALUATION OF THE PROJECT EIRR (in %) and NPV (12%. Y million) Surnmary The SAR The ICR EIRR NPV EIRR NPV The expressway 22.9 6,057.9 14.1 1,277.6 IRIP and XZU 39.2 1,382.3 22.3 820.1 Total oroiect 24.0 7.440.2 15.1 2.097.6 - 29 - Annex 4. Bank Inputs (a) Missions: Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2 Economists, I FMS, etc.) Implementation Development Month/Year Count Specialty Progress Objective Identification/Preparation March 1992 3 EC/ES, HE November 1992 3 2 HE, EC Appraisal/Negotiation April 1993 3 EC,HE,ES (Pre-appraisal) July 1993 6 EC, 2 HE, TS, ES, RS November 1993 5 3 HE, ES, RS Post-appraisal Supervision April 1994 6 2 HE, 2 RS, 2 FMS HS HS October 1994 2 2 HE HS HS November 1995 4 2HE,ES, RS S HS June 1996 3 3HE S S November 1996 2 2 HE S S April 1996 2 2HE S S August 1997 5 2 HE, OA, RS, ES S S July 1998 6 3 HE, OA, RS, ES S S March 1999 2 HE,RS S S October 1999 5 HE, 2 FMS, ES, RS S S January 2000 3 HE, RS, FMS S S ICR June 2000 3 HE, RS, ES S S EC=Economist; TS=Transport Specialist; HE=Highway Engineer; ES=Environmental Specialist; OA=Operational Analyst; RS=Resettlement Specialist; TE/P-Transport Engineer/Procurement; T/IS=Training/Institutional Strengthening; D/FS=DisbursementlFinancial Specialist; FMS=Financial Management Specialist (b) Staff: Stage of Project Cycle Actual/Latest Estimate No. Staff weeks US$ (,000) Identification/Preparation 70.6 204.9 Appraisal/Negotiation 67.1 220.7 Supervision 100.3 280.4 ICR 10.0 35.0 Total 248.0 741.0 - 30 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components (H=High, SU=Substantial, M=Modest, N=Negligible, NA=Not Applicable) Rating Z Macro policies O H OSU*M O N O NA Z Sector Policies O H *SUOM O N O NA M Physical OH OSUOM O N O NA Z Financial O H *SUOM O N O NA Z Institutional Development O H 0 SU O M O N 0 NA M Environmental O H *SUOM O N O NA Social 3 Poverty Reduction O H OSU*M O N O NA DGender O H OSUOM O N * NA II Other (Please specify) OH OSUOM ON O NA J Private sector development 0 H O SU *M 0 N 0 NA z Public sector management 0 H 0 SU O M 0 N 0 NA D Other (Please specify) OH OSUOM O N O NA -31 - Annex 6. Ratings of Bank and Borrower Performance (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HU=Highly Unsatisfactory) 6.1 Bank performance Rating f Lending OHS*S OU OHU
Группа Всемирного банка · Implementation Completion and Results Report
China - National Highway Project
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Implementation Completion and Results Report
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