Page 1 PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB2046 Project Name Third Jiangxi Highway Project Region EAST ASIA AND PACIFIC Sector Roads and highways (100%) Project ID P093906 Borrower(s) PEOPLES REPUBLIC OF CHINA Implementing Agency PEOPLE'S REPUBLIC OF CHINA Jiangxi Provincial Communications Department Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared December 12, 2005 Date of Appraisal Authorization January 3, 2006 Date of Board Approval June 22, 2006 1. Country and Sector Background The Government of China is committed to developing an efficient multi-modal transport system to enhance competitiveness and promote development. At the core of their program is the National Trunk Highway System (NTHS), comprised of 12 major expressway corridors (five vertical and seven horizontal) connecting all provincial capitals and main cities. The initial NTHS backbone has made great progress towards providing the core network connectivity. The development is now shifting towards linking poorer western regions with eastern China, the engine of China’s economic growth. Jiangxi is a land locked province in south central China with a population of over 40 million. It is one of the lagging regions in China by every standard: (i) 32 counties out of total 99 counties and cities in Jiangxi province are identified as poor; and, (ii) among which 21 are classified as national level poverty counties. Ganzhou City Prefecture is the largest prefecture and accounts for 24% (39,600 km 2 ) of Jiangxi province. Located in the south of Jiangxi, it is a highly mountainous area. Most poor counties of the province are located in Ganzhou City Prefecture. With a population of 8.3 million, the prefecture has agricultural, mineral and manufacturing industries. The citrus industry, already annually exporting over 350,000 tons, is undergoing rapid expansion. There is significant potential for growth in the mining industries due to the high levels of non-ferrous and rare earth metals in the area. The need for improved high grade access to key facilities. Lack of transport accessibility is one of the constraints to the social and economic development of these southern landlocked mountainous areas. The Ruijin-Ganzhou Expressway (RGE) is planned to link Ganzhou and the area east to an expressway currently under construction in Fujian province. This will provide a high quality transport link to the coastal port and international airport at Xiamen (Fujian Page 2 province). In the future, the expressway network will continue to develop westwards, eventually connecting with Chengdu (Sichuan province) and Kunming (Yunnan province). The need for improved local road access to markets and services. Local roads, Class IV, and unclassified roads, account for about 75% of the total mileage (61,860 km) of the road network in the province; and more than half of these roads are unpaved. Ganzhou City Prefecture is poorly served by local roads. Out of the total mileage of 11,544 km, over 77% of roads are Class IV or unclassified, some 2% lower than the average technical standard in the province. The need for improved sector management. The previous two Bank highway projects have helped the Jiangxi Provincial Communications Department (JPCD) improve their operations in a number of key areas, such as safety and road maintenance, however, more needs to be done. There is a need to further improve planning and safety processes at JPCD as well as to assist them implementing better quality assurance. There is also a need to start the delivery of anti- HIV/AIDS education in the sector. 2. Objectives The project development objective is to improve the exchange of goods and services between Jiangxi Province and the more developed provinces to the east (including exchanges with world markets through the air and sea gateways of neighboring Fujian province) by investing in the priority road system, improving local roads, and strengthening highway management. The objectives will be measured using the following outcome indicators: · Increased average daily traffic, reduced accidents and reduced travel time in the Ganzhou- Ruijin corridor; · Increased average daily traffic and reduced number of days closed on the road sections of the Local Roads Improvement Program; and · Implementation of key recommendations from the institutional strengthening components. The project contributes to the sector related CAS objectives of facilitating trade, improving regional and market integration, and fostering the development of lagging Western Regions. This will be achieved by enhancing highway sector management and lowering transportation costs. 3. Rationale for Bank Involvement The east- west linkages of the NTHS are critical for the development of China’s lagging regions and to attain the full benefit of the NTHS network connectivity. The RGE will be a key contributor to the development of NTHS and will stimulate trade led growth in a landlocked poor province of China. It will further strengthen regional integration and the competitiveness of Jiangxi province and its neighbors. The local roads improvement program will address the needs of the poor and disadvantaged people within Ganzhou City Prefecture. Page 3 The project will build on the institutional strengthening activities from the Bank’s previous two projects to assist the JPCD to manage the road network effectively. The project will address key areas, including safety, maintenance, operations, and HIV/AIDS education. 4. Description Expressway Component: Ruijin – Ganzhou Expressway (RGE) The RGE will be a 117 km long section (about US$657 million, or 89% of the project cost) of the Xiamen – Chengdu expressway, which belongs to one of the east-west corridors of the NTHS. It will connect Ganzhou City in the west with the Guangdong – Beijing expressway. In the east it will terminate just west of Ruijin city. A 31 km expressway section between the RGE and the Fujian provincial border will be built using a BOT scheme with a concession contract signed for a 22 year period. With the completion of the expressway, and the link between the Fujian border and Xiamen (under construction), Ganzhou City will have direct high quality access to the port of Xiamen. The area crossed by the RGE is a succession of three basins separated by mountains: the Ganzhou basin, the Yudu basin and the Ruijin basin. Between these basins the mountains are high, some exceeding 1,000 m of altitude. The main river between Huichang and Ganzhou is the Gong. In Ganzhou City, the Gong River becomes the Gan River. The Gong River links the Ganzhou basin with the Yudu basin via a narrow valley. The terrain is very challenging and required careful route selection and designs so as to minimize the environmental and social impacts while providing adequate access to local communities. Local Roads Improvement Program Component The Local Roads Improvement Program (LRIP) of approximately US$74 million aims to improve access in poor areas of the province. The amount of the Bank financing shall be US$10 million. Ganzhou, the largest prefecture in the province, is the priority area for the LRIP, and is where the expressway component will be built. Currently its road network density is about 23 km/100 km 2 , about 38% lower than the average road density (37 km/per 100 km 2 ) in the province. Among the total mileage of 11,544 km in Ganzhou City Prefecture, 8,901 km of roads are Class IV or unclassified, some 2% lower than the average technical standard in the province. As one of the poorest prefectures with lowest densities of road network in the province, the LRIP component will support high priority needs of local access. The LRIP will be implemented in two phases. Phase I of the program includes two roads: Chongyi – Fengzhou road (48.5 km) and Meicun – Longbu road (34.8 km). The additional road sections for Phase II will be identified using the same selection criteria as in Phase I. Institutional Strengthening Component The institutional strengthening component of about US$9 million includes: Page 4 · Traffic safety operations for tunnels . A provincial tunnel safety management plan will be established to ensure that there are adequate resources and procedures to handle tunnel emergencies. · Traffic safety improvement for expressways. This activity will improve traffic safety conditions on expressways. · HIV/AIDS. The JPCD will develop the ability to execute effective anti-HIV/AIDS activities for its staff, as well as those of contractors and other workers. An anti-HIV/AIDS program will be conducted for JPCD staff, workers on the JHP3 construction sites, and local residents. · Implementation of Electronic Toll Collection (ETC) . An ETC implementation strategy for Jiangxi province will be established based on the national ETC plan. · Micro-enterprises for Road Maintenance. In conjunction with Fujian province, a study will be done to investigate the viability of using micro-enterprises to maintain local roads applying techniques used in Latin America and elsewhere. · Training. Domestic and foreign training activities will cover a range of topics including design, safety, maintenance, management, finance, and the environment. · Equipment. Equipment will be procured for expressway management and maintenance, and environmental monitoring. These will include weighing stations, quality control sets, and road condition monitoring equipment. 5. Financing Source: ($m.) BORROWER 542 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 200 Total 742 6. Implementation It is proposed that the Bank finances the project without any additional funding from other bilateral or multilateral lending agencies. Trust funds will be sought to provide additional funding to carry out some initiatives under the institutional strengthening component. The Borrower is the People’s Republic of China (PRC) which will on lend the loan proceeds through the Ministry of Finance (MOF) to Jiangxi Province on the same conditions as the Bank will lend to the PRC. The overall direction of the project at the central level will rest with the Ministry of Communications (MOC) located in Beijing. At the provincial level the Jiangxi Provincial Communications Department (JPCD) will be responsible for the overall project implementation in close coordination with Jiangxi Provincial Finance Bureau (JPFB) and support from the State Development and Reform Commission (NDRC), MOF, MOC, and Jiangxi Provincial Planning Commission (JPPC). The World Bank Loan Project Management Office (PMO) established under the JPCD will act as the executing agency. It will carry out the procurement and financial oversight for the project, and will provide support to other project implementation units—such as the sub-PMO to be established in Ganzhou City Prefecture for the LRIP component—to fulfill their obligations. Page 5 After the RGE construction is completed, it will be operated and maintained by a division under the Jiangxi Provincial Expressway Management Bureau (JPEMB), which is a specialized agency under the JPCD. The JPEMB has limited administrative, management, and legislative authority, and is strictly controlled by JPCD. Under the JPEMB, there are four expressway management divisions, each in charge of one expressway. The RGE is one of these four divisions. The JPEMB and its divisions are responsible for expressway management, maintenance, and toll collection. In addition, the JPEMB is also responsible for the administration of all expressways in Jiangxi except for three expressways managed by the Jiangxi Highway Bureau and Ganzhou City. Particular duties of expressway administration include: maintenance planning, road condition inspection, disputes management and compensation. The supervision of construction of the RGE will be carried out by a domestic supervision team, assisted by foreign specialists on an as-needed basis. 7. Sustainability The sustainability of the project is defined by: (i ) the current central government’s policy to improve accessibility to the western and central provinces; (ii) the provincial government’s commitment to establish a transport corridor with access to an international seaport; and (iii) the constantly growing traffic in the corridor, sustained economic growth of the province, and rapid development of the cities of Ganzhou and Ruijin. All of the above are enhanced by the matured and well established relationship between the Bank and Jiangxi province through two successful lending operations. 8. Lessons Learned from Past Operations in the Country/Sector The extensive experience that the Bank has developed based on the numerous highway projects in China and the corresponding lessons learned were incorporated in the project design. Among them: · The development plans of large urban centers should be incorporated early in the project design of national and provincial transportation links. The development plans of Ganzhou and Ruijin cities were incorporated early in the project design to ensure good linkages to the expressway. The project is consistent with the provincial and national transportation plans. · The preparatory activities greatly contribute to the project’s success. Substantial preparatory work, including land acquisition, resettlement, environmental impact and design studies performed during project preparation have contributed to the readiness of the project. · Ensure client ownership of institutional components. The proposed institutional strengthening component builds on the achievements from the previous two Bank-financed highway projects in Jiangxi Province and the lessons learned on the implementation of institutional components of other highway projects in China. Page 6 9. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment ( OP / BP / GP 4.01) [X] [ ] Natural Habitats ( OP / BP 4.04) [ ] [X] Pest Management ( OP 4.09 ) [ ] [X] Cultural Property ( OPN 11.03 , being revised as OP 4.11) [ ] [X] Involuntary Resettlement ( OP / BP 4.12) [X] [ ] Indigenous Peoples ( OD 4.20 , being revised as OP 4.10) [ ] [X] Forests ( OP / BP 4.36) [ ] [X] Safety of Dams ( OP / BP 4.37) [ ] [X] Projects in Disputed Areas ( OP / BP / GP 7.60) * [ ] [X] Projects on International Waterways ( OP / BP / GP 7.50) [ ] [X] 10. List of Factual Technical Documents 11. Contact point Contact: Christopher R. Bennett Title: Sr. Transport Specialist Tel: (202) 473-0057 Fax: (202) 522-3573 Email: cbennett2@worldbank.org 12. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-5454 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas Page 7