Page  1
Document 
of 
The 
World 
Bank 
Report 
No: 
25 
184 
PROJECT 
APPRAISAL 
DOCUMENT 
ON 
A 
PROPOSED 
LOAN 
IN 
THE 
AMOUNT 
OF 
US$150 
MILLION 
TO 
THE 
PEOPLE'S 
REPUBLIC 
OF 
CHINA 
FOR 
SECOND 
TIANJIN 
URBAN 
DEVELOPMENT 
AND 
ENVIRONMENT 
PROJECT 
April 
2 
1,2003 
Urban 
Development 
Sector 
Unit 
East 
Asia 
and 
Pacific Region 
Page  2
CURRENCY EQUIVALENTS 
(Exchange 
Rate 
Effective 
October 
3 
1,2002) 
Currency 
Unit 
= 
Renminbi 
Yuan 
(RMB 
Y) 
Y 
1 
= 
US$0.12 
US$1 
= 
Y8.28 
FISCAL 
YEAR 
January 
1 
- 
December 
31 
ADB 
ATC 
BOD 
COD 
CYE 
EA 
EMP 
EPB 
GEF 
GOC 
ICB 
IRR 
JBIC 
MEB 
MEC 
MFB 
MOF 
MRR 
Mv 
NCB 
NFA 
NMV 
PIP 
PTD 
PTD 
QCBS 
RAP 
RFP 
SCATES 
SPO 
TA 
TCMC 
TDC 
TEDA 
TJPMO 
TMD 
TMEDI 
TMEIC 
TMG 
TUDEPl 
TWRC 
UPB 
voc 
WRB 
WWTP 
ABBREVIATIONS 
AND 
ACRONYMS 
Asia 
Development 
Bank 
Area 
Traffic 
Control 
Biological 
Oxygen 
Demand 
Chemical 
Oxygen 
Demand 
ChuangYe 
Environmental Protection 
Company 
Environmental 
Assessment 
Environmental 
Management 
Plan 
Environmental Protection Bureau 
Global 
Environment 
Facility 
Government 
of 
People’s 
Republic 
of 
China 
International Competitive 
Bidding 
Inner 
Ring 
Road 
Japan 
Bank 
for 
International 
Cooperation 
Municipal 
Engineering 
Bureau 
Municipal 
Engineering Corporation 
Tianjin Municipal 
Finance 
Bureau 
Ministry 
of 
Finance, 
China 
Middle 
Ring 
Road 
Motor 
vehicle 
National 
Competitive 
Bidding 
Net Fixed 
Assets 
Non-Motor 
Vehicle 
Project 
Implementation Plan 
Public Transportation 
Department, 
TCMC 
Public Transportation Corporation 
Quality 
and 
Cost Based Selection 
Resettlement 
Action 
Plan 
Resettlement 
Policy 
Framework 
Sydney 
Coordinated 
Adjustable 
Traffic 
Evaluation 
System 
Subproject 
Office 
Technical 
Assistance 
and 
Training 
Tianjin 
Construction and 
Management 
Commission 
Tianjin 
Drainage Company 
Tianjin 
Economic 
Development 
Area, near 
the 
Tanggu 
port 
Tianjin 
Project 
Management 
Office, 
TCMC 
Traffic 
Management 
Department, 
Public 
Security 
Bureau 
Tianjin 
Municipal 
Engineering 
Design 
Institute 
Tianjin Municipal 
Engineering Investment Company 
Tianjin 
Municipal 
Government 
Tianjin 
Urban 
Development 
and 
Environment 
Project 
Tianjin 
Water 
Reuse 
Company 
Urban 
Planning 
Bureau 
Vehicle 
operating 
cost 
Tianjin 
Water 
Resource 
Bureau 
Wastewater 
Treatment 
Plant 
I 
Vice 
President: 
Jemal-ud-din 
Kassum 
Country 
ManagerDirector: 
Yukon 
Huang 
Sector 
ManagerDirector: 
Keshav Varma 
Task Team Leadernask 
Manager: 
Songsu 
Choi 
Page  3
CHINA 
SECOND 
TIANJIN 
URBAN DEVELOPMENT 
AND 
ENVIRONMENT 
PROJECT 
CONTENTS 
A. 
Project 
Development 
Objective 
1. 
Project 
development 
objective 
2. 
Key 
performance 
indicators 
B. 
Strategic 
Context 
1. 
Sector-related 
Country 
Assistance Strategy (CAS) 
goal 
supported 
by 
the 
project 
2. 
Main 
sector 
issues 
and 
Government 
strategy 
3. 
Sector 
issues 
to 
be 
addressed 
by 
the 
project 
and 
strategic choices 
C, 
Project 
Description 
Summary 
1. 
Project 
components 
2. 
Key 
policy 
and 
institutional 
reforms 
supported 
by 
the 
project 
3. 
Benefits 
and target 
population 
4. 
Institutional 
and implementation 
arrangements 
D. 
Project 
Rationale 
1. 
Project 
alternatives considered 
and 
reasons 
for 
rejection 
2. 
Major 
related projects financed 
by 
the 
Bank 
and/or other 
development 
agencies 
3. 
Lessons 
leamed and reflected 
in 
the 
project 
design 
4. 
Indications 
of 
borrower 
commitment 
and ownership 
5. 
Value 
added 
of 
Bank 
support 
in 
this 
project 
E. 
Summary 
Project Analysis 
1. 
Economic 
2. 
Financial 
3. 
Technical 
4. 
Institutional 
5. 
Environmental 
6. 
Social 
7.  Safeguard 
Policies 
Page 
2 
2 
2 
2 
4 
6 
8 
9 
10 
11 
12 
13 
14 
14 
14 
15 
17 
17 
18 
20 
21 
F. 
Sustainability and 
Risks 
1, 
Sustainability 
2. 
Critical 
risks 
21 
22 
Page  4
3. 
Possible 
controversial 
aspects 
23 
G. 
Main 
Loan 
Conditions 
1. 
Effectiveness 
Condition 
2. 
Other 
H. 
Readiness 
for 
Implementation 
I. 
Compliance 
with 
Bank 
Policies 
Annexes 
Annex 
1: 
Project 
Design 
Summary 
Annex 
2: 
Detailed Project Description 
Annex 
3: 
Estimated 
Project 
Costs 
Annex 
4: 
Environmental, 
Social, 
and Economic 
Impacts 
Annex 
5: 
Financial 
Analysis 
of 
the 
Tianjin 
Sewerage 
Sector 
Annex 
6: 
(A) 
Procurement Arrangements 
(B) 
Financial 
Management 
and 
Disbursement Arrangements 
Annex 
7: 
Project 
Processing 
Schedule 
Annex 
8: 
Documents 
in 
the 
Project 
File 
Annex 
9: 
Statement 
of 
Loans and Credits 
Annex 
10: 
Country at 
a Glance 
23 
23 
25 
26 
27 
30 
37 
38 
51 
59 
65 
70 
71 
72 
76 
MAP(S) 
IBRD 
3 
1859 
IBRD 
32321 
Page  5
CHINA 
Second 
Tianjin 
Urban 
Development and 
Environment Project 
Project 
Appraisal 
Document 
East 
Asia 
and 
Pacific Region 
EASUR 
Date: 
April 
18,2003 
Sector 
ManagerlDirector: 
Keshav Varma 
Country 
ManagerlDirector: 
Yukon 
Huang 
Project 
ID: 
PO40599 
Lending 
Instrument: 
Specific 
Investment 
Loan 
(SIL) 
Team 
Leader: 
Songsu 
Choi 
Sector(s): 
Sewerage 
(45%), 
Sub-national government 
administration 
(25%), 
General transportation 
sector 
(20%), 
Flood 
protection 
(10%) 
Theme(s): 
Access 
to 
urban 
services for 
the 
Poor 
(PI, 
Pollution 
management 
and 
environmental health 
(P), 
Water 
resource management 
(S), 
Municipal 
governance 
and 
institution 
building 
(S), 
Infrastructure 
services 
for 
private 
sector development 
(S) 
P 
[XI 
Loan 
[ 
]Credit 
[ 
]Grant 
[ 
]Guarantee 
[ 
]Other: 
For LoanslCreditslOthers: 
Amount 
(US$m): 
150 
Borrower 
Rationale for Choice of 
Loan 
Terms 
Available 
on 
File: 
1 
Yes 
Proposed 
Terms 
(IBRD): 
Variable-Spread Loan (VSL) 
Grace 
period 
(years): 
5 
Commitment fee: 
.75% 
Years 
to maturity: 
20 
Front 
end fee 
(FEF) on Bank loan: 
1.00% 
Payment 
for 
FEF: 
Capitalize 
from 
Loan 
Proceeds 
Borrower: 
PEOPLE'S 
REPUBLIC 
OF 
CHINA 
Responsible agency: 
TIANJIN MUNICIPAL 
GOVERNMENT 
Project 
Management 
Office, 
Construction Commission 
Address: 
56 
Changsha 
Rd., 
Heping 
District, 
Tianjin 
30005 
1, 
China 
Contact 
Person: 
Mr. 
Qi 
Wenjie or 
Mr. 
Wang 
Yifang 
Tel: 
86-22-2330-3630 
Fax: 
86-22-2330-6419 
Email: 
tjpmo@public.tpt.tj 
.cn 
Project implementation 
period: 
CY 
2003-2009 
Expected effectiveness 
date: 
08/15/2003 
Expected 
closing 
date: 
06/30/2010 
Page  6
A. 
Project 
Development Objective 
1. 
Project 
development 
objective: 
(see 
hex 
1) 
1. 
The 
project 
will 
help 
develop 
and 
carry 
out physical 
and 
institutional 
measures 
that 
would 
enhance 
the 
efficiency 
and 
equity 
of 
urban 
wastewater management 
and 
transportation 
systems, 
and 
thus 
facilitate 
the 
sustainable 
development 
of 
Tianjin 
and 
serve 
as 
models 
for 
other 
cities 
in 
China. 
2. 
well 
as 
improved equity 
in 
the 
future. 
Thanks 
to 
large 
investments 
in 
the 
past 
two 
decades, 
the 
availability 
of 
basic 
infrastructure 
and 
resources 
has 
become 
less 
of 
a concern at 
least 
in 
large cities 
of 
China. 
More 
important, at 
present 
and 
for 
the future, 
are 
their 
efficiency 
and 
sustainability, and 
their 
distribution 
among 
different 
income 
groups 
and 
different 
areas. 
Examples 
illustrating 
these 
issues 
include: the 
pollution 
of 
waterways 
that 
not 
only 
damages 
the 
ecology 
but 
also deprives 
cities and 
farms 
of 
the 
necessary 
water 
resources; 
growing 
deficits 
in 
infrastructure 
and 
environmental 
protection 
in 
fast 
developing 
new 
urban 
areas 
compared 
with 
great 
improvement 
in 
mature 
cities; 
institutional 
and 
financial 
frameworks 
for 
infrastructure lagging 
behind 
the 
growth 
of 
the 
assets 
and expenditures; 
and 
the 
low 
utilization 
of 
the 
limited 
urban 
road 
capacity 
due 
to 
low 
levels 
of 
bus 
services 
and 
traffic 
management. 
The 
proposed 
project 
will 
support 
measures 
to 
address 
these 
issues 
for 
wastewater 
management 
and 
transportation, 
for which 
largest 
shares 
public 
investment 
are 
planned 
for 
the 
next 
decade 
in 
Tianjin, 
typical 
of 
most 
cities 
of 
China. 
Growth 
of 
cities and 
towns 
is 
key to 
China’s 
continued 
economic 
growth 
and 
restructuring 
as 
3. 
Many 
of 
these 
programs 
- 
wastewater 
utility 
commercialization, 
suburban wastewater 
management, 
sewage 
canal 
rehabilitation, 
water 
reuse, 
and 
bus 
priority 
measures 
- 
represent 
significant 
innovations 
that 
are 
financed 
for 
the 
first 
time 
in 
China 
by 
the 
Bank 
and 
will 
serve 
as 
important 
experiments 
and demonstration 
for 
advances 
in 
urban 
management 
in 
China. 
2. 
Key 
performance 
indicators: 
(see 
Annex 
1) 
0 
Urban 
wastewater management 
coverage: 
Collection 
and 
treatment 
of 
wastewater 
from 
80% 
of 
the 
central 
city 
and 
first 
150,000 
m3iday 
of 
wastewater 
in 
suburban towns; 
average 
income 
in 
districts 
served 
15% 
lower 
than 
areas 
already 
served 
at 
the 
project 
start; 
Water 
Reuse: 
Use 
of 
about 
20,000 
m3lday 
of 
reclaimed 
wastewater 
for 
urban 
uses, 
and 
600,000 
m3iday 
for 
agricultural 
purposes 
Road 
Transportation: 
Travel time 
to 
cross selected 
points; 
Public 
Transportation: 
Increase 
in 
the 
modal 
share 
of 
buses. 
e 
0 
0 
6. 
Strategic Context 
1. 
Sector-related 
Country 
Assistance 
Strategy 
(CAS) goal 
supported 
by 
the 
project: 
(see 
Annex 
1) 
Document 
number: 
25141 
The project 
addresses 
the 
overarching 
CAS 
theme 
of 
“Facilitating 
rural-urban transition and 
sustainable 
development” 
by 
aiming 
at 
four 
specific 
goals 
under 
it: 
Improving public 
sector management 
and 
public 
service 
provision, 
Assisting 
the 
less 
advantaged 
population 
and 
areas, 
Strengthening environmental 
protection, 
and 
Improving 
natural 
resource management. 
Date 
of 
latest 
CAS 
discussion: 
December 
19, 
2002 
2. 
Main 
sector issues 
and 
Government 
strategy: 
1. 
Cities 
of 
China 
have undergone 
breathtaking 
growth 
and transformation 
over 
the 
last 
two 
decades, 
economically 
and physically.  Radical 
decentralization 
of 
fiscal 
and 
administrative 
authority 
in 
the 
early 
1980s 
unleashed sustained 
heavy 
investments 
in 
infrastructure and 
housing, 
which 
had 
-2- 
Page  7
deteriorated 
badly 
during 
the 
preceding 
two 
decades 
but 
now 
can 
be 
considered 
at 
least 
adequate 
for 
most 
cities 
of 
China. 
As 
rapid 
urban 
economic 
growth 
is 
expected 
to 
continue 
well 
into 
the 
future, 
the 
pressure 
for 
further 
expansion 
of 
infrastructure 
would 
continue. 
On 
the 
other 
hand, 
the 
singular focus 
on 
expansion 
is 
yielding 
to 
broader 
and 
more 
qualitative 
issues 
of 
sustainabil~ty, 
eflciency,  and equity. 
2. 
sustainabili~. 
The 
government 
has 
pursued 
an 
active 
policy 
for 
environmental 
protection 
since 
the 
late 
1980s, 
more forceful than 
most 
other matters 
largely 
delegated 
to 
local 
governments. 
The 
policy 
attention 
and 
industrial 
renovation 
have 
slowed 
the environmental deterioration 
and, 
in 
many 
large 
cities, 
reversed 
it. 
Nevertheless, 
water 
pollution 
remains 
serious 
and 
growing, 
due 
mainly 
to 
increasing 
wastewater 
from 
domestic 
and 
semi-urban 
sources. 
The 
pollution 
is 
especially 
grave 
in 
three 
river 
(Huai, 
Hai, 
and 
Huang) 
basins 
and 
the 
Bohai 
Bay 
in 
Northern 
China, 
where water 
scarcity constrains 
economic 
growth 
yet 
water 
quality 
in 
most 
water 
courses 
is 
rated 
unfit 
for 
any 
productive 
use. 
The 
government 
has 
made 
the 
clean-up 
of 
the 
Three 
Rivers, 
Three Lakes 
(Tai, 
Dianchi, 
and 
Chao), 
and 
Bohai 
Bay 
as 
a 
high 
priority 
national 
program; 
embarked 
on 
a 
program 
to 
increase 
water conservation 
and 
reuse 
in 
Northern 
China; 
and 
mandated 
all 
municipalities 
in 
the 
country 
to 
treat 
50% 
of 
wastewater, 
and 
the larger 
ones 
to 
treat 
70%, 
by 
20 
10. 
The 
rapid 
industrial 
and 
urban 
growths 
have also increased 
the 
concem 
for 
environmental 
3. 
While much 
remains 
to 
be 
done, 
especially 
for 
environmental protection, the extensive 
urban 
reconstruction 
over the 
last 
two 
decades 
has 
alleviated most 
glaring 
infrastructure 
deficiencies 
while 
increasing 
the resource 
requirements 
to 
operate 
and 
maintain 
the enlarged stock 
of 
infrastructure. 
At 
the 
same 
time, 
the 
on-going 
downsizing 
of 
the 
government 
and 
the 
state-owned enterprise sectors 
is 
constraining 
the 
fiscal 
and 
quasi-fiscal 
resources. 
These 
increase 
the importance 
of 
eflciency  and 
sustainabili~ 
in 
infrastructure 
investment 
and 
utilization. 
Examples 
of 
common inefficiencies 
found 
in 
China include 
idling 
of 
wastewater treatment 
plants 
due 
to 
overdesign 
or 
lack 
of 
operating 
hds, 
and 
low 
utilization 
of 
road 
capacity 
due 
to 
weak 
traffic 
management 
and 
public 
transportation. 
To 
increase the 
efficiency 
and 
sustainability 
of 
infrastructure, 
the government 
has 
been 
promoting 
full-cost recovery 
and 
commercialization 
of 
infrastructure 
services. 
For 
healthy 
development and operation 
of 
market-based 
provision 
of 
infrastructure, 
it 
would 
be 
essential 
to 
develop 
adequate 
regulatory 
andplanning 
capacities 
which 
do 
not 
exist 
or 
are 
being 
weakened 
in 
the 
midst 
of 
the 
transition 
to 
market and the 
government 
streamlining. 
4. 
remains a 
dominant issue. 
As 
a 
group, 
smaller 
cities, towns, 
and 
semi-urban 
areas 
have been 
experiencing 
much 
faster 
economic 
and 
demographic 
growth 
than 
larger cities 
but 
their 
infrastructure 
and 
services have 
not kept 
pace, 
partly 
as 
the 
current 
fiscal 
system 
of 
China allows 
little 
borrowing or 
redistribution 
of 
fiscal 
and 
technical 
resources. 
As 
a result, 
small 
urban 
areas 
face 
a 
serious 
and 
growing 
deficit 
in 
infrastructure,  services, 
and 
the 
environment. 
This 
imbalance between 
growth 
needs 
and 
supporting 
services 
and 
between 
small and 
large 
urban 
areas 
represents 
an 
inefficient 
allocation 
of 
resources 
and a 
growing 
threat 
to 
the 
environment. 
It 
also presents 
a 
major 
equity 
issue 
as 
most 
of 
the 
jobs 
to 
absorb 
rural 
surplus 
labor 
have 
been 
created 
in 
the 
small 
urban 
areas. 
For 
new 
or 
small urban areas 
of 
China, however, 
expansion 
of 
infrastructure and 
services 
Urban 
Development 
and Environment 
in 
Tianiin 
5. 
Tianjin Municipality 
is 
a 
provincial-level 
jurisdiction 
located 
between 
Beijing 
to 
the 
west 
and 
Bohai 
Bay 
to 
the 
east. 
It 
consists 
of 
six 
urban districts 
that make 
up 
the 
Tianjin 
"city 
proper" 
as 
well 
as 
nine 
suburban 
districts 
and 
counties, 
with 
a 
total 
population 
of 
about 
10 
million. 
First 
developed 
as 
a 
gateway 
to 
Beijing, 
the 
city 
has 
grown 
into 
a 
premier 
industrial 
and 
transportation 
center 
of 
North 
China. 
It 
now 
anchors 
a 
diversified 
metropolitan 
area, 
with 
fast 
industrial 
developments 
in 
suburban 
Districts. 
-3- 
Page  8
The 
city 
itself 
remains 
compact, 
and 
most 
of 
its 
5.5 
million 
residents 
live 
within 
about 
200 
km2 
6. 
issues 
facing cities 
of 
China 
today. 
Traversed 
by 
the 
Hai 
River, bounded 
by 
the 
Bohai 
Bay, 
and 
heavily 
industrial, 
it 
is 
a 
focal 
point 
of 
the 
national 
campaign 
to 
improve 
water 
quality 
and 
maximize 
the 
use 
of 
water 
resources. 
Physical 
compactness 
of 
the 
central 
city 
and 
its 
limited 
fiscal 
resources, 
still 
largely 
based 
on 
struggling 
old 
industries, 
heighten 
the 
need 
for 
efficiency 
in 
infrastructure 
investments and 
utilization. 
Continued 
rapid 
development 
of 
suburban 
areas 
holds 
the 
key to 
the 
Municipality's 
economic 
fiture 
as 
well 
as 
equity 
and environment. 
The 
Municipality 
provides 
vivid 
exhibits 
of 
many 
key 
urban 
development 
and 
environmental 
7. 
and 
environmental protection. 
Following 
its 
impressive recovery 
from 
the devastating 1976 
earthquake, 
in 
the 
1980s 
it 
became 
the 
first 
city 
in 
the 
nation 
to 
successfully 
build 
and 
operate a 
large 
scale 
(200,000 
m3lday) 
wastewater treatment 
plant, intercept most 
of 
the 
industrial 
wastewater 
from 
the 
natural 
river, 
develop low-cost 
housing 
and 
housing 
exchanges, 
and complete 
a 
three-ring 
road 
system. 
It 
was also one 
of 
the 
first 
to 
develop 
competitive construction 
and 
development industries, 
and experiment 
with 
automated 
area 
traffic control 
systems 
and 
subways. 
The 
Bank 
assisted 
Tianjin's 
continuing 
innovations 
through 
the 
Tianjin Urban 
Development 
and 
Environment Project 
(TUDEP1, 
1993-2000), 
which 
helped 
introduce 
a market-based resettlement 
system, 
high 
(at 
the time) 
sewerage 
tariffs, 
competitive 
public 
bus 
services, 
an industrial 
pollution 
control 
find, 
a large-scale sanitary 
landfill, 
all 
of 
which 
became 
national 
models. 
More 
recently, 
Tianjin 
became 
the 
first 
among large 
Chinese 
cities 
to 
raise water 
tariff 
to 
over 
Y 
31m3, 
to 
commercialize 
wastewater treatment plants, 
to 
commercialize 
heating 
services 
and 
tariffs, 
and 
to 
pilot 
a large-scale 
urban 
use 
of 
reclaimed 
water. 
Tianjin 
has 
been 
a 
prominent national 
model 
of 
quality 
and 
innovations 
in 
urban 
development 
3. 
Sector 
issues 
to 
be 
addressed 
by 
the 
project 
and 
strategic 
choices: 
Wastewater Management 
1. 
A 
major 
current 
undertaking 
of 
Tianjin 
is 
the 
program 
to 
meet the 
national 
mandate 
for 
wastewater treatment. 
The 
program, 
not 
including 
the 
works 
proposed 
for 
the 
Bank 
financing, 
would 
collect 
and 
treat about 70% 
of 
the 
city's 
wastewater 
by 
2005, 
well 
ahead 
of 
the 
target date 
for 
large 
cities 
of 
China. 
The 
program calls 
for 
adding 
three 
WWTPs 
with 
about 
1.2 
million 
m3lday 
capacity 
and 
associated 
sewer 
networks 
at 
a 
total 
estimated 
cost 
of 
about 
Y 
3.5 
billion.  About 
half 
of 
the 
required 
financing 
will 
be 
from 
the 
China Development 
Bank, Japan 
Bank 
for 
International Cooperation 
(JBIC), 
and 
Asia 
Development 
Bank 
(ADB). 
2. 
weaknesses. 
The 
first 
issue 
is 
the 
high 
risk 
of 
underutilization 
of 
the 
new 
capacity 
due 
to 
the 
insufficient 
collection 
network, 
which 
the 
proposed 
project 
would 
augment. 
The 
second issue 
is 
the 
financing and 
institutional 
challenges 
for 
construction 
and 
operation 
of 
the 
facilities. 
The 
Tianjin Municipal 
Government 
(TMG) 
has established a 
commercial 
company 
for 
wastewater treatment, 
but 
its 
contractual 
terms, 
set 
with 
an excessive focus 
on 
investment 
financing 
in 
the 
absence 
of 
proper regulatory 
framework, 
appear 
to 
risk 
the 
long-term financial 
sustainability. 
The 
project 
will 
support 
an 
Action 
Plan 
to 
establish 
sound 
regulatory 
and contractual frameworks. 
The 
third 
issue 
is 
the 
omission 
of 
the 
poorest 
of 
the 
six 
drainage 
districts (Nanjiaowai 
or 
South 
suburb) 
due 
to financial 
constraints. 
The 
proposed 
project 
will 
finance the 
construction 
of 
the 
wastewater 
collection 
and 
treatment 
systems 
of 
the 
district, 
completing 
the 
full 
coverage 
of 
the 
city's 
wastewater. 
The 
proposed 
project 
will 
supplement 
and 
extend 
this 
program 
by 
addressing 
its 
three 
critical 
3. 
Most 
of 
the 
population 
and 
industrial 
growths 
of 
Tianjin Municipality 
over 
the last 
decade 
have 
occurred 
in 
areas 
outside 
the 
central 
city. 
As 
a 
result 
about 60% 
of 
total 
wastewater 
of 
the 
municipality 
-4- 
Page  9
is 
now 
generated 
from 
the 
new 
urban 
areas, 
consisting 
of 
over 20 
towns and 
industrial 
districts. 
Yet 
there 
is 
no WWTP 
outside 
the 
city 
except one 
in 
the 
Tianjin 
Economic Development 
Area 
(TEDA). 
The 
increasing 
pollution 
threatens the 
sustainability 
of 
the 
key 
growth 
areas. 
The municipal 
master 
plan 
recognizes 
the 
problem 
and calls 
for 
full 
treatment 
of 
suburban wastewater, 
and 
the proposed 
project 
will 
help 
establish 
a 
model 
of 
wastewater management 
systems 
in 
these 
areas. 
4. 
its 
water scarcity. 
It 
is 
now 
building 
the 
national 
pilot 
system 
for 
reclamation 
and 
reuse 
of 
wastewater 
for 
a 
full 
range 
of 
urban 
purposes. 
The 
proposed 
project 
will 
support 
the 
construction 
of 
two 
wastewater 
reclamation 
and 
reuse 
systems, 
designed 
mainly 
with 
reference 
to 
environmental, 
economic and 
financial 
viability 
of 
water 
reuse, 
in 
contrast 
to 
the 
main 
focus 
of 
the 
national 
pilot 
on 
technical feasibility. 
Tianjin's traditional 
strong 
environmental 
agenda 
and 
programs 
have 
been 
mainly 
motivated 
by 
5. 
currently 
untreated 
sewage 
is 
often 
used 
for 
irrigation 
of 
downstream farms 
to 
the 
detriment 
of 
farmers 
and 
foodstuff 
consumers. 
Nearly 
2 
million 
&/day 
of 
treated 
wastewater, expected 
after 
the 
completion 
of 
the city's 
WWTPs, 
will 
provide 
a 
much 
improved 
water 
source. 
Nevertheless, 
this 
as 
well 
as 
the 
environmental 
benefit 
of 
the 
WWTP 
investments 
would 
be 
limited 
as 
most 
of 
the 
effluent 
would 
be 
conveyed 
through 
a canal 
heavily 
contaminated 
by 
untreated 
sewage 
in 
the 
past. 
The 
sediment also 
limits 
the stormwater 
drainage 
capacity 
of 
the 
canals 
during 
the 
rainy 
season. 
The 
proposed 
project 
will 
support 
dredging 
and 
safe 
treatment 
of 
the 
sediment 
of 
the 
Dagu 
canal 
system, 
which 
is 
the larger 
of 
two 
sewage 
canals 
of 
Tianjin 
and 
consists 
of 
Dagu, Xianfeng, 
and 
Jizhuang 
canals. 
A 
much 
larger 
and 
cheaper 
potential 
use 
of 
treated 
wastewater 
is 
for 
agriculture. 
Even 
the 
Transportation 
6. 
last 
ten 
years, 
with 
the 
small 
passenger 
cars 
increasing the most 
rapidly, 
from 
about 
22,000 
in 
1990 
to 
250,000 
in 
2000. 
Yet 
the 
city 
remains 
very 
compact, 
with 
its 
five 
million 
residents 
living 
and 
working 
within 
about 
200 
km*, 
and 
the 
land 
area 
developed 
for 
urban 
uses 
increasing 
by 
less 
than 
30% 
over 
the 
decade. 
As 
a result, 
traffic 
congestion 
is 
very 
serious 
and 
increasing, 
but 
expansion 
of 
roads 
within 
the 
city 
is 
difficult 
due 
to 
the 
space 
limitations 
and 
costs. 
While 
the spatial expansion 
of 
the 
city 
itself 
would 
help 
reduce 
the 
congestion, 
it 
would 
take 
a 
long 
time. 
TMG 
is 
taking 
various 
measures 
to 
increase 
the 
use 
of 
the 
road 
capacity 
by 
reorganization 
and 
better 
management 
of 
roads 
and 
especially the junctions. 
These 
include 
traffic 
interchanges, 
inexpensive 
modifications 
of 
lane 
structures, 
junction 
channelization, 
and 
area 
traffic 
control. 
TUDEPl 
supported 
such 
measures 
with 
the 
construction 
of 
two 
interchanges 
and 
ATC 
at 
some 
80 
junctions 
in 
the 
city 
core 
(on 
and 
within 
the 
Inner 
Ring 
Road 
- 
IRR), 
accident 
management 
systems, 
and 
traffic police 
training. 
The 
proposed 
project 
will 
extend 
this 
support 
focusing 
on 
the 
Middle 
Ring 
Road 
(MRR) 
which 
is 
the city's 
main 
artery, 
with 
the 
construction 
of 
interchanges 
in 
two 
most 
heavily 
congested intersections, 
a 
series 
of 
small works 
to 
modify 
selected sections 
of 
the 
MRR 
and 
IRR, 
and 
the 
addition 
of 
ATC 
on 
the 
MRR 
and 
areas 
inside 
it. 
The 
number 
of 
motor 
vehicles 
(MV) 
in 
Tianjin 
has 
more 
than 
tripled 
to nearly 
a 
million 
over 
the 
7. 
To 
contain the 
volume 
of 
road 
traffic 
itself, 
it 
is 
critical 
to 
increase the use 
of 
public 
transportation. 
TUDEPl 
supported the development 
of 
the 
public 
bus 
system 
with 
financing 
of 
a 
bus 
depot 
but 
mainly 
with 
assistance 
to 
break 
up 
the 
bus 
monopoly 
in 
favor 
of 
an 
improved 
and 
competitive 
bus 
industry, 
which 
now 
consists 
of 
several 
competing 
bus 
companies, 
some 
with 
private 
partners. 
As 
a 
result, 
the 
modal 
share 
of 
the 
bus 
which 
had 
been 
decreasing 
to 
about 
5% 
of 
the 
passenger 
traffic 
until 
1995 
has 
increased 
rapidly 
to 
8.4% 
in 
2000. 
TMGs 
goal 
is 
to 
increase the 
modal 
share 
of 
public 
transportation 
to 
24% 
by 
2010. 
This 
will 
require 
a 
full 
range 
of 
subway 
system, 
which 
now 
consists 
of 
one 
line 
of 
8 
km 
and 
is 
being 
expanded 
slowly. 
What 
is 
more immediately 
feasible and cost-effective 
would 
be 
the 
promotion 
of 
the 
bus 
services. 
The 
proposed 
project 
will 
support 
a 
few 
pilot 
bus 
corridors 
-5- 
Page  10
in 
selected roads, 
as 
well 
as 
various 
measures 
to 
support 
bus 
services such 
as 
bus 
priority 
lanes 
and 
bus 
stops 
incorporated 
in 
road 
modification 
works. 
It 
will 
also support studies 
to 
design 
various 
bus 
priority 
measures 
and 
improve 
the 
bus 
route 
network 
structure. 
8. 
road 
design 
and 
maintenance, 
public 
transportation 
management, 
and 
traffic 
management. 
As 
in 
most 
cities 
in 
the 
world, 
these 
functions 
are 
fragmented 
in 
several 
different 
agencies, 
making 
it 
difficult to 
optimize 
the 
transportation 
system. 
TMG 
had 
a successful experience 
of 
bringing 
together 
transportation 
expertise 
in 
various 
agencies 
for 
coordinated 
planning 
of 
the 
urban 
transportation 
in 
the 
late 
1980s 
and 
early 
1990s, 
but 
found 
the coordination 
difficult 
to 
sustain due 
to 
the 
lack 
of 
a 
fonnal 
structure. 
It 
has 
therefore decided 
to 
establish 
a 
formal 
coordinating 
mechanism 
or 
institution 
and 
asked 
the 
Bank's 
support 
to 
examine the 
options 
and 
develop such 
institutional 
measures. 
Management 
of 
urban 
transportation 
involves 
diverse functions 
and 
expertise 
- 
urban 
planning, 
C. 
Project Description 
Summary 
1. 
Project 
components 
(see 
Annex 
2 
for 
a 
detailed 
description 
and 
Annex 
3 
for 
a 
detailed 
cost 
breakdown): 
The 
project 
consists 
of 
the 
following 
environmental,  transportation,  and 
institutional 
development 
components. 
Environmental 
Components: 
(a) 
City 
Drainage 
and 
Sewerage: 
Construction 
of 
storm 
water 
drains, sanitary 
sewers, 
and 
pumping 
stations 
in 
Nanbeicang 
and 
Fukangnanlu 
areas, 
complementing 
the wastewater treatment 
plant (WWTP) 
being 
financed 
by 
JBIC 
and 
ADB; 
drains 
and 
sewers 
in 
the South 
Suburb 
(Nanjiaowai) 
district 
of 
Tianjin. 
These 
facilities 
will 
complete 
the 
drainage 
system 
envisioned 
in 
the 
Tianjin 
drainage master 
plan. 
The 
Nanbeicang 
and 
Nanjiaowai 
districts 
are 
recently 
annexed 
areas 
with 
many 
small 
industries 
and lower-income 
residents. 
(b) 
Shuanglin 
Wastewater 
Treatment 
Plant. 
Construction 
of 
a 
WWTP 
of 
a 
200,000 
m3lday 
capacity, 
in 
Shuanglin, 
serving the 
Nanjiaowai 
area. 
(e) 
Urban 
Wastewater 
Reuse: 
Construction 
of 
water 
reclamation (tertiary 
treatment) 
plants 
of 
12,500 
- 
15,000 
m3lday 
capacity 
each, 
attached 
to 
the 
Dongjiao 
and 
Shuanglin WWTPs; and 
reclaimed 
water 
distribution 
systems 
mainly for 
industrial 
and landscape 
uses. 
(d) 
Dagu 
Canal 
~ehabilitation: 
Dredging 
of 
sediment 
and 
rehabilitation 
of 
cross-sections, 
bridges and 
culverts, 
and 
three 
pump 
stations 
of 
Dagu 
Canal 
(68 
km) 
and 
its 
associated 
tributaries 
of 
Xianfeng 
(12 
km) 
and 
Jizhuangzi 
canals 
(4 
km). 
These are 
main 
wastewater canals 
for 
the southern 
part 
of 
Tianjin 
City, 
draining directly 
into 
the 
Bohai 
Sea 
since 
1960. 
The project 
will 
remove, 
treat, 
and 
dispose 
of 
about 2 
million 
cubic 
meters 
of 
sediment, 
up 
to 
half 
of 
which 
is 
estimated 
to 
be contaminated 
with 
heavy 
metals, 
in 
an 
environmentally 
sound manner 
with 
dedicated 
landfills. 
This 
will 
prevent recontamination 
of 
treated wastewater (three wastewater treatment 
plants 
will 
discharge 
into 
the 
Dagu 
canal), 
and 
also 
restore 
its 
storm 
water 
conveyance capacity. 
(e) 
Suburban 
Sewerage: 
Creation 
of 
municipal 
wastewater 
collection 
and 
treatment 
systems 
in 
about 
two 
suburban 
towns 
of 
Tianjin 
municipality 
on 
a 
programmatic 
basis, 
to initiate 
and 
set 
models 
for 
the 
wastewater management 
in 
the 
suburban 
areas, 
which 
are 
growing 
rapidly 
but 
without 
proper urban 
environmental 
management 
systems. 
-6- 
Page  11
Transportation 
Components: 
(f) 
Urban 
Roads: 
Construction 
of 
interchanges 
at 
two 
major 
intersections 
of 
the 
Middle 
Ring 
Road 
(MRR), 
and 
low 
cost 
traffic  engineering improvements 
on 
selected 
locations along 
the 
Inner 
Ring 
Road 
(IRR) 
and 
the 
Eastern 
and 
Southwestern 
parts 
of 
the 
MRR. 
(g) 
Trafic 
Management: 
Extension 
of 
the 
existing Area 
Traffic Control 
System 
to 
300 
new 
intersections 
- 
89 
on 
or 
within 
IRR 
and 
the rest 
within 
the 
MRR, 
with 
channelization and 
often 
in 
connection 
with 
bus 
priority 
measures. 
(h) 
Public 
Transportation: 
Preparation 
and 
implementation 
of 
bus 
priority 
measures 
on 
selected 
corridors, 
including 
bus 
ways 
and 
traffic 
engineering 
measures, 
to 
increase 
the 
efficiency 
of 
bus 
operations and 
to 
contribute 
to 
increasing 
the 
modal 
share 
of 
the 
bus 
system. 
Technical 
Assistance: 
(2,) 
Technical 
Assistance 
and 
Training 
for: 
(1) 
Development 
of 
infrastructure 
information 
systems; 
(2) 
Reform 
and 
development 
of 
sewerage 
institutions and 
finance; 
(3) 
Establishment 
of 
a mechanism 
or 
organization 
to 
coordinate 
urban 
transportation 
planning 
and 
management; 
(4) 
Improvement 
in 
the 
traffic 
forecast model; 
and 
(5) 
Bus 
routes 
restructuring 
and 
design 
of 
bus 
priority 
measures. 
(a) 
City 
Drainage 
and 
Sewerage 
(b) 
Shuanglin 
Wastewater 
Treatment 
Plan 
(c) 
Water 
Reuse 
(d) 
Dagu 
Canal 
Rehabilitation 
(e) 
Suburban 
Sewerage 
(f) 
Urban 
Roads 
(g) 
Bus 
Priority 
Measures 
(h) 
Traffic 
Management 
(i) 
Institutional Development 
Total Project 
Costs 
Front-end 
fee 
Total 
Financing 
Rewired 
77.60 
55.36 
16.65 
55.15 
43.10 
62.26 
15.16 
4.09 
4.63 
334.00 
1 
SO 
335.50 
23.1 
16.5 
5.0 
16.4 
12.8 
18.6 
4.5 
1.2 
100.0 
I 
150.00 
I 
100.0 
-7- 
Page  12
2. 
Key 
policy 
and 
institutional 
reforms 
supported 
by 
the 
project: 
1. 
services 
in 
China, 
with 
the 
divestiture 
of 
WWTPs 
to 
a 
Chuang 
Ye 
Environmental Protection 
company 
(CYE) 
listed 
in 
Hong 
Kong 
and 
Shanghai 
stock 
exchanges. 
It 
also 
plans 
to 
make 
the 
Tianjin 
Drainage 
Company 
(TDC),  responsible 
for 
stormwater and 
wastewater 
collection, 
a 
fully 
autonomous company. 
These 
steps 
can 
enhance 
the 
efficiency 
and 
sustainability 
of 
the 
sewerage services, 
as 
the 
government 
role 
in 
service 
provision 
is 
being 
reduced.  Such benefits, however, 
would 
not be 
possible 
without 
proper 
policy 
and 
regulatory 
frameworks 
to 
ensure 
accountability 
and 
encourage 
efficiency 
through proper 
pricing, monitoring, 
and 
contract 
management. 
In 
fact, 
the 
CYE 
arrangements, 
established 
in 
the 
absence 
regulatory framework 
with 
a 
main 
focus 
on 
market 
capital mobilization, 
appear 
to 
have generated 
considerable 
issues 
of 
sustainability and 
efficiency 
(see 
Section 
E.2 
and 
Annex 
5). 
TMG 
recently 
initiated 
one 
of 
the most 
far-reaching 
steps 
toward 
market-based 
sewerage 
2. 
and 
the 
need 
for 
hrther 
development, 
TMG 
wishes 
to 
review 
various 
options 
to 
improve 
the 
arrangements 
and move 
further 
toward well-functioning 
market-based sector operations. 
In 
order 
to 
do 
so, 
it 
agreed to: 
Recognizing 
deficiencies 
of 
the current 
institutional 
and 
financial 
arrangements 
for 
the 
sector 
Carry out 
a 
Sewerage 
Sector 
Study 
by 
June 
30,2004 
to 
review 
and 
recommend options 
for 
organization, 
financing, 
and regulation 
of 
sewerage 
services 
and 
their 
commercialization, 
and 
their 
linkages 
with 
urban 
water 
supply 
and 
water 
reuse. 
In 
order 
to 
do 
so, 
it 
will 
establish 
a task 
force and 
finalize 
the 
terms 
of 
reference 
by 
negotiations, 
and 
engage 
consultants 
by 
effectiveness. 
Based 
on 
the 
findings 
and 
recommendations 
of 
the 
Sewerage 
Sector Study, 
establish 
an 
Action 
Plan 
for 
Sewerage 
Sector 
Reform 
by 
December 
3 
1,2004 
in 
consultation 
with 
relevant parties 
including 
the 
World 
Bank. 
Key 
considerations 
will 
be 
the 
regulatory 
structure 
and 
the 
wastewater 
pricing 
regime 
to 
ensure 
fair 
and 
equitable 
prices, sustainable operations, 
and 
achievement 
of 
environmental 
objectives. 
Carry out 
the 
Action 
Plan 
thereafter. 
Unless recommended otherwise 
by 
the 
Study and 
agreed 
with 
the 
Bank, 
the 
Actions 
would 
include the 
following: 
(a) 
consultant 
assistance 
to cany 
out regulation 
and other 
necessary 
functions 
to 
manage 
the 
sector. 
(b) 
responsibility,  authority, 
and 
payment 
to 
cover operating 
and capital renewal 
expenses 
for 
autonomous operation. 
(c) 
ensure 
the 
efficiency 
and 
sustainability 
of 
such 
services; 
(d) 
treatment 
plants 
owned 
by 
TMG 
to 
entities 
selected 
through 
a 
competitive 
process. 
(e) 
their 
managerial, 
planning, 
and 
technical capabilities. 
Establish 
by 
June 
30,2005 
an 
office 
with 
sufficient authority, 
staffing, 
budget, 
and 
By 
June 
30,2006 
enter 
into 
a 
revised 
contract 
with 
TDC, 
clearly 
defining 
its 
Review 
and 
revise 
the 
service contract 
with 
wastewater treatment 
plant 
operators 
so 
as 
to 
By 
December 
3 
1,2006, 
transfer 
the 
management 
responsibility 
or 
assets 
of 
wastewater 
Have 
the 
Office 
and 
the operating entities 
to 
carry 
out 
studies 
and 
training to 
strengthen 
3. 
China, 
consisting 
of 
a 
Public 
Utilities 
Office 
and 
a 
Drainage Department, 
or 
a 
new 
Drainage 
Management 
Office, 
with 
the 
policy 
setting, 
regulation, and contract 
management 
functions. 
Some 
of 
the 
analytical, 
planning, 
and 
monitoring 
functions 
may 
be 
contracted 
out 
to 
nongovernmental 
entities. 
It 
is 
also expected that 
the 
contractual 
arrangements 
with 
CYE 
will 
be 
modified 
to 
comply 
with 
the 
new 
regulatory 
framework. 
The 
Action 
Plan 
is 
expected 
to 
result 
in 
the 
first 
formal 
regulatory 
institution 
for 
sewerage 
in 
-8- 
Page  13
4. 
Another 
important innovation 
to 
be 
supported under 
the 
project 
is 
a 
regional 
sewerage 
service 
entity 
for 
small jurisdictions 
in 
the suburban 
areas. 
While 
the suburban 
towns 
are 
growing 
fast and 
require 
adequate 
infrastructure 
and environmental 
protection 
to 
sustain 
their 
growth, the 
efficiency 
of 
utility 
operations 
in 
small towns 
could 
be 
limited 
by 
the 
scarce 
technical and 
institutional 
resources 
outside 
large 
cities. 
In 
view 
of 
this, 
the 
Coastal 
Commission, a 
regional 
entity 
under 
TMG 
overseeing 
three fast 
developing Districts, 
and the 
Tianjin 
Economic 
Development 
Area 
Authority 
(TEDA) 
has 
nominated 
a 
new 
TEDA 
Water 
Company 
to 
plan 
and 
provide 
water 
supply 
and 
sewerage 
services 
to 
these 
jurisdictions. 
The 
project 
will 
support the 
development 
of 
the 
regional 
service 
provision 
by 
supplementing 
financial 
and 
managerial 
resources whose 
lack 
is 
impeding 
the progress. 
5. 
planning, 
road 
design 
and 
construction, 
traffic 
management, 
and 
public 
transportation. 
Institutional 
fragmentation 
is 
a serious 
inefficiency 
factor. 
In 
view 
of 
this, 
TMG 
wishes 
to 
establish 
an effective 
coordination 
mechanism 
or 
authority. 
Under 
the 
project, 
TMG 
will 
conduct 
a 
study, 
training, 
and 
consultations 
to 
review 
options 
for 
such a 
mechanism 
(by 
June 30,2005) 
and 
put 
in 
effect 
formal 
procedures 
and 
organizational 
arrangements 
from 
2006. 
Urban 
transportation 
involves 
diverse authorities 
and 
expertise, 
for 
the transportation 
network 
6. 
critical 
redirection 
of 
infrastructure 
planning 
and 
management 
toward 
a 
focus 
on 
better 
utilization 
and 
complementarity 
of 
assets. 
A 
key 
to improved efficiency 
is 
creating 
and 
using 
facilities 
in 
conjunction 
with 
other 
assets, 
rather 
than 
in 
isolation. 
Urban 
sewers 
and 
drains 
to 
be 
built 
under the project, 
for 
example, 
will 
increase 
the 
utilization 
of 
the 
existing 
and 
planned 
WWTP 
capacities, 
and 
the 
Dagu 
rehabilitation 
and 
wastewater reuse components 
will 
put 
their 
effluents 
to 
productive 
uses. 
The 
series 
of 
urban 
road 
works 
under the 
project 
combine 
the 
road 
works 
with 
traffic 
management 
and 
bus 
priority 
measures 
to 
increase 
the 
traffic 
flow on 
the 
existing 
roads. 
Technical 
assistance 
for 
infrastructure 
information 
systems, 
traffic 
modeling, 
and 
bus 
route restructuring 
will 
further 
help 
increase 
efficiency. 
The 
project’s 
physical 
components support 
the 
above 
institutional 
development, 
but 
also 
foster 
a 
7. 
infrastructure 
services. 
These 
are 
discussed 
in 
the Section 
3 
below. 
The 
project 
also 
aims 
to 
increase 
policy 
attention 
and 
public 
resources 
to 
improved equity 
of 
the 
3. 
Benefits 
and 
target population: 
1. 
countryside 
and 
discharges 
into 
the 
Bohai 
Bay. 
During 
part 
of 
the 
growing 
season 
it 
is 
used 
for 
irrigation 
of 
grain 
and 
vegetable farms, 
contaminating 
the 
soil 
and 
crops 
with 
pathogens 
and 
heavy 
metals, 
and 
posing 
public 
health 
hazards 
from 
consumption 
of 
crops 
as 
well 
as 
human 
contact 
in 
the fields. 
Pollution 
of 
the 
Bohai 
Sea 
contributes 
to 
“red algae blooms”,  contaminates 
mariculture 
farms 
and 
open water 
fisheries 
resulting 
in 
public 
health 
concerns, 
and 
upsets the general 
ecological 
balance. 
Wastewater 
treatment 
in 
the 
city 
and 
suburbs 
and the 
removal 
of 
contaminated 
sediment 
from 
Dagu 
Canal 
will 
improve soil fertility, 
reduce 
public 
health 
threats 
from 
contaminated 
agricultural 
and 
fishery 
products, 
directly 
benefitting 
suburban 
town 
residents, farmers, 
and mariculturists 
as 
well 
as 
consumers 
of 
food. 
They 
will 
also 
help 
restore 
the 
ecological 
balance 
in 
the 
Bohai 
Sea. 
At 
present 
most untreated 
wastewater 
in 
Tianjin 
city 
and the surrounding 
areas 
flow 
through 
the 
2. 
Tianjin 
municipality 
is 
extremely 
short 
of 
surface 
water 
resources 
and 
is 
already 
over-exploiting 
its 
groundwater. 
Reclaiming 
wastewater 
for 
agricultural, 
municipal, 
and 
industrial 
use 
is 
nearly 
equivalent 
to 
developing 
new 
sources 
of 
water, 
and 
is 
generally 
less expensive 
than 
importing 
expensive 
water 
from 
long 
distances such 
as 
the 
proposed South-North 
water 
transfer 
from 
the Yangtze 
River. 
This 
will 
benefit 
the 
public 
at 
large, 
but 
especially 
the 
poorer 
households 
for whom 
the cost 
of 
water 
represents a 
significant 
financial 
burden. 
-9- 
Page  14
3. 
The 
project 
will 
finance 
separated 
storm 
water 
and 
sewage 
collection 
systems 
in 
accordance 
with 
the 
Tianjin 
Drainage Master 
Plan.  Investments 
in 
storm 
water 
drains 
will 
reduce 
flood 
damages 
in 
urban 
areas, 
especially 
the 
most 
flood-prone Fukangnanlu 
area. 
The 
separate 
sanitary 
sewers 
will 
help 
ensure 
proper 
wastewater 
treatment 
even 
during 
storm 
events 
because 
combined 
storm 
overflows 
will 
be 
minimized. 
While 
these 
improvements 
will 
benefit 
the 
overall 
city, the 
directly 
affected districts of 
Beicang 
and 
South 
Suburb 
have a 
higher 
proportion 
of 
lower 
income 
residents. 
Rehabilitation 
of 
Dagu 
Canal 
will 
also reduce 
flooding 
along 
the canal 
in 
rural 
areas. 
4. 
The 
project's transportation 
components 
will 
increase 
mobility 
and 
reduce 
travel 
time, especially 
for 
bus 
passengers. 
A 
large 
proportion 
of 
the 
current 
bicyclists 
are 
projected 
to 
shift 
to 
bus 
or 
subway 
as 
the 
city 
expands 
and 
road 
congestion 
increases. 
Improved 
bus 
operations 
are 
expected 
to 
increase 
the 
modal 
share 
of 
buses 
and 
moderate the 
growth 
in 
motor 
vehicle 
usage 
and 
the consequent 
traffic 
congestion and 
emissions, for the 
city's 
overall 
economic 
efficiency 
and 
for 
the 
benefit to 
the 
public 
at 
large. 
5. 
benefits 
of 
the 
project 
investments 
as 
well 
as 
other 
assets 
and 
investments.  Further, 
by 
supporting 
innovations 
to 
address 
main 
current 
issues 
facing 
most 
cities 
of 
China, 
the 
project 
will 
help 
establish 
significant 
models 
for 
urban 
development 
and 
environmental 
management 
in 
China. 
The 
policy 
and 
institutional 
reforms supported 
under 
the 
project 
will 
help to 
sustain 
the 
above 
4. 
Institutional 
and 
implementation 
arrangements: 
1. 
Commission (TCMC), 
supported 
by 
its 
Project 
Management 
Office 
(PMO). 
They 
will 
report 
to 
and 
be 
guided 
by 
the 
Project 
Leading 
Group consisting 
of 
a 
TMG 
vice 
mayor, 
vice 
Secretary General, 
and 
directors 
or 
deputy directors 
of 
related 
commissions 
and 
bureaus: 
TCMC, 
Development and 
Reform 
Commission, Finance, 
Water 
Resources, 
Traffic 
Management, 
Municipal 
Engineering, 
Urban 
Planning, 
Housing, 
Environmental Protection 
Bureaus. 
TCMC 
will 
also manage 
technical 
assistance components 
in 
cooperation 
with 
line 
agencies 
directly 
in 
charge, 
such 
as 
MEB, 
Urban 
Planning and 
Real 
Estate 
Bureau, 
and 
Traffic 
Management 
Department. 
The 
overall project 
will 
be 
coordinated 
by 
the 
Tianjin 
Construction 
and Management 
2. 
agencies 
traditionally 
in 
charge 
of 
the 
respective 
subsectors: 
Preparation 
and implementation of 
other components 
are 
the 
responsibility 
of 
the 
following 
line 
0 
0 
0 
Municipal 
Engineering Bureau 
(MEB): 
urban 
sewerage 
and 
drainage, wastewater 
reuse, 
Dagu 
canal 
rehabilitation, 
urban 
roads, 
bus 
priority 
measures; 
Traffic 
Management 
Department 
(TMD) 
of 
the 
Public 
Security 
Bureau: 
traffic 
signal 
control 
system; 
Suburban 
Districts 
and 
the 
TEDA 
Water: 
suburban 
sewerage. 
3. 
under 
the 
project.  However, 
it 
will 
work 
with 
other 
agencies 
in 
construction 
and 
management 
of 
the 
assets, 
as 
follows: 
MEB 
is 
responsible 
for 
preparation 
and 
implementation 
of 
the 
major 
part 
of 
physical 
investments 
0 
0 
The 
Tianjin 
Drainage 
Company 
will 
manage the 
stormwater and 
sewage 
collection 
systems 
on 
completion. 
Various 
options 
are 
being 
considered 
for 
the 
Shuanglin 
wastewater treatment 
plant, 
including 
TDC 
management, 
management contract, 
and 
privatization. 
An 
institutional 
analysis 
will 
be undertaken 
under 
the 
Sewerage 
Sector 
Study 
to 
help 
the 
TMG 
decide 
on 
the most appropriate 
arrangements 
(refer to 
the 
preceding 
Section.) 
- 
10- 
Page  15
0 
For 
Dagu 
Canal rehabilitation, 
MEB 
will 
work 
under 
the 
direction 
of 
a 
Steering 
Committee 
consisting 
of 
representatives 
from 
TCMC, 
the 
municipal 
environmental protection 
bureau 
(EPB), 
the 
municipal 
water 
resources 
bureau 
m), 
and 
the three suburban 
districts 
which 
the 
Dagu 
Canal 
runs 
through. 
WRB 
will 
be closely 
involved 
in 
the 
rehabilitation 
of 
the three 
Dagu 
pump 
stations 
and 
dredging 
works, 
and 
in 
the operations 
including 
the 
distribution 
of 
reclaimed 
wastewater. 
EPB 
will 
play 
a 
key 
role 
in 
the 
monitoring, 
treatment 
and 
disposal 
of 
contaminated 
sediment. 
The 
two 
wastewater reuse 
facilities 
will 
be 
managed 
by 
a subsidiary 
of 
CYE, 
or 
another 
institutional 
alternative 
to 
be 
considered 
during 
the project. 
For 
bus 
priority 
measures, 
MEB 
will 
work 
under the 
technical 
guidance 
of 
the 
Public 
Transportation 
Management Department 
of 
TCMC 
and 
the 
TMD. 
e 
e 
D. 
Project 
Rationale 
1. 
Project 
alternatives 
considered 
and 
reasons 
for 
rejection: 
1. 
innovations. 
The 
scope 
was 
determined 
after 
extensive discussions, 
on 
the 
basis 
of 
the 
project 
objectives, 
Tianjin's track 
record, 
and 
resource constraints. 
The 
Bank's 
main 
potential contribution to 
China 
now 
lies 
more 
in 
institutional 
and 
technical improvements 
than 
in 
the financing, 
as 
emphasized 
by 
a 
recent 
explicit 
policy 
statement 
of 
GOC. 
Innovations 
are 
therefore 
an 
essential 
part 
of 
the 
project 
objectives, 
with 
a 
focus 
on 
those 
that 
will 
increase 
the 
efficiency, 
equity 
and 
sustainability 
of 
infrastructure 
and 
environment. 
These 
are 
objectives 
not 
specific 
to 
particular 
sectors, 
but 
overall urban 
management. 
The 
focus 
on 
the 
sewerage 
and 
transportation 
sectors 
reflects 
that 
of 
TMG's 
project 
proposal 
which 
was based 
on 
its 
much 
larger medium-term 
program 
and 
focused 
on 
the 
two 
sectors 
that 
represent 
the 
largest 
current investment 
programs. 
The proposal 
also 
included 
others such 
as 
heating, 
gas, 
and 
solid 
waste management investments. 
These 
were dropped 
in 
view 
of 
little 
potential 
for 
technical 
or 
institutional 
contributions 
as 
well 
as 
limitation 
of 
management 
and 
technical 
resources 
that 
can 
be 
devoted 
to 
a 
project. 
Instead, components have 
been 
added 
within 
the 
two 
main 
sectors 
that 
would 
introduce important innovations 
such 
as 
the 
suburban 
sewerage 
and 
bus 
priority 
corridors, 
which 
TMG 
was 
initially 
reluctant 
to 
undertake 
but 
agreed 
to 
experiment 
with. 
A 
key 
strategic 
choice 
for 
the 
project 
was 
its 
scope, 
in 
terms 
of 
sectors, 
geographical 
area, 
and 
2. 
The 
Tianjin 
Construction 
and 
Management 
Commission 
(TCMC) 
has 
a 
broad 
jurisdiction 
over 
most 
of 
the 
above sectors 
and 
subsectors, 
and 
has 
a 
track 
record 
of 
strong 
management 
and 
innovations, 
including 
those 
under 
TUDEPl 
which 
had 
a 
broader 
scope 
than 
the 
proposed 
second 
project. 
Indeed, 
most 
of 
the 
components 
fall 
within 
the 
jurisdiction 
of 
one 
bureau, 
Municipal 
Engineering Bureau 
(MEB) 
which 
also 
was 
the 
main 
implementing 
agency 
of 
TUDEPI. 
The project 
includes 
only 
two 
components 
that 
fall 
outside the 
jurisdiction 
of 
MEB 
and 
only 
weakly coordinated 
by 
TCMC: 
the 
suburban 
sewerage 
and 
the 
ATC 
system. 
These 
are 
expected 
to 
require 
high 
coordination 
efforts 
but 
still 
included 
as 
they 
were considered essential 
in 
the 
efficiency 
and 
innovation 
in 
the 
sectors, 
and 
in 
view 
of 
the 
fact that 
TUDEPl 
components 
that 
were 
outside 
TCMC's 
jurisdiction 
turned out 
to 
be 
greatly beneficial. 
TUDEPl 
components 
outside the 
control 
of 
ME3 
included 
an 
ATC 
system, 
a 
new 
resettlement 
system 
that 
required 
working 
with 
District 
governments, 
solid 
waste management, 
and 
an 
industrial 
pollution 
control 
component 
implemented 
by 
EPB. 
3. 
alternatives 
proposed 
by 
TMG 
have 
been adopted 
with 
relatively 
minor 
modifications, 
but 
in 
some 
instances alternatives 
were 
adopted 
after 
analyses. 
An 
especially 
broad 
range 
of 
options 
were 
studied 
for 
the 
Dagu 
canal 
rehabilitation, 
in 
view 
of 
the 
risk 
and cost 
involved 
in 
dealing 
with 
the 
hazardous 
material 
content 
of 
its 
sediment. 
Mechanical 
dredging 
and 
disposal 
of 
sediment 
along 
the 
canal 
was 
judged 
to 
pose 
unacceptable 
risk 
and 
was 
replaced 
by 
a 
combination 
of 
more 
sophisticated 
and costly 
dredging 
and 
For 
each 
component, 
various altematives 
have 
been 
identified 
and 
evaluated. 
In 
many 
cases 
the 
- 
11 
- 
Page  16
disposal 
methods. 
In 
view 
of 
the 
cost, 
alternatives 
to 
the 
Dagu 
canal 
itself 
were 
considered 
for 
conveyance 
of 
the 
effluent. 
A 
thorough 
analysis 
showed, 
however, 
that the 
hazardous materials, 
though 
substantial, 
can 
be 
safely 
dredged and 
treated 
within 
costs 
justified for 
the benefits. 
For 
water 
reuse, 
the 
proposed 
scope 
was 
reduced 
not to 
include 
residential 
reuse 
of 
reclaimed 
wastewater 
in 
view 
of 
the 
health 
risks 
and 
costs. 
To 
increase 
road 
capacity, a 
main 
alternative 
considered was a 
series 
of 
extensive 
widening 
and 
other improvements 
to 
the 
MRR 
that 
will 
allow 
it 
to 
function 
as 
the 
in-city 
expressway. 
However, 
it 
was 
decided 
that the objective 
would 
be 
too 
expensive 
to 
achieve and 
more 
modest 
improvements 
would 
be 
more 
efficient. 
Sector 
Issue 
Ban 
k-financed 
Wastewater 
and 
solid 
waste 
management, 
transportation, 
industrial 
pollution 
control 
Air 
and 
water 
pollution 
Water 
supply 
and 
sewerage 
Wastewater 
management 
in 
a 
river 
basin 
Road and 
bus 
system 
improvements 
Road 
and 
traffic 
management 
2. 
Major 
related 
projects financed 
by 
the 
Bank 
andor 
other 
development 
agencies 
(completed, 
ongoing 
and 
planned). 
This 
is 
the 
second 
urban 
development 
and environment 
project 
in 
Tianjin. The 
first 
project 
financed a 
similar 
set 
of 
subsector improvements, 
but 
with 
very different 
developmental 
focuses, 
plus 
industrial 
pollution 
control 
and 
solid 
waste 
management. 
It 
was 
rated 
highly 
satisfactory 
in 
achieving 
the development 
objectives. 
The 
proposed 
project 
will 
extend the 
advances 
during 
the 
frrst 
project. 
It 
also complements the 
construction 
and 
expansion 
of 
WWTPs being 
financed 
by 
JBIC and 
ADB. 
A 
proposed 
Hai 
Basin 
Integrated Water 
and 
Environment 
Management 
project 
under 
preparation 
for 
GEF 
financing 
from 
FY 
2005 
also focuses 
on 
improving 
the 
Bohai 
Bay 
water quality, 
and 
will 
include 
a 
direct 
support 
for 
wastewater management 
in 
the 
Tianjin 
suburbs 
and 
the 
Dagu rehabilitation 
as 
well 
as 
complementary 
measures 
of 
groundwater 
management 
and 
water 
conservation. 
More 
recent 
ones 
approved 
in 
FY 
2001 
and 
2002 
include 
the 
Second 
Beijing 
Environment 
Project; 
Hebei 
Urban 
Environment 
Project; 
Liao 
River 
Basin 
Environment 
Project; 
and 
Huai 
River Pollution 
Control 
Project. 
Major 
differences 
of 
the 
proposed 
project 
from 
these 
include 
the 
sewage 
canal 
rehabilitation, 
more far-reaching 
commercialization 
of 
sewerage 
services 
envisaged, 
a 
support 
for 
suburban wastewater 
management, 
and water 
reuse. 
Compared 
with 
other 
urban 
transportation 
projects financed 
by 
the 
Bank 
in 
China, 
the 
project's 
transportation 
components have a 
much 
narrower 
scope 
but 
focus 
on 
new 
experiments 
for 
bus 
priorities 
and 
smaller 
scale 
road 
improvements 
for 
efficient 
utilization 
of 
existing 
roads. 
A 
large 
number 
of 
Bank-financed projects 
in 
China 
support 
urban 
wastewater 
management. 
Latest 
Su 
pew 
ision 
(Bank-financed projects 
only) 
Implementation 
Development 
Progress (IP) 
Objective (DO) 
Project 
(PSR) Ratings 
Tianjin 
Urban 
Development 
S 
HS 
and Environment 
(1) 
Second 
Beijing 
Urban 
S 
S 
Environment 
Hebei 
Urban 
Environment 
S 
S 
Huai 
River 
Pollution 
Control 
S 
S 
Urumqi 
Urban 
Transport 
S 
S 
Liaoning 
Urban 
Transport 
S 
S 
Asian 
Development 
Bank 
improvements 
Other 
development 
agencies 
Tianjin 
Wastewater Treatment 
and 
Water 
Resource 
Protection 
- 
12- 
Page  17
Japanese 
Bank 
for 
International 
Cooperation 
(JBIC) 
Global 
Environment 
Facility 
2. 
is 
old 
(1992) 
and 
focuses 
on 
water 
supply. 
Therefore 
the 
project 
design 
relied 
mainly 
on 
lessons 
from 
the recent 
similar 
Bank 
operations 
in 
China 
and a 
few 
recent 
Bank 
studies, 
mainly 
on 
water 
quality 
and 
WWTP 
performance 
in 
China. 
They 
found 
a 
widespread tendency 
to 
over-design 
WTPs 
beyond 
the 
sewage 
flow 
that 
can 
be 
delivered through 
the 
collection 
system 
or 
beyond 
the 
financial 
capacity 
for 
operation. 
This 
problem 
existed 
to 
a 
small 
extent 
with 
the 
existing 
WWTPs 
in 
Tianjin, 
but 
would 
have 
increased 
drastically 
with 
new 
plants 
being 
built 
with 
ADB 
and 
JBIC 
financing, 
without 
the 
additional 
collection 
system 
proposed under the current project. 
Another 
key 
finding 
was 
that 
water 
pollution 
is 
serious 
and 
growing 
faster 
in 
suburban 
areas 
surrounding large 
cities than 
in 
the 
central cities 
themselves. 
Thus 
starting 
to 
managing 
the 
suburban 
wastewater 
is 
a 
necessary 
complement 
to 
sewerage investments 
in 
the 
city 
of 
Tianjin. 
The 
Bank‘s 
latest 
comprehensive 
review 
of 
experiences 
in 
water 
and sanitation 
sector operations 
Tianjin 
Wastewater Treatment 
Hai 
Basin 
Integrated Water 
and 
Environment 
Management 
project 
(under preparation) 
3. 
around 
the 
world 
identified 
five 
key 
inadequacies 
which 
the 
Bank 
should 
help 
to 
address: 
road 
infrastructure; 
traffic 
management; 
public 
transportation; 
institutions; 
and 
policy 
and regulatory 
framework. 
The 
design 
of 
this 
project 
addresses 
all 
these 
issues 
to 
varying 
degrees 
necessary 
in 
Tianjin 
and 
feasible 
under 
the 
project, 
with 
the focus 
on 
promoting 
public 
transportation. 
In 
the 
case 
of 
public 
bus 
system, 
the 
Review 
noted 
that 
giving 
buses 
exclusive 
rights 
to 
curbs 
and 
other 
road 
infrastructure 
is 
effective 
where 
the 
rules 
are 
enforced 
strongly 
and 
the 
demand 
is 
thin. 
Difficulties 
of 
bus 
priority 
measures 
in 
Chinese 
cities 
may 
be attributed 
to 
the 
weakness 
of 
these 
conditions. 
It 
would 
therefore be a 
challenge, 
and interdepartmental 
coordination 
would 
be 
essential, 
to 
design 
and implement 
bus 
priority 
measures 
that 
would be 
effective. 
The 
latest 
(1997) 
comprehensive 
review 
of 
the Bank-financed 
urban 
transportation projects 
4. 
The 
Bank’s 
review 
of 
institutional 
development 
assistance 
(1995) 
found 
high 
rates 
of 
unsuccessful 
or 
unclear 
outcomes, 
and attributed 
it 
mainly 
to 
the 
weak ownership 
by 
the implementing 
agencies, 
which 
in 
turn 
is 
often 
due 
to 
weak match 
between the 
institutional 
development 
needs 
and 
technical 
assistance 
(TA) 
design, 
and 
the 
lack or 
frequent change 
of 
champions. 
Experiences 
in 
China 
also 
indicate 
similarly 
weak 
outcomes 
of 
TA 
programs 
in 
general. 
In 
addition 
to 
the 
lack 
of 
ownership, 
other 
major 
factors 
appear 
to 
be 
the 
difficulties 
that 
international 
consultants face 
in 
understanding 
local 
situations 
and 
communicating 
with 
counterparts, 
as 
well 
as 
the 
weak 
skills 
in 
managing 
consultant 
contracts. 
TA 
components 
proposed under 
the 
project 
are 
limited 
to 
issues 
for which 
there 
is 
a strong 
and 
well-defined 
TMG 
desire 
for 
resolution, and 
are 
structured 
to 
utilize 
local 
expertise 
to 
the 
maximum 
extent available, and 
with 
independent experts 
to 
help 
manage 
the 
TA 
components. 
- 
13- 
Page  18
4. 
Indications 
of 
borrower 
commitment 
and 
ownership: 
As 
elaborated 
in 
Section 
D.l 
(paragraphs 
1 
and 
2) above, 
the 
project 
is 
largely 
based 
on 
TMG's 
own 
programs, 
included 
in 
its 
near-term 
investment plan. 
Tianjin 
was the 
first 
city 
in 
China 
to 
install 
and 
operate 
WWTPs, 
levy 
significant 
sewerage 
tariffs, 
install 
a 
significant 
wastewater reuse 
system, 
and 
complete the 
ring 
road 
structure; 
and the 
first 
major 
city to 
divest 
WWTP 
and 
introduce 
a 
competitive 
public 
bus 
system. 
These 
actions 
signify 
TMG's 
strong 
comi!ment 
to 
the 
innovations and 
investments 
proposed 
for 
the 
project. 
Whereas 
the 
proposed 
components 
for 
suburban 
sewerage 
and 
bus 
priority 
corridors 
have been 
added 
to 
TMG's 
proposal, 
they 
are 
outside 
TMG's 
official 
plan 
only 
at the 
level 
of 
specific 
details, 
not 
a 
matter 
of 
policy 
commitment. 
The 
official 
master 
plan 
of 
Tianjin 
set 
ambitious 
goals 
to 
treat 
50% 
of 
suburban wastewater 
and 
increase 
the 
modal 
share 
of 
public 
transportation 
to 
25% 
by 
2010. 
5. 
Value 
added 
of 
Bank 
support 
in 
this 
project: 
1. 
good 
use. 
Although 
TMG 
has 
large 
overall 
fiscal 
resources (about 
$3.2 
billion 
a 
year), 
it 
has a 
very 
broad 
mandate 
and cannot easily finance 
lumpy 
capital 
investments 
in 
an 
efficient 
sequence. 
For 
example, 
Dagu 
canal 
has been 
periodically 
dredged 
and 
repaired 
in 
small 
sections, 
but 
these 
piecemeal 
efforts 
are 
not 
efficient 
as 
the 
sections become 
contaminated again 
with 
materials 
from 
other 
parts 
of 
the 
system. 
With 
such 
piecemeal 
works, 
it 
has 
also 
been 
difficult to 
afford 
the 
necessary analysis 
and 
safe 
remediation 
measures 
including 
the 
landfill. 
The 
Bank's 
mobilization 
of 
international 
experts 
and 
the 
financing 
bring 
the necessary resources together 
to 
achieve 
fundamental and 
efficient 
remediation. 
Similarly 
for 
transportation, 
due 
to 
interdependence 
of 
road 
sections, 
piecemeal improvements 
of 
sections are 
wasted 
until 
connected sections 
are 
fully 
improved. 
The 
proposed 
project 
would 
put 
the 
Bank's 
financial, 
technical, 
and 
institutional 
resources 
all 
to 
2. 
The 
Bank's 
role 
as 
a 
knowledgeable 
third 
party 
is 
put 
in 
good 
use 
for 
the 
refinement 
of 
the 
commercialization framework 
that 
TMG 
established 
but 
wishes 
to 
improve, and 
for 
promotion 
of 
necessary 
but 
institutionally 
difficult 
interventions 
such 
as 
the establishment 
of 
the 
proposed 
transportation 
coordination 
mechanism 
and 
the 
small 
town 
sewerage 
systems. 
The 
latter 
is 
another 
good 
example 
of 
the 
strategic 
use 
of 
the Bank's 
financial 
and technical 
resources 
on 
areas 
where 
these 
resources 
are 
critically 
lacking 
due 
to 
the current 
institutional 
and 
economic framework. 
E. 
Summary 
Project 
Analysis 
(Detailed 
assessments 
are 
in 
the 
project file, 
see 
Annex 
8) 
1. 
Economic 
(see 
Annex 
4): 
dl 
Cost 
benefit 
- 
Cost 
effectiveness 
@ 
Other 
(specify) 
1. 
notoriously 
difficult to 
quantify, 
as 
there 
are 
no 
markets 
or 
comparable transactions 
for 
much 
of 
the 
benefits, 
even 
if 
they 
can 
be 
specified at all. 
One 
result 
is 
frequent undervaluation, 
In 
the 
case 
of 
the 
proposed 
project 
which 
mostly 
consists 
of 
investments 
complementing existing 
assets, 
this 
particular 
result 
is 
not 
a concem.  Rather, the 
usual 
analysis produces 
implausibly 
high 
benefit 
estimates 
due 
to 
the 
so-called endogeneity 
or 
network 
effects. 
Economic evaluation 
of 
urban road 
components 
of 
the 
project, 
for 
example, 
yields 
benefit-cost 
ratios 
of 
6 
to 
50. 
These 
provide 
clear 
evidence 
in 
favor 
of 
the project's 
strategy 
to 
maximize 
the 
utilization 
of 
existing 
assets. 
However, 
these 
cannot 
be interpreted 
in 
the 
usual 
way, 
since 
these 
compare 
marginal 
benefits 
generated 
from 
larger 
networks 
against 
the 
cost 
only for 
supplementary, 
corrective 
investments. 
- 
NPV=US$ million; 
ERR 
= 
% 
(see 
Annex 
4) 
- 
Values 
of 
improvements 
in 
transportation, 
and especially 
the 
environment 
and 
institutions, 
are 
- 
14- 
Page  19
2. 
interprets 
positive 
net present value 
as 
the 
decisive indicator, 
of 
limited 
usefulness. 
The 
essential 
analytical 
task 
is 
evaluation of 
alternatives, 
and 
various 
analytical 
methods have been 
employed 
for 
this 
purpose. 
For traffic 
interchanges, 
the 
most 
efficient 
configurations 
were selected 
by 
comparing 
estimated 
marginal 
benefits 
of 
different 
designs. 
For 
the 
wastewater reuse 
scheme, 
conventional 
benefit-cost 
analysis 
and 
the 
associated 
decision 
rule 
was 
applied 
to 
select 
the 
efficient 
scale 
and 
technology options. 
In 
evaluating 
different technology 
and phasing 
options 
for 
the 
Shuanglin 
WWTP, 
a 
comparative 
cost 
analysis was 
used, 
which 
showed 
that 
cost savings 
from 
adopting a 
level 
of 
treatment, 
that 
is 
adequate 
at 
present 
but 
lower 
than 
the 
official 
standard, 
is 
minor 
and easily cancelled 
out 
by 
higher 
cost 
of 
adding 
facilities 
to 
bring 
up 
the treatment 
to 
the standard later. 
The 
nature 
of 
the benefit-cost analysis 
in 
this 
situation 
renders the 
normal 
decision 
rule, 
which 
3. 
optimal 
pricing 
for sewerage 
services. 
For 
sewerage, 
not only 
is 
the 
valuation 
difficult 
and 
ambiguous, 
but 
users 
(generator 
of 
wastewater) 
and beneficiaries 
are 
largely 
separate. 
While 
the 
"polluter 
pays" 
principle 
adopted 
in 
the 
environmental 
law 
of 
China provides 
a sound 
qualitative 
guidance, the 
simple 
prescription 
of 
full-cost 
levy 
from 
users 
is 
unlikely 
to 
induce 
optimal 
behavioral 
responses 
on 
the 
part 
of 
wastewater generators 
and 
service 
providers. 
This 
is 
particularly 
true 
as 
there 
does 
not 
exist 
even 
a 
rudimentary 
Coaseian 
bargaining 
framework 
such 
as 
pollution 
trading 
or 
effective regulatory 
institution. 
At 
the 
level 
of 
large 
jurisdictions 
the 
issues are 
at 
least 
conceptually 
clear, 
making 
it 
possible 
in 
principle 
to 
set 
quality 
standards 
and 
consider 
bargaining, 
but 
it 
is 
not 
feasible 
at 
the 
level 
of 
individuals.  There 
is 
an 
additional 
problem 
that water consumption 
which 
is 
a 
normal 
basis 
of 
sewerage 
tariffs 
is 
a 
poor 
proxy 
for 
pollution. 
Therefore 
pricing 
of 
sewerage 
services has 
to 
be guided 
not 
only 
by 
economic 
efficiency 
considerations 
but 
more 
by 
considerations 
of 
affordability 
and 
cost 
sharing 
among 
involved 
parties. 
An 
analytical 
difficulty 
that 
results 
in 
a 
serious substantive 
consequence 
is 
the 
indeterminacy 
of 
2. 
Financial 
(see 
Annex 
4 
and 
Annex 
5): 
NPV=US$ 
million; 
FRR 
= 
% 
(see 
Annex 
4) 
1. 
The 
above 
discussion 
highlights 
user 
charges, 
affordability 
and 
sustainability 
as 
main 
issues 
of 
practical 
importance 
for 
the 
planning 
of 
transportation 
and environmental 
infrastructure. 
For 
urban 
roads, 
economic 
analysis 
is 
relatively 
simple, 
certainly 
compared 
with 
that 
for 
the environment, 
but 
the 
cost of 
toll 
collection usually 
indicates 
in 
favor 
of 
financing 
by 
the government 
partly 
out 
of 
the various 
vehicle 
charge 
revenues. 
Detailed 
analysis 
of 
transportation 
facility 
finance 
was 
not 
attempted 
during 
project 
preparation 
as 
the 
project 
represents 
a 
minor 
part 
of 
Tianj 
in's 
overall 
transportation expenditures 
and the revenue system 
is 
not 
open 
to 
modifications 
in 
the short 
term. 
2. 
A 
detailed 
analysis was 
necessary 
in 
the 
case 
of 
sewerage, 
as 
TMG 
is 
undertaking 
an unusually 
large 
capital 
investment 
program to 
meet the 
central government 
mandate 
for 
wastewater treatment 
and 
water resource 
protection. 
The 
program 
would 
complete 
the 
construction 
of 
the 
sewerage 
system 
of 
the 
city 
over 
the 
next 
five 
or 
six 
years, 
requiring 
about 
$500 
million, 
half 
with 
financing 
from 
the Bank, 
JBIC, 
and 
ADB, 
and another 
half 
from 
local 
sources. 
After 
the 
project 
completion, the 
cost 
of 
operating 
the 
facilities 
and 
repay the 
loans 
will 
go 
up 
dramatically 
to 
over 
$100 
million 
a 
year 
at 
the 
peak. 
In 
comparison, the 
operating 
cost 
of 
the 
current 
sewerage 
system 
is 
around 
$25 
million 
a 
year, 
and 
the 
sewerage 
tariff 
revenues, 
though relatively 
high 
among Chinese cities, 
barely 
cover 
cash 
expenses 
which 
are 
about 
two 
thirds 
of 
the 
total 
cost. 
TMG 
has 
committed to raising 
the 
sewerage 
tariff 
to 
recover 
full 
resource cost 
- 
consisting 
of 
operations, maintenance, 
rehabilitation, 
and depreciation 
from 
2006 
or 
earlier. 
The 
projected 
average water-sewerage 
tariff, 
including 
the 
necessary 
sewerage 
tariff 
of 
about 
Y 
1.51m3, 
would 
be 
high 
but 
would 
be 
below 
3% 
of 
incomes 
of 
90% 
of 
the 
Tianjin 
households 
in 
2006, 
a 
commonly 
used 
affordability 
threshold 
(Refer 
to 
Annex 
4, 
Section 
C.) 
Expansion 
of 
the service 
areas 
could 
bring 
this 
unit 
cost 
down 
as 
there 
would 
remain 
some 
slack capacity 
for 
wastewater treatment. 
- 
15- 
Page  20
3. 
carrying 
out various 
reform 
measures 
toward 
a 
market-based 
system. 
As 
briefly 
discussed 
in 
Section 
C.2, 
TMG 
established the 
Tianjin 
Drainage 
Company (TDC), 
a 
fully 
government-owned 
company, 
to 
carry out 
the 
operation 
of 
sewerage 
facilities 
in 
1996. 
In 
2000 
it 
took 
a 
further 
step 
to 
commercialize the 
wastewater 
treatment 
systems, 
by 
turning 
over 
two 
existing 
WWTPs 
to 
a Chuang 
Ye 
Environmental 
Protection Company 
(CYE), 
taking 
63% 
of 
the 
company's 
shares, 
which 
is 
listed 
in 
the 
Shanghai 
and 
Hong 
Kong 
stock 
exchanges. 
The 
company 
operates 
the 
WWTPs 
under a 
standard 
rate-of-return 
contract 
with 
15% 
return per 
year 
on 
net 
fixed 
assets 
and 
pass-through 
of 
operating 
costs. 
It 
is 
also 
planned 
that 
CYE 
will 
take 
over 
financing, 
construction, and 
operating 
responsibilities 
for 
new 
WWTPs 
and 
associated 
trunk 
sewers 
under construction 
with 
financing 
from JBIC 
and 
ADB. 
An 
apparently 
important 
motivation 
is 
to 
raise investment 
funds 
through the stock 
exchanges 
on 
which 
it 
is 
listed. 
To 
secure adequate 
financing 
as 
well 
as 
efficient 
operation 
of 
sewerage services, 
TMG 
has 
been 
4. 
contractual 
arrangements, 
together 
with 
the 
cost 
of 
collection network 
operations 
and 
maintenance, 
would 
be 
as 
much 
as 
Y 
61m3 
in 
2006, 
well 
above the 
levels 
affordable 
by 
consumers 
and 
TMG. 
The 
large discrepancy between 
this 
and the 
"full 
resource 
cost", 
discussed 
in 
paragraph 2 
above, 
consists 
of 
the 
company 
profits 
and 
business 
and 
income 
taxes. 
While 
some 
"commercialization premium" 
would 
be 
inevitable, 
it 
would 
be 
necessary 
to 
review 
whether 
the 
projected 
level 
would 
be 
justified 
in 
view 
of 
the 
benefits 
of 
the 
commercialization 
or 
the 
international 
practices. 
Under common 
practices 
in 
the 
market 
economies, 
the 
return 
on 
assets 
would 
be 
set 
around 
the 
average 
cost 
of 
funds 
(which 
in 
the 
case 
of 
the 
current 
Tianjin 
situation 
would 
be 
6.5% 
or 
less 
per 
year), 
and 
the 
taxes 
would 
either 
be 
exempted 
or 
redirected 
to 
the 
sewerage services. 
A 
projection 
incorporating similar 
arrangements shows 
that 
the 
required 
payments 
to 
the 
WWTP 
and 
sewer operations, 
net 
of 
taxes 
and 
dividends 
paid 
to 
TMG, 
would 
be 
up 
to 
Y 
2.51m3. 
This 
will 
require 
contribution 
by 
TMG 
beyond 
the 
tariff 
revenues discussed 
above, 
but 
the amount 
will 
represent 
a 
similar proportion 
of 
TMG 
infrastructure expenditures 
as 
at 
present. 
In 
addition, operating 
efficiency 
can 
be 
enhanced 
through a 
combination 
of 
incentives 
and 
regulations. 
The 
Action 
Plan 
described 
in 
Section 
(2.2 
will 
be carried 
out 
to review 
the 
options, 
and 
establish and 
implement 
appropriate 
institutional, 
financial 
and contractual 
arrangements 
under 
a clear 
regulatory 
framework. 
Financial 
projections 
indicate, however, that payments 
for 
all 
WWTPs 
under 
the current 
5. 
A 
general 
municipal 
wastewater management system 
therefore 
could 
be 
a 
burden 
that the 
residents 
would 
find 
difficult to 
afford 
at 
present. 
On 
the other 
hand, 
their 
growing industrial 
bases 
are 
contributing 
a 
large and increasing 
share 
of 
pollution 
and 
the 
District 
governments 
and 
industrial 
enterprises 
are 
strongly motivated 
to 
manage the wastewater 
in 
order 
to 
ensure sustained 
industrial 
growth.  The 
initial 
focus 
of 
the 
wastewater management 
in 
small 
towns 
therefore 
should be 
on 
the 
more affluent 
industrial 
towns, 
and 
their 
industrial 
users. 
Most 
suburban 
towns 
have 
far lower 
per 
capita 
GDP 
and 
fiscal 
resources 
than 
the 
Tianjin 
City. 
Fiscal 
Impact: 
6. 
spent 
on 
infrastructure, 
not 
including 
user 
charges 
and other 
special revenues.  Subsidies 
for 
drainage 
and 
sewerage, 
mostly 
for 
capital 
expenditures, 
in 
2002 
was 
about 
Y 
110 
million 
and 
is 
projected 
to 
go 
up 
to 
about 
Y 
400-500 
million 
a year 
in 
the 
next few 
years. 
After 
the 
completion 
of 
the 
current expansion 
program, assuming 
the 
modifications 
in 
contractual 
arrangements 
and 
sewerage 
tariffs 
described 
in 
paragraphs 
2 
and 
4 
above, 
TMG 
would 
need 
to 
provide 
about 
Y 
300 
million 
per 
year 
to 
fill 
the 
gap 
between 
the expenditures 
and 
the 
tariff 
revenues. 
This 
is 
expected 
to 
be 
12%- 
15% 
of 
budgetary 
expenditures 
on 
infrastructure, compared 
with 
the 
7% 
in 
2002 
and 
some 
28% 
in 
2003 
and 
2004. 
If 
the 
current 
and 
proposed 
contracts 
with 
CYE 
remain 
in 
force, 
the 
gap 
is 
projected 
to 
be 
about 
three 
times 
the 
tariff 
revenues. These 
subsidies, 
while 
considerably 
higher 
than 
the 
current level, can be 
considered 
Of 
TMG's 
current 
general revenue 
budget 
of 
about 
Y 
30 billion, 
about 
Y 
1.7 
billion 
or 
5.5% 
is 
-16- 
Page  21
reasonable 
and 
sustainable 
in 
view 
of 
the 
greatly 
increased 
services. 
They 
may be 
controlled 
and 
reduced 
further 
with 
stronger 
regulatory regime 
that 
encourages 
competition 
and 
operating efficiency. 
3. 
Technical: 
A 
few 
components 
of 
the 
project 
raise 
the 
following 
technical 
issues 
as 
they 
are 
novel 
in 
China, 
and 
relatively 
new 
even 
in 
other 
countries. 
These 
components 
therefore have been prepared 
with 
the 
assistance 
of 
state-of-art 
international 
expertise. 
For 
some 
components, such 
preparation 
work 
will 
continue 
after 
the 
project 
start. 
0 
Wastewater 
reuse: 
microfiltration 
process 
has 
been 
chosen, 
and 
will 
be supplied and installed 
in 
one 
package. 
Firm 
user 
commitment 
has 
yet to 
be 
obtained. 
0 
Rehabilitation 
of 
Dagu 
Canal: 
Detailed 
characterization 
of 
sediment 
and 
design 
of 
its 
removal, 
treatment, 
and 
disposal 
will 
be 
carried 
out 
section 
by 
section, 
and 
these 
will 
be 
subject 
to 
the 
Bank's 
prior 
review 
before 
bidding. 
0 
Bus 
priority 
measures: 
Design and 
protection 
of 
bus 
ways, 
priority 
lanes, 
access 
points, 
or 
their 
combinations 
in 
the 
narrow 
streets 
of 
Tianjin 
will 
be 
further 
studied 
and 
designed 
with 
consultant 
assistance. 
0 
Central 
city 
(Dagunan) 
traffic 
interchange: 
Due to 
its 
location 
in 
a 
busy 
commercial 
area, 
details 
and 
experiences 
of 
area 
traffic 
management 
schemes 
of 
similar 
situations 
will 
be 
reviewed 
and 
lessons 
incorporated 
in 
the 
design. 
4. 
Institutional: 
4.1 
Executing 
agencies: 
Preparation 
and 
implementation 
of 
project 
components 
are 
the responsibility 
of 
the 
following 
TMG 
agencies 
in 
accordance 
with 
their 
nom1 
jurisdictions: 
0 
Construction 
and 
Management 
Commission (TCMC): 
overall project 
coordination, 
and 
management 
of 
institutional 
development components 
in 
cooperation 
with 
line 
agencies 
directly 
in 
charge, 
such 
as 
MEB, 
Urban 
Planning and Real 
Estate Bureau, 
and 
Traffic 
Management Department. 
Municipal 
Engineering 
Bureau: 
urban 
sewerage 
and 
drainage, wastewater 
reuse, 
Dagu 
canal 
rehabilitation, 
urban 
roads, 
bus 
priority 
measures; 
Traffic 
Management 
Department 
(TMD) 
of 
the 
Public 
Security 
Bureau: 
traffic 
signal 
control 
system; 
Suburban 
Districts 
and 
TEDA 
Water 
Co. 
under 
the 
direction 
of 
the 
Coastal 
Area 
Administration: 
suburban 
sewerage. 
0 
0 
0 
MEB 
is 
responsible 
for major 
part 
of 
the 
project 
preparation 
and 
implementation. 
However, 
it 
will 
work 
with 
other 
agencies 
in 
construction and 
management 
of 
the 
facilities, 
as 
follows: 
0 
0 
The 
Tianjin 
Drainage Company 
will 
manage the 
city's 
drainage 
and 
sewerage 
systems 
on 
completion, 
unless 
an 
alternative 
is 
recommended 
under 
the 
Sewerage 
Sector 
Study 
described 
in 
Section 
C.2. 
For 
Dagu 
Canal 
rehabilitation, 
MEB 
will 
work 
under the 
direction 
of 
the Steering Committee 
consisting 
of 
representatives 
from 
TCMC, 
the 
municipal 
environmental 
protection 
bureau 
(EPB), 
the 
municipal 
water resources 
bureau 
(WRB), 
and 
the three suburban 
districts 
which 
Dagu 
Canal 
runs 
through. 
The 
WRB 
will 
be 
closely 
involved 
in 
the 
rehabilitation 
of 
the three 
Dagu 
pump 
stations 
and 
dredging 
works, 
and 
in 
the 
operations 
including 
the 
distribution 
of 
reclaimed 
wastewater. 
EPB 
will 
-17- 
Page  22
play 
a 
key role 
in 
the 
analysis 
of 
sediment 
and 
treatment 
and 
disposal 
of 
contaminated 
sediment. 
The 
two 
water 
reuse 
facilities 
will 
be 
managed 
by 
the 
Tianjin 
Water 
Reuse 
Company, 
recently 
established 
to 
manage 
and 
promote water 
reuse. 
For 
bus 
priority 
measures, 
MEB 
will 
work 
with 
the 
technical 
guidance 
of 
the 
Public 
Transportation 
Management Department 
of 
TCMC 
and 
TMD. 
e 
e 
4.2 
Project 
management: 
Each 
of 
the 
above 
agencies has established 
a 
project 
management 
office 
to 
deal 
with 
its 
components. 
The 
overall project 
will 
be 
coordinated 
by 
the 
Project 
Management 
Office 
(PMO) under 
TCMC. 
They 
will 
report 
to 
and 
be 
guided 
by 
the 
Project 
Leading 
Group 
consisting 
of 
a 
TMG 
vice mayor 
and directors 
or 
deputy 
directors 
of 
related 
commissions 
and 
bureaus. 
TMG 
has 
made 
the 
commitment that 
appropriate 
functions, 
staffing, and 
financing 
of 
the 
municipal 
leading 
group and 
project 
management 
office 
will 
be 
maintained. 
4.3 
Procurement 
issues: 
Procurement 
arrangements 
and 
issues 
are 
discussed 
in 
hex 
6(A). 
A 
specialist 
staff 
of 
the 
Bank 
carried 
out 
a procurement capacity 
assessment 
and 
found 
that, 
in 
general, adequate 
procedures 
and 
staff 
experienced 
under 
TUDEPl 
are 
in 
place 
in 
the 
PMOS 
at the 
municipal 
and 
implementing 
agency 
levels 
to 
provide 
a 
solid 
basis for management 
of 
procurement under 
the 
project. 
These 
offices 
and 
staff 
will 
be 
assisted 
by 
two 
specialist 
procurement 
agencies. 
Several discrepancies 
between 
the 
Procurement 
Law 
of 
China 
and 
the 
Bank's 
guidelines 
for 
national competitive 
bidding 
have 
been 
identified, 
and 
assurance has 
been 
obtained 
for 
compliance 
with 
the 
latter 
in 
procurement 
under 
the 
project. 
4.4 
Financial 
management 
issues: 
Financial 
management 
systems 
and 
issues are 
discussed 
in 
Annex 
6(B). 
No 
special issue 
has 
been 
identified. 
5. 
Environmental: 
5.1 
Summarize 
the 
steps 
undertaken 
for 
environmental 
assessment 
and 
EMP 
preparation 
(including 
consultation 
and 
disclosure) 
and 
the 
significant 
issues 
and their 
treatment 
emerging 
from 
this 
analysis. 
1. 
About 
80% 
of 
the 
project 
investment 
is 
directed 
to 
improving 
and 
protecting 
water 
quality 
in 
the 
Tianjin 
municipality 
and 
the 
Bohai 
Bay.  The intended 
benefits, 
beneficiaries 
and 
responsible 
institutions 
are 
identified 
and 
discussed 
in 
Chapter 
C. 
Even 
the 
transportation 
components 
are 
shown 
to 
have 
positive 
environmental impacts 
as 
they 
are 
designed 
to 
reduce 
idling 
times 
and 
overall 
traffic 
demand. 
However, 
they 
may 
also increase 
air 
pollution 
in 
some 
localized 
areas. 
These 
effects were analyzed 
with 
the 
use 
of 
an 
airshed model, 
various 
modifications 
have 
been 
incorporated 
to 
minimize 
the 
adverse 
impacts. 
Similarly local 
effects 
are 
projected 
from 
increased 
noise 
of 
traffic 
interchanges. 
Noise 
barriers 
and 
low 
noise 
paving 
materials 
will 
be 
used 
to 
minimize 
the effects. 
Construction 
noise 
and 
dust 
would 
be 
another, 
temporary environmental 
impacts.  Measures 
to control 
these 
will 
be incorporated 
in 
construction 
contracts. 
Environmental 
Category: 
A 
(Full 
Assessment) 
2. 
removal, treatment, 
and 
disposal 
of 
the 
contaminated 
sediment. 
Substantial physical, chemical, 
and 
toxicological 
sampling 
of 
the 
sediment 
has 
been 
done 
under the 
direction 
of 
a 
top international 
limnologist, 
and 
it 
has 
been conservatively estimated that 
not 
more 
than 
half 
the 
sediment 
contains 
hazardous 
substances 
that 
require 
special treatment. 
A 
pilot 
dredging 
was also 
conducted 
to 
determine 
the 
physical 
characteristics 
of 
the 
sediment 
and 
to 
experiment 
with 
various 
dredging, 
transportation and 
treatment methods. 
But 
its 
heterogeneous 
nature 
leaves considerable uncertainties. 
A 
detailed 
Environmental 
Management 
Plan 
(EMP) 
will 
be 
established 
as 
a 
condition 
of 
disbursement 
and 
followed 
Rehabilitation 
of 
Dagu 
Canal 
poses 
significant environmental 
challenges 
in 
the characterization, 
-18- 
Page  23
during 
the implementation, 
to 
ensure 
intensive 
and 
systematic 
sampling and 
analysis 
of 
sediment 
section-by-section, 
and the 
use 
of 
proper 
dredging, treatment 
and 
disposal techniques. 
During 
dredging, 
sections 
of 
the canal 
will 
be 
closed 
off 
and 
the 
flow 
routed 
around 
the section. 
This 
will 
ensure 
that 
toxic 
compounds released 
from 
the 
sediment 
during 
dredging 
will 
not 
escape 
downstream. 
Water 
caps 
will 
also 
be used 
during 
dredging, 
as 
required, 
to 
reduce odor. 
Various 
methods 
will 
be 
adopted 
for 
sediment 
disposal depending 
on 
the 
degree 
of 
contamination 
including: 
disposal 
in 
two 
hazardous waste 
landfills, 
use 
as 
earth 
construction 
material, and disposal 
on 
agricultural 
land. 
Sites 
for 
the 
landfills 
have 
been 
secured, 
and they 
have 
sufficient 
space 
to 
dispose 
of 
all 
of 
the 
sediment, 
contaminated 
or 
not, 
in 
the 
event 
other disposal 
options 
are 
not 
possible. 
The 
landfills 
and 
their 
operating 
procedures 
would 
be 
designed 
with 
the 
assistance 
of 
consultants experienced 
in 
hazardous waste disposal. 
3. 
public 
health 
risks. 
In 
view 
of 
this 
risk, 
the 
project 
would 
support the reuse 
facilities 
only 
for 
nonresidential 
uses. 
To 
minimize 
the 
remaining 
risks, 
microfiltration 
system 
will 
be 
used and 
the 
reclaimed water 
distribution 
systems 
will 
be 
marked 
with 
distinct 
colors 
to 
avoid 
accidental 
cross-contamination. 
The 
EMP 
also 
includes intensive 
monitoring 
of 
the 
reclaimed water quality, 
use, 
and 
disposal. 
Use 
of 
reclaimed 
water 
for 
municipal 
and 
industrial 
purposes 
is 
a 
new activity 
with 
potential 
4. 
The 
second 
most important 
safeguard issue 
is 
resettlement. 
The project 
design 
has 
been adjusted 
to 
minimize 
resettlement. 
The 
project 
components 
within 
the 
city 
proper 
is 
currently 
estimated 
to 
require 
resettlement 
of 
66 
households (156 
persons), 
60 
shops 
and 
offices 
with 
270 
workers. 
No 
job 
loss 
is 
expected. 
The 
project 
also 
would 
require acquisition 
of 
some 
3 
1 
ha 
of 
farmland 
affecting 
433 
farmers, 
and 
17 
ha 
of 
other 
land. 
Full 
compensation 
has 
been 
committed 
to. 
Dagunan 
interchange, suburban 
sewerage, 
and 
bus 
corridor 
component designs 
will 
be 
finalized 
during 
the 
project 
implementation, 
When 
they 
are 
finalized, 
individual 
RAPS 
will 
be 
prepared 
under 
the 
Resettlement 
Policy 
Framework 
(WF) 
that 
has 
been 
agreed 
upon. 
5. 
loans, resettlement 
for 
these 
has been 
examined 
in 
detail 
involving 
the 
review 
of 
the 
resettlement 
plans 
as 
well 
as 
interview 
of 
affected 
people. 
For 
the 
construction 
of 
two 
WWTPs 
financed 
by 
JBIC 
and 
ADB, 
some 
27 
ha 
of 
orchard 
and 
22 ha 
of 
fish 
farm 
have been 
acquired 
in 
semi-urban 
locations, 
affecting 
the 
villages that 
own 
them 
and 
in 
particular 
11 
households 
who worked 
on 
these 
properties 
as 
employees 
or 
contractors. 
The 
compensation and 
rehabilitation 
measures 
have 
been 
found 
to 
be 
satisfactory 
under 
the 
standards 
that 
would 
have 
applied 
under 
the 
Bank-financed project. 
5.2 
What 
are 
the 
main 
features 
of 
the 
EMP 
and 
are 
they 
adequate? 
The 
project 
EMP 
consists 
of 
six 
plans 
to 
manage 
environmental 
monitoring 
and 
mitigating 
actions 
for 
different 
components adequately, 
as 
well 
as 
the 
framework 
for 
EA 
and 
EMP 
for 
components whose 
designs 
have yet 
to 
be 
finalized. 
In 
view 
of 
the 
high 
risks 
involved 
in 
the 
Dagu 
canal 
rehabilitation, 
a 
special 
detailed 
Environmental 
Management 
Plan 
for 
it 
is 
being 
developed, 
as 
a 
condition 
of 
disbursement, 
primarily 
to 
ensure 
proper 
monitoring 
and 
control 
of 
the 
Dagu 
sediment 
remediation 
program. 
In 
addition, 
the current 
EMP 
includes 
an 
industrial 
pollution monitoring 
program 
in 
the 
Dagu 
Canal 
watershed 
to 
ensure 
that 
the 
Canal 
does 
not 
become 
contaminated 
again, 
particularly 
with 
heavy 
metals. 
The overall 
EMP 
implementation 
will 
be 
supervised 
by 
PMO 
and 
EPB. 
The 
component 
EMPs 
will 
be 
carried 
out 
by 
the project implementation 
units 
under 
the 
direction 
of 
EPB 
(MEB). 
The 
special 
EMP 
for 
the 
Dagu 
canal 
will 
be 
carried out 
by 
MEB 
and 
its 
steering 
committee 
which 
includes 
EPB, 
WRB, 
and 
three concerned 
districts. 
5.3 
For 
Category 
A 
and 
B 
projects, 
timeline 
and 
status 
of 
EA: 
Since the 
urban 
sewer component supports 
WWTP 
investments 
financed 
with 
JBIC 
and 
ADB 
Date 
of 
receipt 
of 
final 
draft:  October 15,2002 
- 
19- 
Page  24
with 
further clarifications 
and 
amendments dated 
December 
2002, January 
and 
March 
2003 
5.4 
How 
have 
stakeholders been 
consulted 
at 
the 
stage 
of 
(a) 
environmental 
screening 
and 
(b) 
draft 
EA 
report 
on 
the 
environmental 
impacts and proposed environment 
management 
plan?  Describe 
mechanisms 
of 
consultation 
that 
were 
used 
and 
which 
groups 
were 
consulted? 
Public 
consultations 
through 
questionnaire, 
interviews, and 
public 
meetings were conducted 
(a) 
first 
in 
early December 
2001 
and 
(b) 
then 
with 
draft 
EA 
in 
early 
March 
2002. 
They 
were 
open 
to 
general 
public 
and 
invited 
persons 
and 
organizations 
included 
neighborhood 
groups, 
NGOs, 
universities, 
sector 
experts, 
and 
media. 
Key 
stakeholders 
for 
Dagu 
rehabilitation 
are 
people 
living 
along 
the 
canal, whose 
number 
is 
small 
because 
it 
runs 
through 
mainly rural 
areas; 
people 
living 
near 
the 
proposed 
landfill 
sites; 
and 
farmers 
who 
may 
choose 
to 
apply 
the uncontaminated, 
nutrient rich, 
sediment 
on 
their 
fields. 
The 
public 
consultation 
on 
EA 
involved 
these 
people. 
Coordination 
of 
Dagu 
Canal 
work 
has 
been, 
and 
will 
continue 
to 
be, 
carried 
out 
by 
a Steering Committee consisting 
of 
representatives 
from 
TMG, 
MEB, 
EPB, 
WRB, 
and the three 
districts 
crossed 
by 
the Canal. 
5.5 
What 
mechanisms 
have 
been 
established 
to 
monitor 
and 
evaluate the 
impact 
of 
the 
project 
on 
the 
environment? 
Do 
the 
indicators 
reflect 
the objectives 
and 
results 
of 
the 
EMP? 
Systematic 
monitoring 
programs 
and 
institutional 
arrangements 
have 
been 
established 
for 
each 
component, 
including 
construction 
activities, 
as 
part 
of 
the 
EW. 
The 
information 
collected 
will 
be 
reported 
to 
EPB, 
according 
to 
the 
existing 
regulations 
as 
well 
as 
the 
EMP, 
and 
the 
PMO. 
Summary 
information 
will 
be reported 
as 
part 
of 
the 
semi-annual 
project 
progress reports. 
As 
the 
project 
is 
largely 
for 
environmental 
improvement, a 
subset 
of 
these 
monitoring 
programs constitute the 
major 
part 
of 
the 
project's 
overall 
outcome 
and impact 
indicators. 
6. 
Social: 
6.1 
Summarize 
key 
social 
issues 
relevant 
to 
the 
project 
objectives, 
and specify 
the 
project's social 
development outcomes. 
An 
objective 
of 
the 
project 
is 
to 
improve 
the 
equity 
of 
transportation 
and 
environmental 
services 
by 
expanding 
their availability 
to 
lower 
income 
groups. 
This 
will 
be 
achieved 
mainly 
through 
the extension 
of 
sewerage 
to 
areas 
(suburban 
areas 
as 
well 
as 
outer 
urban 
districts recently incorporated 
into 
the 
city) 
with 
high 
proportions 
of 
low 
income 
residents, 
and 
through 
the 
facilitation 
of 
bus 
services. 
On 
the 
other 
hand, 
the 
projected 
substantial 
increase 
in 
the 
sewerage 
tariff, 
partly 
due 
to 
the 
project, 
can 
impose a 
substantial 
burden 
on 
low 
income 
residents. 
An 
analysis 
shows, 
however, 
even 
for 
households 
in 
the 
lowest income 
decile, 
the water 
and 
sewerage 
bill 
combined 
would 
be 
around 
3% 
of 
the household 
income, 
substantially 
below 
the conventional 
criterion 
of 
affordability, 
5% 
of 
household 
income. 
6.2 
Participatory 
Approach: 
How 
are 
key 
stakeholders 
participating 
in 
the 
project? 
Written 
undertaking 
of 
large 
users and 
local 
jurisdictions 
needs 
to 
be 
obtained before 
starting 
the 
construction 
of 
suburban 
sewerage 
systems. 
Dagu 
canal 
rehabilitation 
will 
be 
overseen 
by 
a 
steering 
committee 
including 
WRB 
and 
the representatives 
of 
Districts along 
the 
canal. 
Water off-take wells 
will 
be 
built 
along 
the 
rehabilitated 
canal 
to 
allow 
easy 
access 
by 
farmers. 
6.3 
How 
does 
the 
project 
involve 
consultations or 
collaboration 
with 
NGOs 
or 
other 
civil 
society 
organizations? 
Trade unions, 
local 
social 
development organizations, 
universities, 
etc. 
have 
been 
consulted 
during 
project 
design 
and 
EA 
preparation. 
- 
20 
- 
Page  25
6.4 
What institutional 
arrangements 
have been 
provided 
to 
ensure 
the 
project 
achieves 
its 
social 
development 
outcomes? 
Participatory 
approach described 
in 
6.2 
above. 
6.5 
How 
will 
the 
project 
monitor 
performance 
in 
terms 
of 
social 
development outcomes? 
Occasional 
surveys 
will 
be 
conducted. 
7. 
Safeguard 
Policies: 
7.2 
Describe provisions 
made 
by 
the 
project to 
ensure 
compliance 
with 
applicable 
safeguard 
policies. 
Assurance 
has 
been obtained 
from 
TMG 
that 
it 
would 
comply 
with 
the 
Environmental 
Assessment, 
Environmental 
Management Programs, Resettlement 
Action 
Plan, 
and 
Resettlement 
Policy 
Framework. 
Satisfactory 
EA 
and 
RAP 
will 
be 
required 
as 
conditions 
of 
disbursement 
for 
components 
for 
which 
detailed 
designs have 
not be 
finalized 
the 
Dagu 
canal 
rehabilitation, 
suburban 
sewerage, 
Dagunanlu 
traffic 
interchange, 
and 
bus 
priority 
corridors. 
All 
contracts 
for 
Dagu 
canal 
rehabilitation 
{dredging, 
disposal, 
and reconstruction) 
will 
be 
subject 
to prior 
review 
by 
the 
Bank. 
While 
no 
cultural 
properties 
to 
be 
affected 
by 
the 
project 
have been 
identified, 
civil 
works 
contracts 
under the 
project 
will 
include 
provisions 
for 
contractors 
to 
follow 
the 
municipality's 
regulations 
regarding 
the 
discovery, 
reporting, 
and 
management 
of 
culturally 
valuable 
items. 
F. 
Sustainability 
and 
Risks 
1. 
Sustainability: 
helping 
to 
protect water 
resources 
in 
the 
metropolitan 
area 
and 
by 
helping 
to 
relieve 
the 
congested 
urban 
streets. 
The 
proposed 
project 
will 
contribute 
to 
the 
sustainability 
of 
Tianjin's 
overall 
development 
by 
This 
will 
depend, 
however, 
upon 
the 
sustainability 
of 
the 
services 
and facilities, 
which 
in 
turn 
depends 
critically upon 
adequate 
financing, 
as 
discussed 
in 
Section E2. 
In 
short, 
the 
large 
and 
rapid 
build 
up 
of 
urban 
wastewater 
management, 
especially 
the 
treatment 
facilities 
financed 
in 
parallel 
to 
the 
project, 
will 
greatly 
increase 
the financing 
needs 
far 
above the 
current 
levels 
of 
hnding 
available 
to 
the 
sector, 
and 
therefore poses 
a large 
risk 
to 
the 
sustainability 
of 
the 
system. 
TMG 
has 
committed 
to raising 
the 
sewerage 
tariffs 
to 
recover 
full 
resource cost 
of 
the 
facilities and 
operation. 
TMG 
also 
took 
a 
major 
-21 
- 
Page  26
step 
to 
put 
the 
wastewater treatment operations 
on 
a 
commercial 
footing 
in 
an 
attempt 
to 
ease 
the 
financing 
constraints, 
but 
it 
is 
not 
clear whether 
it 
would 
achieve 
the 
short-term 
financing 
objectives 
or 
its 
long-term additional 
costs 
would 
be 
sustainable. 
Therefore 
the 
project 
will 
include 
major 
institutional 
and 
financial 
improvement 
actions 
to 
ensure 
efficient 
and 
sustainable 
pricing, 
financing, 
and regulation 
of 
the wastewater 
services. 
S 
M 
M 
M 
M 
S 
In 
the 
case 
of 
the 
urban 
transportation 
system, 
the sustainability 
will 
depend 
mainly 
on 
continued 
development 
of 
measures 
similar 
to 
those 
included 
in 
this 
project 
under 
an 
integrated, 
updated 
plan. 
The 
project 
will 
help 
ensure 
such development 
with 
the 
initiation 
of 
bus 
priority 
measures, 
coordinated 
planning 
of 
the 
components, 
and a support 
for 
the 
development 
of 
an 
institution 
for 
comprehensive 
management 
and planning 
of 
urban 
transportation. 
Requirement 
of 
adequate 
tariff 
and 
management 
structure 
as 
condition 
of 
financing 
Adjustment 
of 
project 
implementation 
schedule 
depending 
upon 
progress 
of 
the 
WTTP 
construction 
Support 
institutional and financial 
strengthening 
Ensure 
quality 
of 
market 
survey, 
obtain 
commitment 
from 
potential 
users, 
and 
ensure 
quality 
of 
design 
and 
operation 
Establish 
inflow 
monitoring 
and 
control 
regime 
Action 
Plan 
for 
improved 
sector management 
2. 
Critical 
Risks 
(reflecting 
the 
failure 
of 
critical 
assumptions 
found 
in 
the 
fourth column 
of 
Annex 
1): 
S 
Risk 
From 
Outputs 
to 
Objective 
Suburban 
towns 
may not 
be 
able 
to 
develop 
financial 
and technical 
capacity 
to 
maintain and 
expand the 
sewerage 
management system 
Tianjin 
WWTPs 
financed 
by 
other 
aid 
agencies 
may 
not 
be 
built 
or 
operated 
as 
planned 
Sewers 
and Shuanglin 
WWTP 
may 
not 
be 
operated 
properly 
for 
lack 
of 
financial 
or 
technical capacity 
Reclaimed 
water 
may 
not 
reach sufficien. 
quality 
or may not 
find 
sufficient 
demanc 
Rehabilitated 
Dagu 
canal 
may 
be 
re-contaminated 
Road 
capacity 
may 
be overwhelmed 
by 
growing 
traffic, 
negating the 
traffic 
improvement 
measures 
There 
may 
be 
insufficient 
regulatory and 
planning 
capacity 
to 
ensure 
efficient 
market-based 
sewerage 
operations 
It 
may 
be 
difficult 
to 
modify 
the 
existing 
WWTP 
commercialization 
arrangements 
to 
eliminate 
all 
deficiencies 
immediately 
From Components 
to 
Outputs 
Sewers 
and 
drains 
may not 
be 
built 
soundly 
or 
within 
time 
and 
budget 
Sector 
reform 
may 
be 
difficult to 
design 
or 
be 
agreed upon. 
WWTP 
effluent 
may 
not 
be 
reclaimed 
properly 
for 
acceptable reuse 
Dagu 
canal 
sediment 
may 
not 
be properly 
Action 
Plan 
could 
include 
a longer-term 
program 
for 
gradual 
improvement 
of 
service 
arrangements 
Risk 
Ratina 
I 
Risk 
Mitiaation 
Measure 
M 
S 
M 
M 
Ensure 
quality 
of 
design, procurement, 
and 
supervision 
Careful 
design 
of 
the 
study, 
and 
close 
consultation 
to 
maintain 
commitment 
Select 
robust 
process 
alternative 
Thorough 
analysis, 
detailed 
design 
and 
S 
Action 
Plan 
to 
strengthen sector 
institutions 
and 
finances, 
and 
covenant 
key 
actions 
- 
22 
- 
Page  27
treated 
or 
disposed 
of 
M 
M 
Suburban 
Districts may not be 
able 
to 
develop the 
wastewater management 
plar 
and 
necessary 
financial 
and 
institutional 
arrangements 
to 
participate 
in 
and 
implement the 
project 
Weak 
traffic 
management 
or 
congestion 
in 
connected roads 
may 
reduce the 
effect 
of 
road 
modification 
and 
bus 
priority 
measures 
implementation 
of 
EMP 
and 
remediation 
measures 
Identify 
a number 
of 
potential 
participants and 
help 
develop 
necessary 
plans 
and 
financial 
and 
operational 
arrangements; 
Mobilize 
technical 
and 
financial 
supports 
to 
develop the 
plans 
and 
implement them 
Closely 
involve 
traffic 
management department 
in 
design 
of 
the 
measures, 
and 
obtain 
its 
commitment 
for 
implementation 
of 
necessary 
measures 
Overall 
Risk 
Rating 
S 
3. 
Possible 
Controversial 
Aspects: 
G. 
Main 
Loan 
Conditions 
1. 
Effectiveness 
Condition 
TMG 
to 
engage 
qualified 
consultants 
to 
conduct a 
Sewerage 
Sector 
Study 
according 
to 
terms 
of 
reference 
satisfactory 
to 
the 
Bank. 
2. 
Other 
[classify according 
to 
covenant types 
used 
in 
the 
Legal 
Agreements.] 
Conditions 
of 
Disbursement 
A. 
Conditions 
of 
Disbursement 
for 
Dam 
Canal 
Rehabilitation 
Component. 
TMG 
to 
establish a 
detailed Environmental 
Management 
Plan 
for 
Dagu 
Canal 
sediment 
remediation, satisfactory 
to 
the 
Bank, 
specifylng 
procedures for 
detailed 
sediment characterization, 
choice 
and 
design 
of 
remediation 
works, 
and 
design 
framework 
for hazardous 
landfills. 
B. 
Conditions of 
Disbursement 
for 
Suburban 
Sewerage 
Component: 
b 
A 
satisfactory 
feasibility 
study 
including: 
0 
0 
o 
plans 
Written 
undertaking 
by 
service users 
(District 
govenunents 
andor 
industries) 
to 
pay required 
fees, 
in 
the 
case 
the 
District 
government 
is 
not 
the 
project 
implementing 
agency. 
Subproject 
management 
office 
with 
adequate 
staffing, 
and 
the 
standard 
financial 
management 
and 
reporting 
systems. 
a sound 
financial 
analysis 
and 
projection, 
a 
realistic 
plan 
to 
recover 
the 
costs 
institutional 
arrangements 
including 
staff training 
and 
other 
organizational 
development 
b 
Satisfactory 
EA 
and 
RAP 
e 
b 
C. 
Conditions 
of 
Disbursement 
for 
Dagunanlu 
Interchange: 
Engineering 
design 
of 
the interchange based 
on 
a 
feasibility 
study 
agreed 
with 
the 
Bank, 
which 
will, 
among others, 
allow 
efficient  flow  of 
all 
modes 
of 
traffic 
and 
minimize 
the 
disturbance 
in 
-23- 
Page  28
the 
area 
around 
the 
junction. 
e 
Satisfactory 
EA 
and 
RAP. 
D. 
Conditions 
of 
Disbursement 
for 
Bus 
Priority 
Corridors: 
e 
e 
Satisfactory 
EA 
and 
RAP. 
Engineering 
design 
and 
traffic 
management measures 
of 
selected corridors, based 
on 
a 
feasibility 
study 
agreed 
with 
the 
Bank, 
and that 
will 
allow 
buses 
predominant 
access. 
Action 
Plans 
A. 
Financial 
TMG 
will 
raise 
sewerage 
tariffs 
gradually 
to 
a 
level 
sufficient 
to 
cover 
operating, maintenance, 
depreciation 
costs 
of 
all 
sewerage 
sector 
assets 
starting 
from 
January 
1,2006 
or 
earlier. 
TMG 
will 
provide 
the 
Bank 
with 
audit report 
by 
Tianjin 
Municipal 
Audit 
Bureau 
of 
the 
Project 
Accounts, 
and 
the 
Financial 
Statements 
of 
Tianjin 
Drainage Company and ChuangYe 
Environmental 
Protection 
Company, 
any 
other 
sewerage 
operating 
company, 
by 
June 
30 
of 
each 
year, 
starting 
from 
June 
30,2004. 
B. 
Sewerage 
Sector 
Institutional 
Development 
Action 
Plan 
TMG 
shall 
carry 
out 
the 
following: 
1. 
organization, 
financing, and 
regulation 
of 
sewerage 
services 
and their 
commercialization, 
and their 
linkages 
with 
urban 
water 
supply 
and 
water 
reuse. 
By 
June 
30,2004  complete a 
“Sewerage 
Sector 
Study” 
to 
review 
and recommend 
options 
for 
2. 
Based 
on 
the 
findings 
and 
recommendations 
of 
the 
“Sewerage 
Sector 
Study,” 
the 
Tianjin 
Municipal 
Government 
will 
establish 
an 
Action 
Plan 
for 
Sewerage Sector 
Reform 
by 
December 
3 
1,2004 
in 
consultation 
with 
relevant parties 
including 
the 
World 
Bank. 
3. 
with 
the 
Bank, the 
Actions 
would 
include 
the 
following: 
Carry out 
the 
Action 
Plan 
thereafter. 
Unless 
recommended otherwise 
by 
the Study 
and 
agreed 
a. 
Establish 
by 
June 
30,2005 
an 
Office 
with 
sufficient  authority, staffing, 
budget, 
and 
consultant 
assistance 
to 
carry out regulation 
and other necessary 
functions 
to 
manage 
the 
sector. 
b. 
By 
June 
30,2006 
enter 
into 
a 
revised 
contract 
with 
TDC, clearly defining 
its 
responsibility, 
authority, 
and 
payment 
to 
cover operating and 
capital 
renewal 
expenses, 
for 
autonomous 
operation. 
c. 
Review 
and revise 
the service contract 
with 
wastewater treatment 
plant 
operators 
so 
as 
to 
ensure 
the 
efficiency 
and 
sustainability 
of 
such 
services; 
d. 
By 
December 
3 
1,2006,  transfer 
the 
management 
responsibility 
or 
assets 
of 
wastewater treatment 
plants 
owned 
by 
TMG 
to 
entities 
selected 
through 
a 
competitive 
process, 
satisfactory 
to 
the 
Bank. 
e. 
Cause 
the 
said 
Office 
and 
operating 
entities 
to 
carry out 
studies 
and 
training to 
develop 
institutional 
capacity 
with 
assistance 
of 
qualified 
consultants 
and 
on 
terms 
of 
reference 
satisfactory 
to 
the 
Bank. 
C. 
Transportation 
Sector 
Institutional 
Development 
Action 
Plan 
TMG 
will 
carry out 
the 
following: 
- 
24 
- 
Page  29
1. 
qualified 
consultants 
and 
according 
to 
the 
terms 
of 
reference 
satisfactory 
to 
the Bank, 
under 
the 
guidance 
of 
a 
task 
force consisting 
of 
representatives 
of 
authorities responsible 
for 
urban 
planning, 
road 
construction, 
traffic 
management, 
and 
public 
transportation. 
By 
June 
30,2005 
complete 
an 
Urban 
Transportation 
Management 
Study 
with 
the 
assistance 
of 
2. 
Based 
on 
the 
findings 
and 
recommendations 
of 
the 
“Urban 
Transportation Management 
Study,” 
the 
Tianjin 
Municipal 
Government 
will 
establish 
formal 
organizational 
arrangements 
and 
procedures 
to 
improve 
and sustain 
coordination 
of 
all 
activities 
of 
planning 
and managing 
urban 
transportation 
in 
Tianjin, 
in 
consultation 
with 
relevant 
parties 
including 
the 
World 
Bank 
by 
December 
3 
1,2005 
and 
put 
them 
into 
effect 
starting 
from 
January 1,2006. 
D. 
Project 
Management 
1. 
managers 
of 
related 
municipal 
commissions 
and 
bureaus 
to 
provide 
supervision, decisions 
and 
guidance 
on 
behalf 
of 
TMG 
for 
the 
project 
implementation. 
Maintain 
a 
Project 
Leading 
Group, 
chaired 
by 
a 
Vice Mayor 
of 
TMG 
and consisting 
of 
senior 
2. 
to 
carry 
out, 
coordinate, 
or 
supervise 
all 
project 
activities, 
including 
the procurement, 
financial 
management, 
resettlement, 
environmental impact mitigation, and 
progress 
reporting. 
Maintain 
a 
Project 
Management 
Office 
with 
sufficient 
authority, staffing, 
facilities, 
and 
budget 
3. 
and 
budget 
to 
carry 
out, coordinate, 
or 
supervise 
all 
activities 
for 
the 
component 
implementation, 
including 
the procurement, 
financial 
management, 
resettlement, 
environmental 
impact mitigation, and 
progress 
reporting. 
Maintain 
a Subproject 
Office 
under 
each 
implementing 
agency 
with 
sufficient 
staffing, facilities, 
4. 
format 
satisfactory 
to 
the 
Bank, 
on 
February 
15 
and 
August 
15 
of 
each 
year, 
starting 
from 
February 
15, 
2004 
until 
the 
project 
completion. 
The Project 
Management 
Office 
will 
provide 
the 
Bank 
with 
implementation 
progress reports, 
in 
a 
5. 
months after 
the 
closing 
of 
the 
loan 
account. 
TMG 
will 
submit 
to 
the 
Bank 
a 
project implementation completion report 
no 
later 
than 
three 
H. 
Readiness 
for 
Implementation 
7 
I 
1. 
a) 
The 
engineering 
design 
documents 
for 
the 
first 
year‘s 
activities 
are 
complete 
and ready 
for 
the 
- 
start 
of 
project 
implementation. 
1 
1. 
b) 
Not 
applicable. 
E 
2. 
The 
procurement 
documents 
for 
the 
first 
year’s 
activities 
are 
complete and ready 
for 
the 
start 
of 
- 
project 
implementation. 
- 
3. 
The Project 
Implementation 
Plan 
has 
been 
appraised 
and 
found 
to 
be realistic and 
of 
satisfactory 
5 
4. 
The 
following 
items 
are 
lacking 
and 
are 
discussed 
under 
loan 
conditions 
(Section 
G): 
quality. 
A 
detailed 
plan 
and 
protocol 
for 
Dagu 
canal 
sediment 
remediation, satisfactory 
to 
the 
Bank, 
would 
be 
required 
as 
a 
condition 
of 
disbursement, 
as 
the 
implementation 
of 
the component 
would 
not 
start 
until 
2005; 
- 
25 
- 
Page  30
Firm 
identification 
and design 
of 
the 
suburban 
wastewater 
management systems, 
along 
with 
satisfactory 
financing 
and 
institutional 
development 
plans, 
EA, 
and 
RAP 
will 
be 
required 
as 
conditions 
of 
disbursement; 
Designs 
of 
bus 
priority 
comdors 
and the 
Dagunanlu 
interchange 
will 
be 
improved 
with 
consultant 
assistance and 
revised 
EA 
and 
RAP 
prepared 
as 
conditions 
of 
disbursement. 
I. 
Compliance 
with 
Bank 
Policies 
1. 
This 
project 
complies 
with 
all 
applicable 
Bank 
policies. 
i? 
2, 
The 
following 
exceptions 
to 
Bank 
policies 
are 
recommended 
for 
approval. 
The 
project 
complies 
with 
all 
other applicable 
Bank 
policies. 
Team 
Leader 
Country 
ManagerIDirector 
- 
26 
- 
Page  31
Annex 
1 
: 
Project Design Summary 
CHINA: 
Second 
Tianjin 
Urban Development and Environment 
Project 
sector-related 
CAS 
Goal: 
hengthen 
environmental 
jrotection 
and 
natural 
'esource 
management 
mprove urban 
management 
id 
public 
service 
provision 
'roject 
Development 
3bjective: 
mprove 
sustainability, 
:fficiency and 
equity 
of 
rianjin 
sewerage 
and 
urban 
ransportation: 
Improve 
coverage 
and 
efficacy 
of 
sewerage 
Improve efficiency 
and 
sustainability 
of 
drainage 
and 
sewerage 
Pilot 
urban 
and 
rural 
reuse 
of 
treated 
wastewater 
existing 
roads 
a 
Improve 
capacity of 
Facilitate 
bus 
services 
and 
increased the 
modal 
share 
in 
Tianjin city 
urban 
transport 
institutions 
Develop 
sewerage 
and 
Sector Indicators: 
Urban 
water and 
air quality 
indicators 
Growth 
of 
urban 
economies 
and 
coverage 
and 
efficiency 
of 
infrastructure and 
services 
Outcome 
I 
Impact 
Indicators: 
Area and 
population 
served, 
oi 
sewerage; 
Water 
quality 
at streams 
and 
Bohai 
Bay; 
Duration 
and 
extent 
of 
flooding 
Volume and 
unit 
cost 
of 
wastewater 
collection 
and 
treatment; 
tariff 
revenues; 
autonomy and finance 
of 
operating 
companies; 
asset 
quality 
Volume 
of 
effluents used 
for 
urban 
and 
farming 
purposes 
Speed 
of 
buses 
and 
other 
vehicles 
at 
sample 
points 
Share 
of 
passenger 
trips 
on 
buses 
(12% 
of 
passenger 
trips 
3y2010) 
regulation 
and 
autonomy 
of 
sewerage 
operations; 
iuality 
of 
transportation 
plans 
md 
operations 
Coll 
Sector1 
country 
reports: 
National 
and 
local 
statistics 
of 
air and 
water 
pollution 
Statistical reports 
and 
occasional 
sector 
reviews 
Project reports: 
operational and 
monitoring 
reports 
of 
sewerage 
and 
treatment 
companies; 
environmental 
monitoring 
reports 
operating and financial reports 
of 
sewerage entities; 
govemment 
monitoring 
reports 
operational and 
monitoring 
reports 
monitoring 
reports 
of 
road 
traffic 
and 
bus operations 
bus 
operations reports 
and 
traffic 
surveys 
Sector 
operations reports 
and 
plans 
Critical 
Assumptions 
(from Goal 
to 
Bank 
Mission) 
Continued 
economic 
growth 
and 
urbanization 
Continued 
economic 
growth 
and urbanization 
(from Objective 
to 
Goal) 
Industrial 
pollution 
discharge 
is 
controlled and 
sewer 
connections 
are 
made 
Maintenance 
and improvement 
of 
sector 
regulations 
and 
performance incentives 
Demand 
continues 
for 
the 
effluent 
reuse, 
with 
sufficient 
water 
pricing 
Adaptation 
of 
transportation 
system 
to 
urban 
development; 
traffic 
demand 
control; 
proper 
road 
maintenance 
bus services 
continue 
to 
improve and 
expand 
Political 
commitment 
to 
implement action 
plans 
- 
27 
- 
Page  32
Storm 
water 
drained 
and 
waste 
water delivered 
to 
treatment 
Wastewater 
in 
the 
South 
Suburb 
area 
treated (Shuanglir 
Wastewater 
reclaimed 
and 
distributed 
for 
urban 
uses 
Water 
flow 
in 
Dagu 
canal at 
adequate 
volume 
and 
quality 
Water 
pollution 
reduced 
in 
selected 
suburban 
areas 
Increased 
traffic 
volume 
and 
speed at 
18 
key 
road 
sections 
Area 
traffic 
control, and 
reduced 
congestion 
and 
accidents 
at 
road junctions 
Reduced travel time 
for 
buses 
Improved 
information 
for 
infrastructure 
management 
Improved 
sewerage 
finances 
and 
management structure 
Improved 
structure 
for 
planning 
and 
managing 
urban 
I 
Output 
Indicators: 
Area drained; 
Wastewater 
volume delivered 
to 
treatment 
plants; 
number 
of 
beneficiaries 
200,000 
m3lday 
of 
wastewater 
treated 
About 
25,000 
m3lday 
reused 
water 
quality 
indicators 
at 
several 
points 
about 
150,000 
m3lday 
of 
wastewater 
treated 
in 
suburbs 
[ncreases 
in 
traffic 
volume 
:+lo%) 
and 
speed 
(+) 
.educed 
times 
to 
cross sample 
unctions 
(-l5%), 
and 
iccidents 
ncreased 
travel 
speed 
on 
bus 
:orridors 
and 
selected 
bus 
.outes 
isage 
of 
the 
information 
;ystem 
'mances, 
performance, 
and 
:fficiency 
of 
operating 
:ompanies 
:oordination 
and 
integration 
of 
rarious 
sector concerns 
in 
ilans, 
projects and 
regulations 
Flood 
protection 
and 
Treatment 
plants (financed 
by 
report 
operations 
report 
monitoring 
reports 
operation 
and 
monitoring 
reports 
traffic reports 
traffic reports 
traffic 
and bus operation 
reports 
usage 
counts 
annual reports, 
sector 
regulations and 
plans 
sector 
regulations, 
network 
plans, 
and 
project 
plans 
sufficient 
inflow, 
funds, 
and 
technical manpower 
The 
reclaimed 
water 
is 
of 
sufficient quality 
and 
in 
sufficient 
demand 
Proper operation 
of 
WWTPs 
discharging 
into 
Dagu, 
and 
interception 
of 
contaminated 
wastewater 
from 
it. 
Improved 
financial 
and 
institutional 
capacity 
to 
sustain 
and 
expand 
sewerage 
Adequate 
capacity 
in 
connected 
road 
segments; 
traffic 
demand 
control 
Adequate 
road 
capacity and 
traffic 
demand 
control 
Continued improvement and 
expansion 
of 
bus 
services 
Improvements 
in 
related 
procedures, 
including 
disclosure 
rules; 
updating 
of 
information 
Strengthening 
of 
sector 
regulation 
and 
operational 
capacities 
of 
new 
entities 
Maintaining 
incentives and 
mandates 
for 
coordination 
- 
28 
- 
Page  33
- 
Droject 
Components 
I 
iub-components: 
Jrban 
sewers 
and 
drains 
ihuanglin 
Wastewater 
-reatment 
Plant 
Yastewater 
Reuse 
)agu Canal 
Rehabilitation 
luburban 
Sewerage 
Jrban Roads: 
modification 
of 
:ey 
junctions 
and sections 
-raffic 
Signal 
Control 
System 
nd 
Channelization 
ius 
Priority 
Corridors 
nstitutional Development 
0 
Sewerage 
sector 
institutions and 
finance 
0 
Urban 
Transportation 
Management 
and 
Planning 
0 
Bus 
route restructuring 
and 
priority 
measures 
e 
Infrastructure 
information 
systems 
Key Performance 
Data Collection Strategy 
Indicators 
nputs:  (budget for each 
Project reports: 
:omponent) 
I 
578 
million. 
650 
M 
617 
M 
655 
M 
;43 
M 
;62 
M 
;4 
M 
i15 
M 
;5 
M 
progress 
reports 
progress 
reports 
progress 
reports 
progress 
reports 
irogress 
reports 
irogress 
reports 
progress 
and 
system 
development reports 
progress 
and 
monitoring 
reports 
progress 
and 
consultant 
reports; 
Action 
Plans 
(from Components 
to 
Outputs) 
Sound 
construction 
of 
sewers 
an 
pumps 
Suffkient 
wastewater 
generation 
in 
the 
area, 
and 
sufficient operating 
funds 
Adequate 
qualities 
of 
WWTP 
effluent and 
the 
reclaimed 
water 
Contaminated 
sediment 
properly 
treated 
Sewers 
and plants suit 
the 
wastewater generated 
and 
the 
financial 
and 
operating 
capacities 
Implementation 
of 
traffic 
management; adequate 
capacity 
in 
connected 
road 
segments 
Proper adaptation and 
operation 
of 
the 
traffic 
signals; 
complementary 
traffic 
management measures 
Enforcement 
of 
exclusive 
rights 
of 
way 
for 
buses 
Participation 
in 
and 
use 
of 
studies 
by 
key 
managers 
Participation 
in 
and 
use 
of 
studies 
by 
key 
managers 
Physical investments 
to 
implement 
the measures 
Related 
rules 
of 
disclosure and 
usage 
established; 
Adquate 
data 
input 
-29- 
Page  34
Annex 
2: 
Detailed Project 
Description 
CHINA 
Second 
Tianjin 
Urban Development 
and 
Environment Project 
The 
Second 
Tianjin 
Urban 
Development and 
Environment Project 
(TUDEP), 
to 
be 
partially 
financed 
by 
the 
World 
Bank, 
consists 
of 
environmental 
(wastewater management) 
and 
urban 
transport 
components. 
All 
project 
components 
are 
located 
within 
the 
Tianjin 
Municipality. 
Tianjin, 
one 
of 
the 
four 
provincial-level 
municipalities 
in 
the 
People's 
Republic 
of 
China 
(PRC), 
is 
the 
most important 
industrial 
and transportation 
hub 
in 
north 
China 
and 
the 
gateway 
to 
nation's 
capital 
Beijing. 
It 
consists 
of 
18 
Districts 
and Counties, 
with 
the 
total 
area 
of 
the 
municipality 
is 
11,920 
km2. 
The 
city 
of 
Tianjin 
(city 
'proper') consists 
of 
6 
Districts 
occupying 
about 
250 
km2. 
The 
total 
permanent 
population 
is 
about 
10.5 
million 
at 
present, 
of 
which 
approximately 
4 
million 
live 
in 
Tianjin 
City. 
By 
Component: 
Project 
Component 
1 
- 
US$77.60 
million 
Stormwater 
and 
Wastewater Collection 
Networks 
in 
Tianjin 
City. 
The 
city 
of 
Tianjin 
is 
served 
by 
a 
mixture 
of 
storm-water, wastewater, 
and combined 
sewers. 
Most 
of 
the properties 
are 
serviced 
by 
septic 
tanks 
within 
development blocks, 
most 
of 
which 
are 
connected 
to 
the 
municipal 
sewerage 
network. 
The 
septic 
tanks 
and 
tertiary 
sewers 
are 
built 
and 
maintained 
by 
the developer 
or 
neighborhood 
committee 
of 
the 
block. 
The 
District 
governments operate 
and 
maintain 
the secondary storm-water 
and 
wastewater 
network 
and 
the 
Tianjin 
Drainage Company (TDC) 
operates 
and maintains 
the 
primary 
(trunk) 
storm-water 
and 
wastewater 
networks 
within 
the 
urban 
area. 
There 
are 
currently 
two 
wastewater 
treatment 
plants 
(WWTPs), 
of 
which 
one 
is 
being 
expanded, 
and 
three 
more 
are 
planned. 
Tianjin 
is 
currently 
in 
the 
process 
of 
completing 
its 
drainage 
network, 
and 
separating 
stormwater 
and 
wastewater 
networks. 
The 
project 
will 
finance stormwater 
and 
wastewater 
networks, 
including 
pump 
stations, 
in 
three 
areas 
across 
the 
city: 
Fukangnanlu, 
Beicang, and 
Nanjiaowai. 
In 
total, 
the 
project 
will 
finance 89 
km 
of 
stormwater 
mains, 
50 
km 
of 
wastewater mains, 
and 
7 
pump 
stations. 
The 
main 
objective 
is 
to 
reduce the 
damage 
from 
storm 
water and 
from 
environmental 
pollution 
in 
an 
efficient 
manner 
by: 
e 
e 
e 
Expanding 
the 
coverage 
and 
increasing 
the 
capacity of the 
sewers 
especially 
in 
areas 
currently 
not 
served, 
as 
well 
as 
areas 
with 
increasing 
development 
and 
population; 
By 
separating 
the 
combined 
sewers 
into 
storm 
and 
wastewater 
sewers 
that 
will 
reduce the 
polluted 
run-offs 
during 
storms, 
and 
reduce 
the 
volume 
of 
sewage 
to 
be 
treated; 
and 
Installing 
the 
trunk 
mains 
to 
bring 
sewage 
to 
the 
WWTPs. 
Fukangnanlu 
is 
the 
new 
center 
for 
culture, 
education, sports 
and recreation 
in 
Tianjin. 
Residential 
development 
is 
very 
extensive 
and 
growing 
quickly. 
Wastewater 
collected 
in 
the 
area 
will 
be 
treated 
at 
the JBIC-financed 
450,000 
m3/day 
Xianyanglu 
WWTP. 
The 
project 
will 
finance 
storm 
water 
drains 
(about 
13.4 
km), 
wastewater 
sewers 
(about 
14.5 
km), 
and 
three 
pump 
stations 
to 
add approximately 
275 
ha 
to 
the 
current 
service 
area 
of 
about 
1,200 
ha. 
The 
Beicang 
area 
is 
undergoing 
rapid 
development, 
and 
consists 
of 
low-income residential 
areas, 
industrial 
development, 
farmland, 
and 
wasteland. 
The 
project 
will 
finance about 25 
km 
of 
storm 
drains, 
22 
km 
of 
sanitary 
sewers, 
and 
four 
pump 
stations 
to 
service 
an 
service 
area 
of 
about 
750 
ha 
to 
increase 
the 
service 
area 
to 
about 
2,200 
ha.  Wastewater 
collected 
in 
the 
area 
will 
be 
brought 
to 
the 
ADB-financed 
100,000 
m3iday Beicang 
WWTP. 
- 
30 
- 
Page  35
The 
Nanjiaowai 
area 
consists 
mainly 
industrial 
areas 
with 
scattered 
low-income residential 
areas. 
The 
project 
will 
finance 
about 
15 
km 
of 
sanitary 
sewers 
and 
16 
km 
of 
storm 
sewers 
to 
serve about 235 
ha, 
to 
bring 
wastewater 
to 
the 
200,000 
m3lday 
Shuanglin 
WWTP 
which 
will 
also 
be financed 
under 
the 
project. 
BOD 
COD 
ss 
NH3-N 
TP 
Project Component 
2 
- 
US$55.35 
million 
Shuanglin Wastewater 
Treatment Plant. 
There 
are 
two 
wastewater 
treatment 
plants 
(WTP) 
in 
operation 
in 
Tianjin 
with 
a 
total 
capacity 
of 
660,000 
&/day: 
Jizhuangzi 
WWTP, 
built 
in 
1984, 
has 
a 
capacity 
of 
260,000 
m3lday 
and 
serves 
the 
area 
to 
the south 
of 
the 
Hai 
River; 
Dongjiao 
has a 
capacity 
of 
400,000 
m3lday 
and 
serves 
the 
area 
to 
the 
north 
and 
east 
of 
the 
Hai 
River. 
Three 
WWTPs 
are 
under 
construction: 
an 
extension 
to 
the Jizhuangzi 
to 
provide 
an 
additional 
280,000 
m3lday, 
financed 
by 
JBIC 
and 
expected 
to 
be 
in 
operation 
by 
early 
2005; 
a 
new 
WWTP 
at 
Xianyanglu 
to 
serve 
the western 
area 
with 
a 
treatment capacity 
of 
450,000 
m3lday, 
also 
financed 
with 
JBIC 
to 
start 
operation 
by 
2005; 
and 
WWTP 
at 
Beicang 
being 
funded 
by 
the 
Asian 
Development 
Bank, 
to 
serve 
the 
norther 
part 
of 
the 
city 
and 
will 
have a 
capacity 
of 
100,000 
m3lday 
from 
about 2006. 
The 
World 
Bank 
will 
finance the 
construction 
of 
the 
Shuanglin 
WWTP, which 
will 
be 
the 
fifth 
and 
final 
plant 
for 
the 
city 
of 
Tianjin. 
By 
2008, 
the 
total 
treatment 
capacity 
in 
Tianjin 
will 
have 
more 
than 
doubled 
from 
the 
current 
660,000 
m3lday to 
1,490,000 
m3/day, 
to 
treat 
85% 
of 
the 
total 
wastewater discharged. 
Concentration 
Consent 
160 
mgil 
< 
30 
mgll 
< 
30 
mgll 
430 
mgil 
< 
120 
mgil 
< 
120 
mgil 
280 
mgil 
< 
30 
mgll 
< 
30 
mgil 
3.5 
mdl 
< 
1 
mdl 
NIA 
- 
< 
25 
mgll 
N/A 
The 
initial 
design capacity 
of 
the 
Shuanglin 
WWTP 
is 
200,000 
m31d, 
rising 
to 
300,000 
m3/d 
in 
2020. 
The 
design 
influent 
and 
effluent 
values 
are 
given 
as: 
I 
Parameter 
j 
Influent 
I 
BNR 
Consent 
I 
Conventional 
Since 
Tianjin 
discharges wastewater 
to 
the 
Bohai 
Sea, 
the 
Chinese discharge standards 
require 
nutrient 
removal, 
hence 
the 
“BNR” 
level 
consent. 
To 
achieve the 
BNR 
consent, 
the 
plant 
will 
require 
primary 
sedimentation, a secondary 
tank 
with 
an 
anaerobic 
zone 
and 
an 
aeration 
zone (the so-called 
AI0 
process), 
followed 
by 
final clarifiers. 
All 
new 
WWTPs 
in 
Tianjin 
will 
utilize 
the 
NO 
process, 
which 
is 
also 
highly 
recommended 
by 
the 
Chinese 
Ministry 
of 
Construction 
as 
the 
preferred 
option 
for 
nutrient 
removal. 
Sludge 
from 
the 
plant 
will 
be 
treated 
by 
thickening 
with 
chemical conditioning, mesophilic 
anerobic 
digestion 
with 
biogas 
for 
power 
generation, 
followed 
by 
belt-filter 
press. 
The 
sludge cake 
will 
be 
disposed 
of 
in 
a 
nearby 
landfill. 
Project 
Component 
3 
- 
US$16.65 
million 
Urban 
Wastewater 
Reuse 
(Reclaimed 
Water). 
Tianjin 
is 
located 
in 
an 
arid 
region 
and 
is 
constantly 
under 
water 
stress, 
experiencing 
frequent 
and 
severe 
droughts. 
The major 
water 
source 
for 
the 
Municipality 
is 
the 
Luan 
River 
Diversion 
to 
the 
north 
in 
Hebei 
province, 
but 
this 
source 
is 
susceptible 
to 
frequent droughts, 
forcing costly 
water 
diversion 
from 
the 
Yellow 
River. 
The situation 
in 
Tianjin 
is 
one 
of 
the 
primary motivation 
for 
the 
“South-North 
Water 
Transfer 
Scheme” 
to 
divert 
water 
from 
Yangtze 
River 
to 
the 
northern 
China. 
The 
Chinese government, and 
particularly 
Tianjin 
government, have 
given 
a 
high 
priority 
to 
water 
conservation 
and 
water 
reuse. 
Water 
consumers 
in 
Tianjin 
already 
pay 
among 
the 
highest 
tariffs 
in 
China 
and 
are 
limited 
to 
a 
certain 
quota 
of 
water 
(8 
m3 
per 
month 
per 
household), 
with 
extremely 
high 
tariffs 
for 
amounts 
over 
the 
quota. 
There 
is 
thus 
a 
strong 
demand 
for 
high-quality 
reclaimed 
water 
in 
Tianjin. 
-31 
- 
Page  36
Tianjin 
has 
taken 
the 
lead 
among Chinese 
cities 
in 
developing water 
reuse 
facilities 
and 
plans 
to reclaim 
approximately 
10% 
of 
the 
total 
wastewater 
effluent 
for 
urban 
reuse. 
It 
is 
planned 
that 
each 
WWTP 
will 
have a 
water reuse 
plant. 
The 
TMG 
has 
establish 
a 
Water 
Recycling 
Company 
to 
take the 
lead 
on 
water 
reuse 
in 
the 
city, 
The 
Company 
is 
currently 
overseeing 
the 
construction 
of 
the Jizhuangzi 
Water 
Reuse 
Scheme (50,000  m3/d), 
a 
national 
pilot 
with 
central 
and 
local 
government 
subsidies, 
which 
is 
programmed 
to 
begin 
operations 
in 
2003. 
A 
part 
of 
the 
reclaimed 
water 
will 
be used 
for 
residential 
(toilet 
flushing) 
purposes 
in 
a 
new 
residential complex 
with 
the dedicated special 
distribution 
network. 
The 
Company 
is 
also 
constructing 
a 
scheme 
associated 
with 
Xianyanglu 
(25,000 
did), 
which 
will 
finish 
in 
2003 
or 
2004. 
Under 
the 
project 
the 
Bank 
will 
to 
finance 
two 
attached 
with 
the 
Dongjiao 
and 
Shuanglin 
scheme 
WWTPs. 
Since the technological 
pilot 
is 
established 
in 
the 
Jizhuangzi and 
Xianyanglu 
schemes, 
the 
two 
Bank-financed 
schemes are 
subject 
to 
criteria 
of 
sound 
economic 
and 
financial 
feasibility. 
These 
criteria 
indicate 
weak 
feasibility 
of 
residential 
water 
use, 
given 
the 
current 
differential 
water 
tariff 
system 
that 
favors 
residential 
use, 
the 
cost 
for 
extra 
distribution 
system, 
and the 
high 
public 
health 
risks. 
The 
Dongjiao 
scheme 
(Phase 
JJ 
will 
reclaim 
about 
12,500 
dlday 
of 
the 
effluent 
from 
the 
Dongjiao 
WWTP 
using 
a process 
consisting 
of 
sedimentation, 
micro-filtration, 
and 
chlorination, 
and 
then 
distribute 
the 
water 
to 
a 
nearby 
industrial 
estate 
and 
nurseries 
through 
a dedicated 
reclaimed 
pressurized water 
distribution 
system. 
The reclaimed 
water 
will 
also 
be 
used 
for 
landscape 
irrigation and 
road 
washing. 
The 
treatment process 
selected, 
if 
properly 
operated, 
should provide 
high 
quality effluent 
and 
not 
be 
a 
public 
health 
concern. 
Also, 
with 
capital 
investment 
subsidy 
from 
the government, 
the 
scheme 
would 
be 
able 
to 
be 
financially 
feasible. 
The 
process 
and distribution 
details 
of 
the 
Shuanglin 
scheme 
have 
not 
yet been 
finalized 
yet, 
as 
the 
Shuanglin 
plant 
is 
located 
in 
a 
rapidly 
growing industrial 
and 
residential 
area 
and 
comprehensive market 
survey 
had 
not 
yet 
been 
undertaken. 
In 
the future, 
if 
the 
residential 
use 
under 
the 
Jizhuangzi 
pilot 
is 
successfid, 
the 
Water 
Recycling 
Company plans 
to 
consider 
residential 
reuse 
for 
the 
Shuanglin 
and 
Dongjiao 
schemes 
also.  Comprehensive 
guidelines 
for 
public 
heath 
safety 
and 
tariffs 
for 
reclaimed 
water 
are 
being 
drafted 
by 
the 
TMG. 
Project 
Component 
4 
- 
LIS$55.15 
million 
Dagu 
Sewage 
Canal 
Rehabilitation. 
The 
Dagu 
Canal 
was 
constructed 
in 
1958 
as 
part 
of 
the 
drainage 
plan 
for 
the 
City 
of 
Tianjin, 
and 
is 
the 
main 
sewage 
canal serving the 
southern 
part 
of 
Tianjin 
City. 
The 
canal 
is 
approximately 
75 
km 
long 
and currently 
receives 
industrial 
and 
municipal 
wastewater 
discharges, 
raw 
sewage, 
agricultural 
runoff, 
pulp 
mill 
effluent 
and 
general 
municipal 
waste. 
The 
canal 
is 
used 
to 
drain rainwater 
from 
the surrounding 
areas 
and 
farmers use 
it 
for 
irrigation 
purposes. 
The 
canal 
has 
a 
very 
low 
hydraulic 
head (approximately 
0.75 
m 
fall 
from 
the headwaters 
to 
the 
discharge 
at 
the 
sea). 
Consequently 
the natural 
discharge 
in 
the canal 
is 
extremely 
low 
and 
three 
pumping 
stations have 
been 
constructed 
along 
the 
length 
of the canal 
to 
assist 
in 
discharging the 
water, 
The 
Canal 
is 
currently 
silted 
up 
with 
partially 
contaminated 
sediment, 
which 
causes 
frequent 
flooding. 
The 
last 
major 
maintenance 
was 
performed 
in 
1965 
when 
parts 
of 
it 
were 
dredged. 
After 
Tianjin’s 
sewerage 
capital 
investment 
program 
is 
completed 
in 
2008, 
most 
of 
the 
treated 
effluents 
will 
discharge 
directly 
into 
Dagu 
Canal, 
from 
Jizhuangzi 
(650,000 
did), 
Xianyanglu 
(450,000 
m3id) 
and Shuanglin 
(200,000 
m3). 
Once 
these 
WWTPs 
have 
been 
constructed the water 
quality 
of 
the 
canal 
is 
expected 
to 
improve 
significantly. 
However, 
there 
will 
still 
be 
an impact 
on 
water 
quality 
from 
the 
existing 
contaminated sediment 
in 
the 
canal, 
and 
the 
contamination 
of 
land 
and crops 
from 
the 
irrigation 
and 
flooding 
will 
continue. 
The 
Dagu 
Canal 
Rehabilitation 
thus 
has 
two 
objectives: 
- 
32 
- 
Page  37
Remove contaminated 
sediment 
to 
improve 
water 
quality, 
reduce 
contamination 
of 
the surrounding 
land 
and 
crops and 
the 
Bohai 
Bay. 
Increase 
the hydraulic 
capacity 
of 
the 
canal 
to cany 
increased discharges 
of 
treated 
effluent 
and 
stormwater. 
The 
Dagu 
Canal 
Rehabilitation 
component 
will 
dredge 
and 
dispose 
of 
the sediments 
and 
restore 
or 
expand the 
canal 
cross-section. 
The 
subproject 
includes 
the 
Dagu 
Canal 
section 
itself 
(67.5 
km), 
and 
two 
tributaries 
draining 
the 
Jizhuangzi Canal 
section 
(3.7 
km) 
and 
Xianfeng 
Canal section 
(12.5 
km), 
for a 
total 
length 
of 
83.7 
km. 
Pump 
stations 
along 
the 
canal 
will 
be rehabilitated, 
and 
the canal 
will 
be 
lined 
in 
sections 
within 
the 
Tianjin 
urban 
area. 
A 
number 
of 
options 
were considered 
for 
Dagu Canal Rehabilitation, including: 
i) 
Leaving 
sediments 
in 
place 
but 
widening 
the 
canal; 
ii) 
Construction 
of 
a 
new 
canal 
and 
filling 
in 
the 
existing 
canal; 
iii) 
Creating 
a 
new 
canal 
from 
pump 
station 
number 
2 
and 
diverting 
all 
of 
the 
flow 
in 
the 
Dagu 
canal 
into 
the 
new 
canal 
and discharging 
to 
the 
Hai 
River; 
iv) 
Restoring 
the 
original 
canal cross-section 
through 
dredging 
and 
off-site 
disposal 
of 
the 
sediment. 
The 
final 
option 
was 
selected. 
The 
sediments 
are 
classified 
as 
either contaminated 
or 
uncontaminated 
based 
on 
the 
national 
environmental 
and agricultural 
standards 
for 
concentrations 
of 
various 
contaminants such 
as 
heavy 
metals 
and 
petroleum 
hydrocarbons.  Sediments 
that 
are 
contaminated 
beyond 
the standards 
will 
be 
disposed 
of 
in 
dedicated 
landfills. 
Less 
contaminated 
sediments 
will 
be 
used 
in 
a 
beneficial 
manner 
(construction 
materials, 
agricultural 
and forestry 
applications, 
etc.). 
Preliminary 
characterization 
of 
the 
sediments has 
been carried 
out, 
on 
the 
basis 
of 
sampling 
and analysis 
of 
the 
sediment 
and 
a 
pilot 
dredging. 
The current 
estimate 
indicates 
that 
up 
to 
half 
of 
the 
total 
sediments (about 2 
million 
m3) 
needs 
to 
be 
disposed 
of 
in 
hazardous 
landfills. 
Three 
landfill 
sites 
have 
been 
secured, 
which 
can 
accommodate 
entire 
sediment 
in 
case 
higher 
extent 
of 
contamination 
is 
found 
in 
further 
investigation. 
A 
plan 
for 
more 
detailed 
characterization 
of 
sediments, 
landfill 
design, 
and 
remediation 
(dredging, transportation, 
etc.) 
methods 
is 
being 
prepared, 
and 
the 
completion and implementation 
of 
the 
plan 
satisfactory 
to 
the 
Bank 
will 
be 
required 
as 
a 
condition 
of 
disbursement 
for 
this 
component. 
Project 
Component 
5 
- 
US$43.10 
million 
Suburban 
Sewerage. 
In 
contrast 
to 
the 
large 
sewerage 
investment 
program 
in 
Tianjin 
city, 
there 
is 
very 
little 
attention 
or 
investment 
in 
wastewater management 
in 
the 
suburban 
areas 
of 
the 
Municipality. 
The 
suburban 
areas 
account 
for 
over 
60% 
of 
the 
population 
of 
Tianjin, 
contain most 
of 
the 
polluting 
industries, 
and 
often 
discharge 
directly 
into 
land 
or 
natural 
water 
courses 
and 
eventually 
to 
the 
Bohai 
Sea. 
The 
investment 
needs 
are 
enormous, 
but 
the 
financial 
and 
technical 
capabilities 
of 
the 
small cities 
in 
the suburban 
areas 
are 
often 
inadequate, 
making 
this 
the 
most 
challenging and important 
pollution 
control 
issue 
in 
Tianjin. 
The 
project 
will 
provide 
about 
$20 
million 
of 
loan 
financing 
for 
sewerage 
facility 
investment 
in 
selected suburban 
areas 
on 
a 
programmatic 
basis. 
The 
GEF-financed 
Hai 
Basin 
project, under 
preparation, 
is 
expected 
to provide 
grant 
support 
to 
supplement 
this 
and 
local 
financing. 
Two 
small 
suburban wastewater management 
schemes 
have 
been 
submitted 
to 
the 
World 
Bank for 
project inclusion: 
100,000 m31d 
Yingcheng 
WWTP 
in 
Hangu 
District, 
which 
will 
also 
serve 
a 
new 
industrial 
area 
to 
be 
developed 
by 
TEDA, 
and 
the 
150,000 
m31d 
Nanpei 
Hu 
WWTP 
in 
Tangu 
District. 
The 
Districts, 
adjoining 
the 
rapidly 
developing 
TEDA, 
are 
overseen 
by 
the Coastal 
City 
Administration 
Commission, a special 
oversight 
authority 
under 
TMG. 
The Commission 
has 
asked 
the 
TEDA 
Water 
Company, a 
subsidiary 
of 
the 
TEDA 
Authority, 
to 
take 
the 
responsibility 
for 
planning 
and 
providing 
for 
the 
sewerage 
services 
in 
the 
coastal 
districts. 
It 
employed 
a 
consultant 
and completed 
the 
feasibility 
reports 
for 
the 
schemes 
in 
Hangu and 
Tangu, 
adopting 
the 
lowest 
cost 
approach, 
using 
oxidation 
ditch 
treatment 
technology and 
combined 
stormwaterlwastewater 
collection 
networks. 
- 
33 
- 
Page  38
The 
main 
challenge 
would 
be 
clear and 
feasible 
institutional 
and 
financial 
arrangements, 
given 
the 
institutional 
complexity 
and 
generally 
low 
incomes 
of 
the 
houieholds 
and 
governments. 
The 
designation 
of 
the 
TEDA 
Water 
appears 
to 
be 
an 
appropriate 
decision 
that 
will 
make 
best 
use 
of 
technical 
and 
managerial 
resources, 
and 
can 
become 
a 
very 
useful 
model 
of 
the 
regional 
service 
provider 
for 
small 
jurisdictions. 
Especially 
under 
this 
type 
of 
institutional 
arrangements, 
a 
key would be 
adequate service 
and 
payment agreements 
with 
the 
local 
governments 
andor 
with 
major 
service user groups. 
For 
industrial 
users 
of 
sewerage services, 
requirements 
of 
pretreatment 
and 
fully 
priced 
sewerage 
services 
would 
be 
justified 
at least 
in 
principle. 
For 
households, 
this 
may 
be 
difficult for 
a 
large number of 
population 
with 
low 
incomes 
at 
least 
in 
the 
near 
future. 
Some 
public 
subsidies 
could 
be 
justified 
as 
seen 
often 
in 
other countries, 
but 
the current 
fiscal 
situation 
would 
not allow 
any 
significant 
subsidies. 
The 
GEF 
grant 
could 
be 
used, 
for example, for output-based 
aid 
to 
bridge 
some 
of 
the 
affordability 
gap 
during 
initial 
period. 
The 
Bank 
will 
work 
with 
TMG 
and 
the 
directly 
involved 
parties 
during 
early 
project 
implementation 
to 
help 
resolve the 
financial 
and 
institutional 
issues. 
A 
revised 
feasibility 
study 
with 
clear 
financing 
and 
institutional 
arrangements, 
written 
preliminary 
agreement 
with 
District 
government 
and 
main 
industrial 
users 
for 
the 
service 
and 
payments, establishment 
of 
a 
competent 
sub-project 
office, 
as 
well 
as 
adequate 
EA 
and 
RAP, 
would 
be 
required 
before 
the 
start 
of 
investment 
for 
this 
component. 
Project 
Component 
6 
- 
US$81.50 
million 
Urban 
Road 
Infrastructure: 
A 
collection 
of various 
works 
mostly 
on 
the 
Middle 
Ring 
Road 
to 
improve 
the 
function 
of 
MRR 
along 
the western, southern 
and 
north-eastern 
sections; 
and 
to 
alleviate 
congestion 
of 
the 
northern and 
the 
southern 
legs 
of 
the 
IRR 
with 
due 
priority 
to 
the 
public 
transport. 
UR1- 
Jinzhonghe 
Interchange: 
Located 
on 
the north-eastern 
part 
of 
the 
MRR, 
this 
intersection 
connects 
MRR 
with 
. 
Jinzhonghe 
Dajie, 
which 
is 
the 
main 
northern 
entrance 
to Tianjin 
from 
the 
Jing-Jin-Tang 
Expressway. 
It 
presently 
support 
a 
heavy 
traffic 
expected 
to 
increase 
rapidly 
with 
the 
economic development 
of 
the 
area. 
The 
project 
will 
create 
a 
3 
level 
flyover 
for 
through 
traffic 
on 
both 
roads, 
made 
of 
a 
4-lane 
flyover 
along 
the 
Jinzhonghe 
Dajie, 
and 
of 
a 
6-lane 
flyover 
along 
the 
MRR 
over 
the 
previous 
one. 
It 
will 
be 
about 
500m 
long 
along 
the 
Jinzhonghe 
and 
900m 
long 
along 
MRR, 
which 
will 
span over 
the 
next 
road 
on 
the 
North, 
Zhongshanbei road. 
Turning 
movements 
of 
MVs 
as 
well 
as 
NlMv 
will 
be 
made 
at 
grade. 
UR2 
- 
Dagunan 
Interchange: 
Located 
at 
the 
intersection 
of 
the southern 
leg 
of 
the 
MRR 
with 
Dagunan 
road 
and 
Jianshan road, 
it 
serves 
a 
major 
axis 
for 
the 
southeastern 
peri-urban 
traffic 
entering 
the 
city 
center. 
In 
addition 
the 
MRR 
at 
this 
location 
is 
already a 
busy 
commercial 
area 
and a 
future 
subway 
station 
is 
planned 
in 
the 
vicinity.  The 
present 
conceptual design 
calls 
for 
a 
3 
level 
Y-shape 
interchange 
spanning over 
a 
length 
of 
about 
800m 
on 
Weidi 
road 
(MRR) 
and 
over 
a 
shorter 
length 
on 
Dagunan 
road. 
The Feasibility 
Study 
to 
be carried out 
as 
part 
of 
the 
project 
will 
reexamine the design 
to 
optimize 
it, 
in 
particular 
to 
allow 
full 
development 
of 
and 
access 
to 
the 
various 
urban 
functions 
in 
the 
area, 
to 
support 
full 
pedestrian and 
MV 
traffic, 
as 
well 
as 
to 
minimize 
the 
environmental 
and 
social 
disruption 
in 
this 
busy 
commercial 
area. 
This 
study 
will 
include 
a 
study 
tour 
focused 
on 
good 
international 
examples 
of 
interchanges 
in 
busy 
urban 
areas. 
The construction 
of 
the 
interchange 
will 
require 
a satisfactory 
completion 
of 
the 
study 
as 
well 
as 
road 
improvements 
on 
the 
Weidi 
dao, 
and 
satisfactory 
environmental 
assessment 
and 
resettlement 
action 
plan. 
UR3 
- 
Beima 
Road: 
Widening 
1.6 
km 
of 
the 
northern 
leg 
of 
the 
Inner 
Ring 
Road 
and 
reallocation 
of 
existing road 
space 
to 
provide 
six 
MV 
lanes, 
including 
kerb-side 
bus 
lanes, 
by 
slightly 
reducing 
the 
width 
of 
the 
NMV 
lanes 
to 
about 
5.5m. 
A 
pedestrian 
footbridge 
will 
be 
built 
over 
the 
intersection 
of Beima 
road 
with 
Zhongshan 
road 
as 
part 
of 
subcomponent 
UR5. 
- 
34 
- 
Page  39
UR4 
- 
Nanjing 
Road: 
Widening 
the 
0.8 
km 
bottleneck section between 
Yingkou Road 
and 
Anshan 
Road 
plus 
two 
nearby 
junctions 
at 
Xinhua 
Road 
and 
Hubei 
Road, 
With-flow 
bus 
lanes 
will 
be introduced 
in 
both 
directions. 
The construction 
of 
these 
improvements 
will 
be 
carried out 
in 
coordination 
with 
the 
renovation 
of 
the 
metro 
line, 
i.e 
in 
the 
year 
2005 
after 
the 
completion 
of 
the 
metro 
works 
under 
this 
section 
of 
the road. 
UR5 
- 
Low 
cost 
improvements 
on 
MRR 
(Fukang 
Road): 
Improvements 
along 
the 
south-western 
leg 
of 
the 
MRR, 
2 
km 
long, 
between 
Wangdingi 
interchange 
and 
Balitai 
interchange. 
The project 
will 
involve 
reallocation 
of 
the existing 
road 
space 
to 
provide 
6 
MV 
lanes (instead 
of 
4 
now) 
by 
reducing 
the 
width 
of 
NMV 
lanes 
to 
about 
6m 
andor 
replacing 
the 
separator 
island 
by 
railing.  Kerb-side 
bus 
lanes 
are 
also 
fitted 
as 
part 
of 
the 
MV 
lanes. 
This 
concept 
has 
been 
tested 
in 
the 
south-western 
leg 
of 
the 
MRR 
on 
Hongqi 
road. These improvements, 
in 
complement 
of 
the 
ones 
being 
made 
on 
Weidi 
Road, 
will 
smoothen 
the 
traffic 
on 
the 
MMR 
west 
of 
the proposed Dagunan 
interchange, 
and 
improve 
bus 
operation 
UR6 
- 
Complementary 
low 
cost 
improvements 
on 
MRR 
and 
IRR: 
(i) 
Completing 
the 
central 
divider 
over 
a 
2.8km 
long 
section 
of 
the 
MRR 
between the proposed 
Jinzhonghe 
interchange 
and 
the 
existing 
Weiguo 
interchange 
and 
on 
Hongxing 
road, 
to 
prevent 
left 
turns 
on 
minor 
junctions 
and 
smoothen 
the operation 
of 
the interchange 
with 
limited 
acceptable 
rerouting 
of 
traffic 
on 
local 
roads 
and 
special 
crossing 
arrangements 
for 
NMVs. 
(ii) 
A 
pedestrian 
footbridge over 
the 
intersection 
of 
Beima road 
with 
Zhongshan 
road 
to 
complement the 
improvements 
to 
be 
made 
on 
Beima 
road; 
(iii) 
two 
footbridges 
along 
Hongxing road 
to 
allow 
pedestrian 
movements at closed 
intersections; 
(iv) 
low 
cost 
traffic 
management 
improvements 
of 
the 
Anshanxi 
Circular 
Island 
on 
the 
western 
MRR 
(Hongqi 
road) 
which 
is 
heavily 
congested. 
Project 
Component 
7 
- 
US$4.09 
million 
Area 
Traffic 
Control 
and 
Traffic 
Management. 
The 
existing 
ATC 
system was 
installed 
as 
part 
of 
the 
first 
Tianjin 
Urban 
Development 
and 
Environment Project 
and 
covers 
62 
junctions 
inside 
or 
on 
the 
IRR. 
This 
project 
will 
add about 
300 
controlled 
junctions 
to 
extend 
this 
system 
to 
cover 
most 
of 
the 
area 
inside 
or 
on 
the 
MRR, 
and 
on 
several 
corridors 
approaching 
this 
area. 
The 
new 
system 
will 
be implemented 
along 
with 
channelization 
and 
other 
traffic 
management 
measures 
and 
will 
provide 
for 
bus 
priority 
at 
selected locations. 
The 
contract 
will 
include 
the 
installation, debugging 
and training. 
89 
junctions 
will 
be 
implemented 
in 
the 
southern 
sector 
during 
the 
first 
year, 
and 
the others 
will 
be implemented 
over the 
next 
two 
years. 
In 
parallel 
the 
existing 
equipment 
of 
16 
junctions 
will 
be relocated 
in 
order 
to 
reduce the 
interaction 
between 
the 
area 
controlled 
by 
the 
existing 
equipment 
and 
the 
area 
controlled 
by 
the 
new 
one. 
The 
system 
will 
control 
all 
junctions 
covered under the 
urban 
road 
improvements under the 
project. 
Project 
Component 
8 
- 
US$15.16 
million 
Bus 
Priority 
Corridors 
: 
To 
complement 
the 
ring 
and 
radial 
road 
capacity 
as 
well 
as 
the 
future metro 
line, 
the 
project 
will 
finance 
bus 
priority 
measures 
improvements 
on 
selected 
corridors. 
These 
improvements 
will 
be implemented 
in 
parallel 
with 
the 
restructuring 
of 
the 
bus 
routes 
network. 
Three 
corridors 
have 
been 
pre-selected 
for 
a 
total 
length 
of 
4km 
for 
an 
East-West 
corridor along 
Huanghe 
Road 
and 
Nanma 
Road, 
6km 
for 
a 
North-South 
corridor 
along 
Jintang 
Road 
up 
to 
the 
Railway 
station, 
and 
four 
junctions 
along 
Weijin 
road. 
The 
final 
selection 
of 
the 
corridors 
as 
well 
and 
their 
feasibility 
studies 
will 
be 
done 
as 
part 
of 
the 
TA 
component 
of 
the 
project. 
The 
bus 
priority 
corridor 
improvements 
will 
be 
implemented 
after 
the 
successful 
completion 
of 
these 
studies. 
- 
35 
- 
Page  40
Project 
Component 
9 
- 
US$4.63 
million 
Institutional 
Development 
A. 
Infrastructure Information 
System: 
Establishment 
of 
a 
framework 
including 
a 
common 
platform 
and 
data 
security and 
access 
protocols 
for 
an 
integrated 
GIS 
of 
infrastructure 
facilities 
and 
services 
at the 
level 
of 
146 
service 
areas 
within Tianjin 
city, 
or 
smaller. 
Consultant 
assistance 
and 
training 
for 
the 
system 
design, 
pilot 
application 
in 
selected 
areas, 
and 
assistance 
in 
development 
of 
a 
full 
infrastructure 
GIs 
will 
be 
financed 
by 
the 
Bank. 
The 
rest 
will 
be 
financed 
by 
user departments 
and 
agencies 
(such 
as 
Telecommunication 
and Power 
Companies), 
who 
have established 
an Infrastructure 
Information 
Systems 
Development Committee 
to 
coordinate the 
development. 
B. 
Sewerage Sector 
Reform: 
Studies 
and 
training 
to 
review 
options 
for 
institutional 
arrangements 
and 
financing 
of 
sewerage 
services. 
The 
focus 
will 
be 
on 
turning 
the services 
to 
market-based operations 
including 
mobilization 
of 
capital market 
resources, 
resolving 
the 
difficulties 
associated 
with 
the recent 
divestiture 
of 
WWTPs, 
and 
on 
establishing organizational 
set-up 
to 
set 
the 
policy 
and 
regulate 
the 
sector. 
A 
full 
range 
of 
commercialization options 
will 
be 
reviewed, 
ranging 
from 
management contracts 
to 
divestiture, and 
procedures 
for 
recommended 
competitive 
process 
will 
be 
designed. 
The 
study 
will 
be 
the 
basis 
of 
an 
Action 
Plan 
for 
sector 
reform. 
C. 
Sewerage 
Institutional 
Development: 
Studies 
and 
training 
to 
strengthen the 
capacity 
of 
the 
new 
regulatory office, 
in 
establishing performance 
standards, 
rate formula, 
and 
others; 
and 
to 
strengthen 
the 
managerial and technical capacity 
of 
the 
operating entities. 
Only 
the 
former 
will 
be 
financed 
with 
the 
Bank 
loan, the 
latter 
by 
the 
entities. 
D. 
Transportation 
(i) 
Transport 
Sector 
Institution 
and 
Regulation 
Study: 
Studies 
and 
training 
to 
evaluate 
and 
implement 
strategic 
institutional 
options 
for 
the 
overall 
urban 
transportation 
management. 
The 
focus 
will 
be 
on 
developing 
an 
institutional 
mechanism 
to 
coordinate 
the 
urban 
transportation 
planning, 
management, 
and 
regulation 
responsibilities, presently 
spread 
among 
different 
agencies. 
Options 
for 
such 
as 
a 
mechanism 
would 
range 
from 
the creation 
of 
a 
formal 
organization 
such 
as 
a 
Transportation 
Authority 
or 
a 
set 
of 
formal 
rules 
mandating 
various 
forms 
of 
coordination 
among the 
agencies. 
This 
TA 
will 
be 
managed 
by 
a 
TMG 
Task 
Force, 
led 
by 
TCMC 
and 
involving Urban 
Planning, 
Public 
Transportation 
Administration 
Department, 
Traffic 
Police, 
MEB 
and 
general 
Public 
Transportation 
Group. 
(ii) 
Transportation 
Model 
Development 
Study: 
Upgrading 
the 
existing 
strategic 
traffic 
forecast 
model, 
and 
training 
the 
staff 
of 
Urban 
Planning 
and 
Design 
Institute 
to 
utilize 
and 
calibrate 
it 
and 
more 
generally 
make recommendations 
on 
transportation 
planning 
consistent 
with 
urban 
planning. 
The 
study 
will 
provide 
inputs 
for 
the 
Dagunan 
interchange study 
and 
for 
the 
Bus 
route restructuring 
study. 
(iii) 
Bus 
Routes 
Restructuring 
and 
Bus 
Priority 
Corridors 
Study: 
As 
a 
result 
of 
the 
bus 
industry 
reform 
carried 
out 
in 
recent 
years, 
the 
quantity 
and 
quality 
of 
the 
supply 
increased 
significantly, 
but 
the 
liberalized 
process 
led 
to 
a 
confusing and 
sub-optimal 
route network. 
This 
study 
will 
propose and 
evaluate a 
improved 
route 
network 
structure, 
and 
train 
the 
PTMD 
staff 
on 
the 
use 
of 
a 
route network 
planning 
tool. 
The 
study 
will 
take 
into 
account the 
metro 
project. 
This 
study 
will 
also reexamine 
the 
potential 
bus 
priority 
corridors 
to 
select 
the 
appropriate 
ones 
and develop 
their feasibility 
and 
design. 
Upon 
satisfactory 
result 
of 
this 
study 
the 
bus 
corridors 
will 
be implemented under 
the 
project. 
- 
36 
* 
Page  41
Annex 
3: 
Estimated 
Project Costs 
CHINA: 
Second Tianjin 
Urban 
Development 
and 
Environment 
Project 
Total 
Project 
Cost; 
Total Financing Required 
Front-end 
fee 
Water 
Reuse 
Dagu 
Canal 
Rehabilitation 
Suburban 
Sewerage 
Urban 
Roads 
Traffic 
Control 
System 
Bus 
Priority 
Corridors 
Institutional 
Development 
Total 
Baseline Cost 
Physical Contingencies 
Price 
Contingencies 
165.80 
168.20 
334.00 
1 
SO 
1.50 
165.80 
169.70 
335.50 
33.99 
28.92 
10.06 
22.27 
20.22 
24.81 
2.82 
6.3 
1 
2.66 
152.06 
7.60 
8.54 
4.56 
126.78 
10.05 
24.41 
I 
lion 
70.15 
50.05 
15.05 
49.86 
38.97 
56.28 
3.70 
13.70 
4.18 
301.94 
15.10 
16.96 
41.05 
45.61 
103.73 
230.51 
23.42 
33.47 
0.00 
24.4 
1 
1 
Total 
Project Costs 
Front-end 
fee 
Total Financing 
Required 
Goods 
Works 
Services 
and 
Training 
Land 
and Resettlement* 
165.80 
168.20 
334.00 
1 
SO 
1.50 
165.80 
169.70 
335.50 
- 
37 
- 
Page  42
Annex 
4 
Environmental, 
Social, 
and Economic 
Impacts 
CHINA 
Second 
Tianjin Urban Development and Environment 
Project 
A. 
Summary 
of 
Environmental 
Assessment 
and 
Environmental 
Management 
Plans 
Environmental 
Assessment 
1. 
guidelines 
of 
China and 
the 
World 
Bank. 
The objective 
is 
to 
identify 
at 
an 
early 
stage 
the 
potential 
environmental 
consequences 
of 
the project, propose 
measures 
to 
avoid, 
mitigate 
or 
otherwise 
compensate 
negative environmental impacts 
during 
construction 
and 
operation, 
and 
allow 
incorporation 
of 
appropriate 
measures 
in 
the 
design 
to 
reduce 
negative 
impacts 
to 
a 
minimum 
and 
acceptable 
level. 
Environmental 
Assessment 
(EA) 
was 
conducted 
for 
the 
project 
based 
on 
relevant 
regulations and 
2. 
impacts 
and 
mitigation, 
environmental 
management 
plan, 
and 
public 
participation 
and 
information 
disclosure. 
The 
scope 
of 
assessment 
is 
designated 
based 
on 
project 
TOR 
in 
the 
areas 
of 
The 
assessment 
focused 
on 
the 
baseline 
data, 
alternatives, 
environmental benefits, negative 
Water: Dagu, 
Jizhuangzi 
and 
Xianfeng 
canals, 
receiving 
water; 
Air: 
500 
m 
from 
the 
project 
roads, canals, 
WWTPs, 
sludge 
disposal 
sites 
and 
pumping 
stations; 
Noise: 
200 
m 
on 
both 
sides 
of 
the 
project 
roads, 
the 
boundaries 
of 
WWTP 
and 
pumping 
stations, 
boundaries 
of 
construction 
sites; 
Sea: 
Bohai 
Bay 
near 
Tianjin 
shoreline; 
Groundwater: 
area 
surrounding and downstream 
from 
sludge 
disposal 
sites; 
Soil 
and 
vegetation: 
project 
area, 
land 
acquired 
andor 
occupied, 
and 
land 
application 
of 
sludge; 
and 
Community: 
100 
to 
500 
m 
from 
all 
project 
sites. 
Baseline 
Data 
3. 
province 
to 
the 
north, 
south, 
and 
west 
and 
the 
Bohai 
sea 
to 
the 
east. 
The 
municipality 
has a 
total 
area 
of 
11,920 
km2 
with 
153.3 
km 
of 
coastal 
line. 
The 
general 
topography 
of 
the 
project 
area 
slopes 
from 
northwest 
to 
southeast 
towards 
the 
Bohai 
Sea. 
Except 
a 
small 
mountainous 
area 
in 
the 
northwest, 
most 
area 
of 
Tianjin 
is 
an 
alluvial 
plain 
with 
the 
average 
elevation 
of 
about 
3.5-5 
m 
above the 
sea 
level. 
General. 
Tianjin 
Municipality 
is 
located 
in 
northern 
China, 
bordering 
Beijing 
to 
the 
west, 
Hebei 
4. 
average 
temperature 
is 
12.5 
'C, 
with 
the 
highest 
monthly 
temperature 
of 
above 
29 
'C 
in 
July 
and 
the 
lowest 
monthly 
temperature 
of 
-7 
"C 
in 
January. 
Average 
annual 
precipitation 
is 
559 
mm, 
with 
7545% 
of 
the 
annual 
precipitation 
occurring 
within 
the 
four 
month period 
between 
June 
and 
September. 
The 
wind 
directions 
are 
relatively 
dispersed 
with no 
dominant direction. 
The prevailing 
atmospheric 
stability 
is 
D 
at 
56.7%, 
followed 
by 
C 
at 
16.9%. 
A 
large 
area 
of 
the 
city, 
primarily 
those 
close 
to 
the 
shoreline, 
is 
saline 
and 
sterile and unsuitable 
for 
agricultural 
uses. 
The 
climate 
is 
characterized 
by 
distinct 
seasons 
with 
sharp temperature 
changes. 
The 
annual 
5. 
Water. 
The 
total 
surface 
water 
inflow 
into 
Tianjin 
is 
2.61 
billion 
m3 
in 
an 
average year 
with 
significant 
yearly 
variety 
which could 
be 
as 
low 
as 
527 
million 
m3. 
The 
area 
precipitation 
contributes 
an 
average 
surface 
runoff 
to the 
rivers 
of 
895 
million 
m3lyear. 
Qiaobei 
and Beidagang reservoirs have 
412 
and 277 
million 
m3 
capacity, 
respectively. 
The total 
groundwater 
resources 
in 
Tianjin 
is 
about 
817 
million 
m3, 
of 
which 
702 
million 
m3 
is 
abstractable. 
The 
total 
annual 
average 
flows 
out 
of 
Tianjin 
- 
38 
- 
Page  43
is 
5.3 
billion 
m3: 
to 
the 
Bohai 
sea, 
2.33 
billion 
m3; 
abstraction 
for 
urban 
water 
supply, 
about 
1.2 
billion 
m3; 
agricultural 
irrigation, 
1.5 
billion 
m3; 
with 
the remainder 
lost 
to 
miscellaneous 
uses, 
evaluation 
and 
recharge 
to 
the 
groundwater 
and 
area 
reservoirs. 
6. 
wastewater 
used 
in 
farm land 
irrigation. 
Of 
the 
total 
amount consumed, 
industrial consumption 
was 
754 
million 
m3, 
urban 
domestic use 
440 
million 
m3, 
urban 
lakeslsurface water 
recharges 
50 
million 
m3, 
irrigation 
of 
farm 
land 
1.49 
billion 
m3, 
rural 
domestic 
uses 
127 
million 
m3, 
and 
forest, 
fishing 
and 
animal 
husbandry 
3 
12 
million 
m3. 
The 
total urban 
consumption 
was 
1.244 
billion 
m3. 
In 
the 
eight 
years 
from 
1991 
to 
1998, 
Tianjin’s 
water consumption 
had 
increased 
by 
an 
annual 
average 
of 
0.9%, 
led 
by 
urban 
domestic 
uses 
(5%), 
industrial 
uses 
(1%) 
and 
irrigation 
(0.2%). 
In 
1998, 
the 
total 
water consumption 
in 
Tianjin 
was 3.17 
billion 
m3, 
including 
691 
million m3 
of 
7. 
According 
to 
Tianjin 
Environmental 
Quality 
Report 
1999-2000, 
water 
quality 
in 
all 
major 
surface 
water 
streams 
in 
Tianjin 
was 
below 
Category 
V, 
unfit 
for 
any 
productive 
use. 
In 
2000, 
total 
pollutant 
(organic) 
load 
in 
Tianjin 
was 
186,200 
tons 
of 
COD 
including 
72,600 
tons 
or 
40% 
from 
industrial 
sources 
and 
113,600 
tons 
or 
60% 
from 
domestic 
sources. 
Surface 
runoff 
from 
agricultural 
fields 
is 
unknown both 
in 
terms 
of 
volume and 
quantity 
in 
COD. 
The 
loads 
of 
other 
pollutants 
from 
industrial 
effluent 
such 
as 
chromium, 
phenol 
and cyanide 
had 
been 
reduced 
by 
82%,  5% 
and 
53% 
respectively 
by 
2000. 
8. 
to 
around 
0.3 
mglm3, 
SO2 
over 
65% 
to 
0.07 
mglm3, 
and 
NOx, 
about 
40% 
to 
0.05 
mglm3. 
These 
concentrations 
are 
at 
or 
slightly 
higher 
than 
the 
ambient 
air 
quality 
standards 
applicable 
to 
urban 
areas. 
Monitoring 
was 
conducted 
during 
the 
EA 
in 
12 
monitoring 
sites 
on 
selected sensitive receptors 
along 
roads 
proposed 
for 
the 
project 
for 
TSP, 
NO2 
and 
CO 
and 
the 
six 
selected sites 
along 
the 
Dagu 
Canal 
for 
nuisance 
odor. 
The 
observed TSP 
daily 
average 
concentrations 
of 
0.056-0.568 
mgJm3 
and 
CO 
daily 
average 
concentrations 
of 
0.91-6.9 
mglm3 
partly 
exceeded 
the applicable 
standards 
of 
0.30 
mgJm3 
and 
4.0 
mglm3, 
respectively. 
At 
each 
monitoring 
site, 
the 
exceedance 
rate 
for 
TSP 
was 
4040% 
while 
that 
for 
CO 
was 40-100%. 
The 
monitoring 
results 
for N02, 
on 
the 
other 
hand, 
have 
all 
met 
with 
the 
applicable 
standard 
of 
0.12 mgJm3, 
indicating 
that 
the 
primary 
sources 
for 
air pollution 
in 
Tianjin 
are 
coal-burning 
boilers 
and 
air 
borne 
dust 
from 
roads. 
The 
nuisance 
odor 
monitoring 
results 
showed 
that 
up 
to 
50 
m 
from 
the 
Dagu 
Canal, 
selected 
odor 
parameters such 
as 
nuisance 
odor 
and 
NH3’s 
exceeded the 
standards. 
Air. 
Ambient air 
quality 
in 
Tianjin 
has 
been 
improving 
since 1980. TSP 
has 
decreased 
over 
50% 
9. 
Bohai 
Sea. 
The 
Bohai 
Sea 
is 
surrounded 
by 
Liaoning 
province 
to 
the 
north, 
Hebei 
province and 
Tianjin 
to 
the 
west, 
and 
Shandong 
province 
to 
the 
south 
and 
southeast. 
In 
total, 
91 
rivers 
discharge 
to 
the 
Bohai 
Sea, 
including 
19 
from 
Tianjin, 
47 
from 
Hebei, 
and 
10 
from 
Shandong. 
The 
total 
discharge 
volume 
from 
the 
91 
rivers 
is 
on 
average 69.0 
to 
139.1 
billion 
m3, 
of 
which 
about 
15.4 
billion 
m3 
is 
from 
the 
Hai 
River 
Basin 
(HRB). 
The Bohai 
sea 
receives a 
total 
COD 
influx 
of 
309,906 
tlyear, 
nitrogen, 
24,877 
tlyear 
and 
phosphorus 
1,255 
tiyear through 
rivers 
and 
municipal 
discharges 
from 
Tianjin. According 
to 
an earlier 
study, 
however, 
over 
70% 
of 
the 
pollutants 
discharged 
into 
the 
Bohai 
Sea 
are those 
from 
agricultural non-point 
sources. 
10. 
Dagu 
sediments. 
The existing 
characteristics 
of 
sediment 
sludge 
in 
Dagu 
canal 
is 
critically 
important 
to 
the 
Dagu 
canal 
remediation 
plan 
and 
sludge 
disposal. 
The 
EA 
designed 
and 
carried 
out 
a 
sediment 
monitoring 
program. 
In 
total, 
16 
monitoring 
sites 
were 
selected 
covering 
all 
major 
natural 
and 
industrial 
discharge 
points 
to 
the 
canal. 
In 
total, 
34 
parameters 
were analyzed 
for 
organic, 
inorganic, 
mineral oil, 
pesticides, herbicides, 
as 
well 
as 
soil 
texture. 
The 
results show that 
eight 
samples 
from 
top 
sludge 
and 
two from 
bottom 
have 
been contaminated 
by 
heavy 
metals and/or 
- 
39 
- 
Page  44
mineral 
oil. 
One 
to 
several 
contaminant 
concentrations 
at 
this 
locations 
have exceeded the 
Contaminant 
Control 
Standards for 
Agricultural Application 
of 
Sludge. 
Sludge 
from 
these sections, 
particularly 
the 
top 
sludge, 
will 
be 
classified 
as 
hazardous waste 
and 
require 
special 
methods 
for 
disposal, 
such 
as 
secured 
landfills. 
1 
1. 
Others. 
Ecological 
surveys were 
carried out 
during 
the 
EA 
for 
aquatic 
life 
in 
Dagu 
Canal 
and 
vegetation 
in 
project 
areas. 
The 
results 
showed 
that 
in 
Dagu 
Canal 
there 
existed 
only 
bacteria 
and 
low 
level 
plankton 
with 
rare 
high 
level 
aquatic 
life 
including 
fish 
which may only 
be 
observed 
during 
the 
rainy 
season 
when 
they 
are 
overflow 
from 
reservoirs and 
fishponds. 
There 
is 
no 
forest 
or 
endangered 
species 
of 
plants 
in 
the 
project 
area. 
Top 
soil 
(to 
25 
cm) 
and 
in-ground 
soil 
(below 
25 cm) 
were 
collected 
and 
analyzed 
from 
seven 
locations 
of 
farm 
land 
along 
Dagu 
canal. 
Except 
three 
in-ground 
soil 
samples whose 
mineral 
concentrations were above the Class 
II 
criteria 
in 
the 
Soil 
Environment 
Quality 
Standards 
and 
Contaminant 
Control 
Standards 
for 
Agricultural Application 
of 
Sludge, 
all 
others were 
below 
the 
standards. 
The 
EA 
measured 
existing 
noise 
levels 
in 
27 
selected representative 
sensitive 
receptors 
(hospitals, schools 
and 
residential 
buildings) 
located 
within 
the 
project 
impacted 
areas. 
The 
results 
showed 
that 
for 
both 
hospital and residential 
areas, 
the 
levels 
of 
noise 
exceeded 
the 
Class 
I 
standards 
(55 
dB(A) 
for 
day 
time 
and 
45 
dB 
(A) 
for 
night) 
by 
as 
much 
as 
16.9 
dB(A) 
and 
7.4 
to 
17.4 
dB 
(A) 
respective 
in 
day 
time 
and 
21.7 
&(A) 
and 
7.3 
to 
30.1 
&(A) 
at 
night. 
Analysis 
of 
Alternatives 
12. 
During 
the 
project 
development, various 
alternatives were evaluated 
on 
the basis 
of 
technical, 
economic 
and environmental 
criteria. 
Minimizing 
the 
adverse 
environmental 
impacts 
was 
a 
main 
criteria. 
The 
comparison 
of 
alternatives 
were made 
for 
the 
following 
components: 
* 
. 
. 
process 
for 
the 
project 
WWTPs; 
. 
sludge transport, 
and 
on-site versus 
landfill 
site 
dewatering, 
and 
landfill 
versus 
woodlandfarmland 
sludge disposal; 
. 
. 
. 
. 
. 
* 
. 
Alternative 
storm 
water 
sewer 
and 
sewage 
interceptor routes 
and 
pumping 
station 
layout; 
Alternative 
sites 
for 
WWTPs 
and 
pumping 
stations; 
Sequencing 
Batch 
Reactor 
(SBR) 
versus 
oxidation 
ditch 
for 
primary 
wastewater treatment 
Mechanical 
versus 
hydraulic 
dredging 
for 
Dagu 
Canal 
cleanup, 
roadtruck 
versus 
pipeihydraulic 
Alternative 
landfill 
sites 
and 
other 
disposal options; 
With 
and 
without liners 
following 
Dagu 
Canal 
dredging; 
With 
and 
without 
Dagu 
Canal 
dredging 
and 
remediation; 
Intersection 
improvement 
versus 
interchange construction; 
Alternative 
interchange 
designs 
and configurations; 
Alternative 
designs 
on 
intersection 
improvement; and 
With 
and 
without 
the 
urban 
transport 
project 
components 
or 
sub-components 
13. 
The 
recommendations made 
by 
the 
EA 
team were 
accepted, 
including 
the 
Shuanglin 
WWTP 
site 
selection 
which 
was 
originally 
preferred 
by 
the 
design 
engineers 
close 
to 
a 
rural 
residential 
community. After  a 
detailed 
analysis 
and 
discussions, 
the 
project 
proponent 
and 
designers accepted 
the 
EA 
team 
recommended alternative 
site 
some 
2.1 
km 
away 
from 
the 
original 
one 
for 
the Shuanglin 
WWTP, 
lengthening 
the 
distance 
of 
sewage 
conveyance. 
Environmental 
Benefits 
14. 
Water quality 
improvement. 
The 
project 
will 
bring 
significant benefits 
to 
the 
water 
- 
40 
- 
Page  45
environment 
of 
the 
HRB, 
urban 
section 
of 
Hai 
River 
in 
Tianjin 
and 
other 
aspects 
of 
environment 
and 
life 
which 
depend 
on 
water 
quality. 
In 
terms 
of 
pollutant 
loads 
to 
the 
HRB, 
the 
project 
will 
reduce a 
total 
load 
of 
COD 
by 
44,873 
tonlyear, 
BOD, 
20,750 
tonlyear, 
ammonia 
nitrogen, 
1,543 
tonlyear 
and 
total 
phosphorus, 53 
1 
t'year 
by 
the 
two 
WWTPs 
(Shuanglin 
and 
Yingcheng). 
The 
drainage 
network 
component 
will 
intercept 
all 
the 
wastewater 
in 
project 
areas 
with 
426,000 
people, 
which 
will 
improve 
the 
water 
quality 
in 
urban 
sections 
of 
the 
Hai 
River 
to 
the 
level 
equivalent 
to 
that 
of 
upstream 
from 
the 
city. 
The 
Dagu 
Canal 
cleanup 
and 
the 
increase 
of 
wastewater treatment 
rate 
following 
the project 
implementation 
will 
contribute 
to 
the water 
quality 
improvement 
in 
Dagu 
and 
other rivers, 
which 
will 
alleviate the 
adverse 
effect 
caused 
from 
the current 
wastewater 
irrigation 
practice 
in 
the region, 
15. 
Air 
quality 
improvement. 
An 
US 
EPA 
ISCLT 
model 
was used 
during 
the 
EA 
to 
predict 
the 
impact 
of 
the 
urban 
transport 
component 
to 
the 
regional 
or 
city 
wide 
air 
quality. 
The 
model 
results 
indicate 
that 
the 
maximum 
CO 
concentration 
in 
the 
city 
is 
expected 
to 
decrease 
to 
3.43 
mg/" 
from 
the 
current 
level 
of 
4.27 
mglm, 
while 
the 
maximum 
NOx 
concentration 
to 
0.1 
12 
mg/m 
from 
the 
current 
level 
of 
0.141 
mg/m. 
The 
reduced 
air pollution 
levels 
and 
improvement 
of 
ambient 
air 
quality 
from 
a 
city 
wide 
perspective reflects the 
improved motor 
vehicle operation 
efficiency through 
increased 
average 
motor 
vehicle 
speeds, 
as 
well 
as 
other 
air 
pollution 
programs 
planned 
in 
Tianjin. 
16. 
Bohai 
Sea. 
The 
mathematical 
model 
used 
for 
the 
EA 
suggested 
that the 
project 
will 
reduce 
pollutant 
discharge 
to 
the 
marine 
water 
in 
the 
Bohai 
sea 
near 
Tianjin 
shoreline: 
COD 
discharge 
through 
Dagu 
canal 
and Beitang 
canal 
will 
reduce 
to 
36,600 
tonlyear 
from 
the 
current 
level 
of 
234,200 
tonlyear, 
nitrogen 
to 
926 
todyear 
from 
12,554 
tonlyear and 
phosphorus 
to 
378 
tonlyear 
from 
787 
tonlyear. 
The model 
further 
indicated 
that 
COD 
concentration 4000 
meters 
from 
the shoreline 
into 
the 
sea 
will 
be 
0.7 
mgL, 
close 
to 
the 
background 
concentration 
for 
organic 
in 
such environment. 
17. 
Others 
improvement 
and 
benefits 
are 
also 
predicted 
in 
environmental, economic 
and 
social 
aspects, 
such 
as 
odor 
elimination 
in 
the 
areas 
along 
the 
Dagu 
Canal 
through 
its 
cleanup, 
land 
and 
property 
value 
increase 
along 
the 
HRB 
rivers, 
increased 
recreation 
space 
for 
communities 
in 
the 
urban 
section 
of 
the 
Hai 
River, 
revenue increase 
from 
tourism, 
improved bio-diversity 
and 
ecosystem 
improvement 
in 
the 
fresh 
water 
system, 
etc. 
Negative 
Environmental Impacts 
and 
Mitigation 
18. 
General 
impacts 
and 
mitigation: 
Various 
impacts 
during 
project 
construction 
and 
operation 
stages 
were identified, 
and counterpart 
mitigation 
measures 
were recommended 
in 
the 
EA. 
Temporary 
adverse 
impacts 
include 
air 
borne 
dust 
from 
structureibuilding 
demolition 
and 
vehicle 
moment, 
noise 
from 
construction 
and 
vehicle, 
traffic 
congestion, wastewater discharge 
from 
construction 
camps, 
earth 
material 
for 
disposal 
and 
construction, 
interruption 
of 
municipal 
services, 
land 
impacts, 
etc. 
In 
order 
to 
mitigate 
these 
impacts, 
counterpart 
measures 
were 
developed 
and 
recommended. 
They 
include 
water spray 
and 
fence 
construction 
to 
prevent 
the 
dust, 
careful 
scheduled 
construction 
activities, 
prohibition 
of 
uses 
of 
certain 
noisy 
machines 
at 
night 
and 
temporary noise barriers 
to 
reduce 
the 
noise 
impacts, 
traffic 
plans 
to 
reduce 
construction 
in 
congested 
urban 
centers, 
covered 
earth and 
bulk 
materials 
during 
transportation 
to 
reduce the 
dust, 
well 
planned 
temporary 
land 
occupation 
in 
consultation 
with 
farmers 
and 
others 
affected, 
and 
recovery 
of 
the 
land 
at the 
end 
of 
temporary 
uses 
to 
minimize 
the 
loss 
of 
crops, 
prompt removal 
of 
construction 
waste 
and 
debris 
from 
the 
sites 
and 
their 
daily 
disposal 
in 
dedicated 
off 
site locations, 
etc. 
19. 
Dagu 
Canal Rehabilitation 
will 
involve 
dredging, 
dewatering, conveyance 
and 
disposal 
of 
sediment. 
The 
major 
impacts 
include 
odor, sediment 
dewatering effluent, 
noise, 
dust 
and 
land 
impact. 
-41 
- 
Page  46
In 
order 
to 
minimize 
the odor 
impacts, where possible, 
hydraulic 
approach 
will 
be applied 
where the 
dredging 
will 
primarily 
take 
place 
under 
the 
water 
with 
no 
interruption 
of 
canal 
flows. 
When 
mechanical 
dredging 
is 
applied 
the 
odor 
will 
exceed 
the 
standard 
up 
to 
100 
m 
away 
but 
will 
fade 
significantly 
and 
quickly. 
Sediment dewatering, sand washing, 
machine washing 
and 
domestic 
activities 
in 
construction 
camps 
will 
generate 
1685 
m3iday 
of 
effluent. 
They 
will 
be treated 
before 
discharging 
downstream. 
20. 
Dagu 
sediment 
disposal 
will 
impact 
various 
sites, 
including 
soil, 
groundwater, 
and 
sludge 
hauling 
impacts. 
According to 
the sediment analysis, 
up 
to 
half 
of 
the sediment 
is 
contaminated 
to 
exceed 
the 
Agricultural 
Irrigation 
Water 
Quality 
Standards 
and 
Class 
I1 
of 
the 
Integrated 
Wastewater 
Discharge 
Standards. 
Three 
1anXills 
will 
be 
used 
to 
dispose 
permanently 
of 
the 
sediment 
contaminated 
with 
heavy 
metals, 
oil 
and 
other hazardous materials. 
These 
landfills 
will 
be 
designed 
with 
toxic 
landfill 
standards 
including 
impermeable 
membrane 
liners, 
leachate 
collection 
and 
treatment, 
and 
reclamation 
and re-vegetation 
following 
the closure. 
Uncontaminated 
sediment 
will 
be 
disposed 
of 
in 
woodland 
or 
vast 
saline 
land 
along the 
coastal 
region 
as 
soil 
conditioners. 
2 
1. 
Other 
impacts. 
Other 
impacts 
include 
sunshine, 
vegetation, 
and 
social 
impacts. 
The 
social 
impacts relate 
mainly to 
land 
acquisition and 
resettlement 
which 
are 
discussed 
in 
detail 
in 
the 
following 
section 
of 
Land 
Acquisition 
and 
Resettlement. 
Environmental 
Management and 
Monitoring Plan 
22. 
Both 
government authorities 
and 
corporations 
are 
identified 
to 
be 
responsible 
for 
environmental 
management 
during 
project construction 
and operation. 
Tianj 
in 
Urban 
Construction Commission 
will 
take 
the 
ultimate 
responsibility 
for 
environmental protection 
and 
management. 
The 
Project 
Management 
Office 
(PMO) 
will 
be 
responsible 
for 
the 
day 
to 
day environmental 
management 
during 
the 
construction 
phase. 
Tianjin 
Municipal 
Environmental Bureau 
and 
its 
district 
counterparts 
will 
be 
responsible 
for 
enforcement 
of 
environmental regulations and 
standards 
and 
review 
of 
environmental 
monitoring 
reports. 
Environmental 
monitoring 
stations 
will 
be 
responsible 
for 
monitoring air 
quality, 
noise, 
water quality, 
and 
other impacts 
during 
both 
the construction 
and 
operation 
phases. 
Contractors 
and construction 
supervision 
companies 
will 
be 
responsible 
for 
implementation 
of 
various 
impact 
mitigation 
measures 
designed 
for 
the 
construction 
phase 
and at the 
construction 
sites. 
Wastewater 
companies 
will 
be 
responsible 
for 
the 
day 
to 
day environmental 
management 
during 
the operational 
phase. 
23. 
A 
special 
EMP 
will 
be 
prepared 
for 
Dagu 
canal 
remediation 
as 
a 
condition 
of 
disbursement. 
It 
would 
detail 
the methods and 
procedures 
to 
sample 
and 
analyze the sediment 
in 
detail, 
section 
by 
section, 
and 
to 
determine 
the 
remediation 
and disposal 
methods. 
It 
will 
also 
detail 
the 
plan 
to 
prevent 
further 
contamination 
of 
the 
Canal. 
24. 
A 
training program 
and 
a 
monitoring program 
were 
developed 
for 
the 
purpose 
of 
environmental 
management. 
Table 
A4. 
1 
summarizes the 
proposed 
monitoring 
activities: 
-42- 
Page  47
I 
Locations 
I 
10 
Sensitive 
receptor 
at 
I 
1 
o 
Sensitive 
receptors 
near 
Noise 
(drainage) 
Noise 
(transport) 
interchanges 
and 
roads 
interchanges 
and 
project 
roads 
Frequency 
Twice 
a 
month 
Twice 
a 
year 
during 
winter 
and 
summer 
respectively 
Parameter 
dB(4 
dB(A) 
Locations 
Construction 
sites 
Boundary 
of 
the 
plants and 
pumping 
Frequency 
Once a week 
Twice 
a year 
Parameter 
WA) 
dWA) 
Locations 
Construction 
site 
borders 
10 
Sensitive 
receptors 
near 
project 
10 
Sensitive 
receptors 
stations; 
Nearest 
village 
Frequency 
Public 
Consultation 
and 
Information 
Disclosure 
-- 
Sensitive 
receptors 
nearby 
Once a 
month 
roads and 
interchanges 
Twice 
a year 
25. 
Project 
stakeholders 
including 
the general 
public 
were consulted 
during 
the 
project 
EA, 
particularly 
those 
who 
will 
be 
directly 
affected 
by 
the project, 
such 
as 
the 
residents 
near proposed 
pipelines, 
interchanges, 
roads, 
wastewater treatment plants, 
Dagu 
canal 
and 
sludge 
disposal 
sites. 
The 
methods 
for 
the 
public 
consultation 
included 
public 
meetings, 
interviews, 
questionnaires, 
and 
public 
media. The 
EA 
team organized and chaired 
the 
public 
meetings 
which 
were 
also 
participated 
by 
project 
planners, 
design 
engineers 
and 
government 
officials. 
26. 
Advertisements 
were 
placed 
in 
the 
most 
dominant 
and 
popular 
newspapers 
in 
Tianjin 
to 
describe 
the 
project 
and 
its 
potential 
impacts and to 
invite 
the 
public 
to 
express 
their 
concerns 
about 
the 
project. 
In 
addition, 
the 
draft 
EA 
reports 
and 
other 
project 
related 
information 
including 
project 
environmental 
information 
has 
been 
placed 
in 
both 
project 
management 
offices 
and 
environmental 
institutes 
involved 
in 
the 
EA 
for 
public 
reviews 
and 
comments. 
The 
telephone 
hotline 
at 
the 
EA 
teams 
and 
manned 
by 
environmental 
specialists 
is 
another source 
of 
information 
to 
the 
public 
about the 
project 
and 
potential 
project 
impacts. 
27. 
The 
public 
consultation 
resulted 
in 
several 
changes 
in 
the 
project 
design, 
including 
the 
change 
of 
the Shuanglin 
WWTP 
location 
cited 
earlier 
(para 
13 
above), 
and 
road 
design 
and 
schedules 
to 
minimize 
resettlement 
and 
noise 
(para 
B.2 
below.) 
-43- 
Page  48
B. 
Land 
Acquisition 
and 
Resettlement 
ResettIement 
Impacts 
1. 
Involuntary 
resettlement 
required 
for 
the 
project 
will 
be 
as 
follows: 
. 
The 
project 
will 
require 
748 
mu 
(498,477 
m2) 
of 
land, 
of 
which 
155 
mu 
or 
21% are 
State-owned 
and 
593 
mu 
or 
79% 
are 
collective-owned. 3 
10 
mu 
of 
the 
collective-owned 
land 
is 
cultivated. 
The 
total 
number 
of 
people 
to 
be 
affected 
by 
land 
acquisition 
or 
relocation 
is 
859, 
including 
433 
farmers 
with 
direct 
or 
indirect 
interest 
in 
the 
cultivated 
land 
being 
taken; 
relocation 
of 
66 
residential 
units 
of 
156 
persons; 
relocation 
of 
60 
non-residential 
units 
(enterprises, 
shops 
and 
non-profit institutions) 
with 
270 
staff 
and 
managers. 
The 
impacts 
on 
the 
non-residential 
units 
are 
temporary 
and 
relatively 
minor; 
no 
one 
is 
expected 
to 
lose employment 
because 
of 
the 
project. 
A 
total 
of 
Y 
77.91 
million, 
or 
about 
3% 
of 
the 
total project 
cost, 
will 
be 
required 
for 
compensation 
and 
rehabilitation. 
. 
. 
. 
2. 
The project 
authorities undertook a 
socioeconomic survey 
and 
consultation 
with 
affected 
people 
during 
project 
preparation, 
These 
showed 
a 
widespread 
support 
for 
the 
project 
and 
the 
suggestions have 
been 
incorporated 
to 
reduce 
adverse 
impacts. 
Most 
of 
the transportation 
components 
are 
designed 
to 
improve 
the 
traffic 
capacity 
by 
adjusting 
the 
road 
section 
and 
adding 
special lane 
for 
buses 
without 
changing 
the 
current 
right 
of 
way. 
The 
revised 
design 
of 
Jinzhonghe 
Interchange 
reduced 
the 
demolition 
of 
houses 
from 
the 
original 
30,000 
m2 
to 
3,000 
m2. 
For 
pumping 
stations, 
the 
sites 
were 
selected 
either 
on 
land 
which 
have been reserved 
or 
already 
occupied 
by 
public 
facilities, 
For 
instance, 
the 
rainstorm 
pumping 
station 
at 
Nanbeicang 
will 
use 
an existing agricultural 
pumping 
station, 
meeting 
both 
the 
needs 
of 
agricultural 
irrigation 
and 
storm 
drainage. 
The 
wastewater 
pumping 
station 
was designed 
to 
fit 
in 
the 
Beicang 
Nursery 
Farm 
without 
any 
relocation 
and 
land 
acquisition. 
The 
dredging 
of 
the 
Dagu 
Canal 
will 
make 
use 
of 
both 
banks along 
the 
canal 
for 
access 
and 
sludge 
storage 
without 
occupying 
any farmland. 
3. 
The 
Nanbeicang 
WWTP 
and 
the 
Xianyanglu 
WWTP, 
financed 
partly 
by 
ADB 
and 
JBIC 
respectively, 
will 
receive 
sewage 
conveyed 
through 
the 
sewers 
built 
under 
the 
project.  The former 
required acquisition 
of 
410 
mu 
of 
nurseries 
and a 
orchard, 
and 
job 
transfer 
of 
seven households. 
The 
latter required acquisition 
of 
775 
mu 
of 
farm land 
and 
325 
mu 
of 
fish 
ponds, 
which 
were 
farmed 
22 
persons 
on 
salaried 
or 
contract 
basis. 
A 
field 
survey 
showed that the 
compensation 
and 
rehabilitation, 
carried out according 
to 
the 
local 
regulations, 
were 
consistent 
with 
standards 
of 
the 
Bank's 
policies 
(OP 
4.12) 
and 
with 
those 
for 
the 
Bank-financed 
components.  These 
are 
summarized 
at 
the 
end 
of 
this 
Section. 
Legal 
and 
Policy 
Framework 
4. 
laws 
and 
regulations. 
Relevant 
national laws 
or 
regulations 
include 
the 
Land 
Administration 
Law 
(1999), 
and 
the 
Administrative Regulation 
on 
Urban 
Building 
Demolition 
and 
Relocation 
(2001 
j. 
The 
most relevant 
municipal 
regulation 
is 
the 
Tianjin 
Municipality 
Regulation 
for 
the 
Management 
Details 
of 
Urban 
Building 
Demolition 
(1 
995). 
5. 
collectives. 
As 
a 
result, there are 
two 
types 
of 
land 
acquisition 
for 
this 
project. 
The 
first 
type 
is 
the 
The 
legal 
basis for 
land 
acquisition 
and 
resettlement 
planning 
includes 
national 
and 
municipal 
In 
China, 
all 
urban 
land 
is 
owned 
by 
the 
State, 
and 
all 
rural 
land 
is 
owned 
by 
village 
- 
44 
- 
Page  49
acquisition 
of 
collectively owned 
rural 
land.  Compensation 
and 
other forms 
of 
assistance 
must 
be 
provided 
to 
the 
collectives 
losing 
the 
land. 
The 
second 
type 
of 
land 
acquisition 
is 
the 
acquisition 
of 
land 
use 
rights 
within 
the 
built-up 
urban 
area. 
In 
this 
case, 
the 
acquiring 
agency 
or 
unit 
must 
also 
provide 
adequate compensation 
or 
resettlement 
housing 
for 
the 
displaced 
families 
and 
affected 
enterprises. 
6. 
When collectively 
owned 
farmland 
is 
acquired, the 
future 
land 
user pays compensation 
for 
land, 
loss 
of 
crops and 
attached properties, 
and 
a 
resettlement 
subsidy. 
Following 
the 
revised 
Land 
Administration 
Law, 
compensation 
is 
calculated, based 
on 
the 
following 
principles: 
. 
Land 
compensation 
will 
be 
assessed 
as 
6-10 
times 
the 
average 
annual 
output 
value, 
per 
mu, 
for 
the 
three 
years 
prior to 
acquisition 
of 
the land. 
The 
resettlement 
subsidy 
varies 
depending 
on 
the 
size 
of 
the 
agricultural 
population 
resettled. 
It 
adds 
about 
4-6 
times 
(but 
cannot 
exceed 15 
times) 
the 
average 
annual output. 
If 
land 
compensation 
and 
resettlement 
subsidies 
are 
still 
insufficient 
to 
help 
the 
resettlers 
to 
maintain their original 
living 
standards, 
the resettlement subsidies 
may be 
increased, 
but 
cannot 
exceed 
a 
multiplier 
of 
30 
times 
the 
average 
output value 
of 
the 
requisitioned 
land. 
. 
. 
7. 
rights, 
direct 
asset 
replacement, cash compensation, 
or 
a 
combination 
of 
such compensatory 
measures. 
Under 
the 
project, 
while 
no 
one 
is 
expected 
to 
lose employment permanently, 
some 
persons 
will 
lose 
wages 
or profits 
for 
a 
transitional 
period. 
They 
will 
be 
entitled 
to 
transitional 
support. 
Those 
affected 
by 
urban 
demolition 
are 
to 
be 
compensated 
through 
an 
exchange 
of 
property 
Compensation Standards 
8. 
Based 
on 
analysis 
of 
replacement value 
for 
various 
categories 
of 
affected 
assets, 
a 
set 
of 
compensation 
standards 
have 
been 
adopted 
for 
the 
project. 
Given 
that 
the 
land 
value 
in 
the 
suburbs 
of 
Tianjin 
is 
relatively 
high, 
the 
multiplier 
of 
30 
has 
been 
used 
when 
calculating 
the 
compensation 
for 
land 
acquisition 
and resettlement 
which 
will 
be paid 
to 
the 
Village 
Committees, the 
land 
owner. 
The villages 
affected 
by 
land 
acquisition 
alone 
are 
compensated 
with 
16 
times 
of 
the 
annual 
average 
production 
value, 
which 
are: 
Y16,OOOlmu 
for 
cultivated 
land, 
Y19,2001mu 
for 
paddy 
field, 
Y 
176,OOOImu 
for 
land 
covered 
by 
green 
houses, 
Y80,OOOlmu 
for 
vegetable 
plots, 
Y 
17,6001mu 
for 
orchards, 
and 
Y67,2001mu 
for 
fish 
ponds. 
For 
affected 
structures 
and 
facilities,  compensation 
standards 
are: 
Y 
1,000-1,5001square 
meter 
for 
residential 
houses; 
Y 
1,OOOlsquare 
meter 
for 
non-residential 
buildings, 
plus 
Y36lsquare 
meter 
for 
loss 
of 
production 
or 
business. 
Rehabilitation 
and 
Relocation 
Planning 
9. 
Because 
the 
project 
is 
situated 
primarily 
in 
an 
urban 
area, 
major 
project-related 
impacts 
are 
associated 
with 
structural 
demolition, 
requiring 
relocation 
as 
the 
major mitigation. 
The 
affected 
households 
will 
receive 
cash 
compensation and 
purchase 
housing according 
to 
their 
own 
preferences 
in 
the 
housing market 
which 
is 
active. 
10. 
No 
one 
is 
expected 
to 
lose employment permanently 
because 
of 
the 
project. 
However, 
rehabilitation 
measures 
are 
required 
for 
households 
affected 
by 
the 
loss 
of 
cultivated 
land 
as 
follows: 
. 
. 
. 
Redistribution 
of 
newly 
available 
land 
by 
the village; 
Job 
creation 
by 
the 
village 
committees 
which 
hold 
the 
land 
compensation 
funds; 
Employment 
by 
project 
entities 
which 
use 
the 
land; 
-45- 
Page  50
. 
Job 
hunting 
by 
the affected 
persons 
themselves, 
who 
will 
also 
receive resettlement 
compensation; 
Payment 
of 
social 
secury 
by 
the 
village. 
* 
1 
1. 
For 
the 
affected 
shops, 
two 
markets 
are 
available 
for 
them 
to 
relocate. 
For 
an 
enterprise 
which 
loses 
part 
of 
the property, 
it 
can either 
choose 
to 
rebuild 
the 
structures 
on 
reduced 
land 
in 
the 
same 
location, along 
with 
partial 
compensation, 
or 
receive 
cash 
compensation 
for 
relocation, 
In 
any 
full 
relocation, the 
new 
site 
will 
be 
selected 
though 
consultation between 
the 
project 
authorities 
and 
the 
affected 
enterprises, 
within 
the 
restrictions 
of 
the 
Urban 
Master 
Plan. 
12. 
The 
project 
will 
also 
involve relocation 
or 
replacement 
of 
public 
infrastructure 
facilities 
such 
as 
utility 
lines, 
street 
lights, 
and 
sign 
boards. 
Compensation 
based 
on 
replacement 
value 
will 
be 
paid 
to 
the 
relevant 
government agencies 
to 
restore 
the 
affected 
infrastructure 
and 
services. 
Institutional 
Arrangements 
13. 
Implementation 
responsibilities 
are 
shared 
by 
Tianjin 
Municipal 
Engineering 
Bureau 
and 
Tianjin Municipal 
Construction Corporation 
which 
is 
the 
project 
manager. 
PMO 
will 
oversee 
the 
implementation, 
with 
the 
help of 
the 
Tianjin 
Academy 
of 
Social 
Sciences, 
an 
external monitor. 
Routine 
tasks 
will 
be 
undertaken 
by 
officials 
and 
specialists 
in 
the 
District 
or 
County 
governments. 
Training 
will 
be 
provided to 
improve 
the 
implementation 
capacity 
of 
the 
responsible 
agencies. 
Community 
Participation 
and 
Public 
Disclosure 
14. 
Municipal 
and 
District 
officials, 
as 
well 
as 
project 
design staff, 
have consulted 
the 
potentially 
affected communities when 
identifying 
resettlement 
impacts, 
formulating 
resettlement policies, and 
preparing 
resettlement 
plans, 
This 
has 
allowed 
minimization 
of 
impacts 
and 
identification 
of 
remedial 
plans 
acceptable 
to 
the 
affected persons. 
Participation 
will 
continue 
during 
resettlement 
implementation. 
For 
example, 
consultation 
meetings 
will 
be 
organized 
six 
months 
before physical 
relocation. 
15. 
Information 
regarding 
the 
project 
and the 
resettlement 
program 
have 
been 
published 
in 
local 
newspapers 
and 
TV 
programs, 
and 
will 
be 
published 
again 
during 
implementation. 
To 
ensure 
that 
affected 
persons are 
informed 
about 
compensation 
standards, 
rehabilitation 
measures, 
and 
grievance procedures, resettlement announcements 
will 
be 
posted 
in 
the 
affected 
neighborhoods. 
The 
full 
RAP 
has 
been 
made 
available at 
the 
TJPMO. 
Resettlement 
Cost 
and 
Implementation 
Schedule 
16. 
Based 
on 
preliminary 
data, 
the 
project 
resettlement budget 
is 
estimated 
at 
Yuan 
77.91 
million, 
including 
monitoring 
costs 
and 
contingency 
allowances. 
Estimated 
resettlement costs are 
included 
in 
the 
project 
budget, 
shown 
in 
Table 
A4-B 
below, 
which 
can 
be 
exceeded 
if 
the 
necessary. 
17. 
Most 
of 
the resettlement 
for 
the 
fully 
identified project 
components 
will 
be 
carried out 
in 
2003 
and 
2004. 
To 
ensure 
effective 
resettlement 
implementation, 
all 
resettlement-related 
activities 
are 
planned 
to 
be 
completed at 
least one 
month 
prior to 
commencement 
of 
construction 
in 
any 
given 
area. 
-46- 
Page  51
Monitoring 
and 
Evaluation 
18. 
Resettlement 
implementation 
will 
be 
subject 
to 
both 
internal 
and 
external 
monitoring. 
The 
TJPMO 
will 
be 
responsible 
for 
internal 
monitoring 
and report 
the resettlement status 
and 
issues 
in 
the semi-annual 
project 
progress reports. 
External monitoring 
will 
be 
conducted 
by 
the 
Tianjin 
Academy 
of 
Social 
Sciences, 
which 
will 
function 
independently 
of 
the 
project 
owner. 
External 
monitoring 
reports 
will 
be 
submitted 
to 
the 
PMO 
and 
the 
Bank 
every 
year.  These 
will 
review 
the 
compliance 
with 
RAP 
terms, 
and 
will 
evaluate 
the 
adequacy 
of 
resettlement measures 
for 
improving 
or 
restoring 
incomes and 
living 
standards. 
Policy 
Framework 
19. 
For 
project 
components 
which 
are 
yet 
to 
be 
finalized 
- 
the 
suburban 
sewerage, 
bus 
priority 
corridors, 
and Dagunan 
interchange 
- 
a 
Resettlement 
Policy 
Framework 
(RPF) 
has 
been 
prepared. 
The 
standards 
are consistent 
with 
those 
for 
the 
already 
established Resettlement 
Action 
Plan 
(RAP). 
The 
RPF 
elaborates 
the 
process 
for 
preparing 
the 
resettlement 
plans 
before implementation 
of 
the 
components, 
as 
required 
under 
the 
Loan 
Agreement. 
The 
main 
steps 
involved 
in 
the 
resettlement process 
are 
as 
follows: 
(1) 
Subproject 
sponsor 
furnishes 
preliminary 
report 
on 
the 
proposed component 
to 
the 
Project 
Management 
Office 
(TJPMO)  and 
the 
local 
authorities at the earliest possible 
stage. 
The 
preliminary 
report 
would 
contain 
basic 
information 
on: 
(i) 
the proposed 
location 
of 
the 
project; 
(ii) 
total 
area 
of 
land 
required, the type 
of 
land, 
current 
land 
use 
and possible 
impacts 
of 
land 
use 
changes, 
and 
the proposed 
strategy 
for 
land 
acquisition; and 
(iii) 
the people 
to 
be 
affected 
by 
the 
project 
including 
those 
losing 
homes, 
land or 
livelihood; 
and 
those 
who 
will 
benefit 
from 
the 
project; 
(2) 
TJPMO 
will, 
after 
its 
review 
and 
consultation 
with 
the 
local 
authorities, 
inform 
the subproject 
sponsor 
to 
prepare a 
resettlement document 
according 
to 
the 
requirements 
set 
forth 
in 
the 
RPF; 
(3) 
When 
the number 
of 
persons 
affected 
by 
the subproject 
exceeds 
200, 
a 
full 
resettlement 
action 
plan 
shall 
be 
prepared. 
Where 
impacts 
on 
the 
entire 
affected 
population 
are 
minor, 
or 
fewer 
than 
200 
people 
are 
affected, 
the 
Bank 
and 
PMO 
may 
agree 
to 
accept 
an 
abbreviated resettlement plan. 
Impacts 
are 
considered 
“minor” 
if 
the 
affected 
people 
are 
not 
physically 
displaced and 
less 
than 
10% 
of 
their productive 
assets 
are 
lost. 
-47- 
Page  52
(4) 
The 
subproject 
sponsor prepares the resettlement 
plan 
and 
submits 
it 
to 
the 
local 
authorities, 
TJPMO 
and 
the 
World 
Bank 
for 
review or 
concurrence. 
(5) 
The 
reviewers shall 
verify 
the 
adequacy 
of 
the 
report 
in 
light 
of 
policies, 
principles 
and 
procedures 
set 
out 
in 
this 
RPF, 
and 
convey 
the 
decision 
to 
the subproject 
sponsor. 
(6) 
After 
obtaining 
concurrence 
of 
the 
World 
Bank, 
the subproject 
sponsor 
executes the 
agreement 
which would 
contain 
terms and 
conditions related 
to 
resettlement 
provided 
in 
the 
RPF. 
Linked 
Resettlement 
20. 
A 
large 
part 
of 
the 
sewers 
built 
under 
the 
project 
would 
convey 
the wastewater 
to 
the 
Nanbeicang 
WWTP, 
currently 
being 
built 
with 
partial financing 
from 
ADB, 
and 
the 
Xianyanglu 
WWTP, 
being 
built 
partly 
with 
JBIC 
financing. 
Both 
are 
located 
urban 
edges 
of 
Tianjin, 
that 
are 
nominally 
rural 
but 
rapidly 
industrializing. 
The 
area 
residents 
are 
nominally 
farmers 
but 
on 
average 
derive 
less 
than 
10% 
of 
the incomes 
from 
farming. 
The 
Nanbeicang 
Plant required 
acquisition, 
late 
in 
2002, 
of 
410 
mu 
of 
nurseries 
and 
a orchard, 
owned 
by 
five 
villages. 
The 
Xianyanglu 
Plant 
required 
775 
mu 
of 
farm 
land 
owned 
by 
a 
village 
and 
325 
mu 
of 
fish 
ponds 
owned 
by 
another. 
There 
was 
no 
structure 
to 
remove 
or 
relocate. 
21. 
The 
compensation 
for 
the 
land 
and 
resettlement was 
set 
at 
16 
or 
17 
times 
the 
average 
annual 
production 
over 
the 
past 3 
years, 
or 
about 
Y 
30,000 
per 
mu. 
Total 
compensation 
funds 
amounted 
to 
Y 
13 
million 
for 
the Nanbeicang 
Plant 
and 
Y 
33 
million 
for 
the 
Xianyanglu 
Plant. 
Most 
of 
these 
funds, 
already 
being 
paid, have 
been 
allocated 
by 
the 
villages 
for 
community 
facilities 
such 
as 
roads, 
village-owned 
enterprises, 
and 
social 
welfare 
payments. 
22. 
A 
part 
of 
the compensation, about 
15%, 
has 
been 
distributed 
as 
additional 
compensation 
to 
directly 
affected 
persons. 
The 
nurseries 
and 
the 
orchard 
taken 
for 
the Nanbeicang 
Plant 
were 
leased 
to 
six 
households. 
They 
were 
paid 
an 
average 
of 
Y 
300,000 
per 
household, 
depending 
upon 
the size 
of 
the 
land 
they 
were 
cultivating.  Alternative 
jobs 
have 
been offered, 
including 
another 
piece 
of 
land, 
jobs 
in 
the enterprises and the 
community 
government. 
As 
of 
January 
2003, 
one 
household 
has 
taken 
up 
the 
alternative 
land, 
but 
others 
are 
considering 
various options 
including 
establishment 
of 
their 
own 
business 
using 
the 
compensation. 
23. 
The 
farmland taken 
for 
Xianyanglu 
Plant 
was 
cultivated 
by 
15 
farmers 
of 
the 
village who 
were 
paid 
salaries 
by 
the 
village 
committee. 
They 
have 
been 
reassigned 
to 
new 
jobs 
- 
6 
on 
another 
farming 
assignment, 
4 
in 
village-owned 
enterprises, 
and 
5 
on 
community 
utility 
and 
security 
assignments. 
The 
fish 
ponds 
had 
been 
leased 
to 
five 
households 
on 
yearly 
contracts. 
The 
village 
assisted 
them 
to 
sell 
the 
fish 
before 
the ponds 
were 
closed, 
paid 
an 
additional 
compensation 
of 
Y 
65,000 
per 
household, 
and 
to 
have 
offered 
alternative 
jobs 
in 
the 
community. 
Two 
have accepted 
the 
offer 
but 
others are 
considering 
other 
options, 
mainly 
job 
openings 
in 
nearby 
joint-venture 
firms 
or 
own 
businesses. 
24. 
Public 
consultation 
on 
the compensation 
for 
the 
Xianyanglu Plant 
was 
held four 
times 
between 
June 
2001 
and 
March 
2002. 
For 
the 
land 
for 
the 
Nanbeicang 
plans, 
public 
consultation 
was 
held 
six 
times between 
November 200 
1 
and 
November 
2002. 
Grievance 
and coordination 
arrangements 
have been established based 
on 
the 
village committee-District 
government 
structure, 
and 
the 
Tianjin 
Statistical 
Information 
Services Center has 
been appointed 
as 
an 
external 
monitor. 
-48- 
Page  53
C. 
Affordability 
of 
Sewerage 
Services 
1. 
The 
water 
supply 
and 
drainage 
tariffs 
applicable 
from 
2001 
are 
shown 
in 
Table 
7 
below. 
The 
domestic 
consumer 
may 
expect 
to 
pay 
around 
Y 
2.51m3 
for 
water 
and 
sewerage services, 
and 
other 
users 
around 
Y 
3-7 
lm3.  Due 
to 
the 
extensive 
sewerage 
system 
build-up 
the 
average 
tariff 
necessary 
to 
cover 
operation and 
depreciation 
costs 
of 
the 
facilities 
is 
projected 
to 
be 
around 
Y 
1.51m3 
by 
about 
2005. 
The residential 
tariff 
is 
expected 
to 
be 
lower 
than 
this 
in 
line 
with 
the 
past 
practice. 
On 
the 
other 
hand, 
the 
water 
tariff 
is 
also expected 
to 
increase 
further 
due 
to 
the 
continuing 
water 
shortage 
and 
the 
need 
for 
large 
investment 
for 
water 
resources, 
However, 
it 
is 
not 
clear 
how 
much 
the 
tariff 
increase 
can be 
pursued, 
in 
view 
of 
the 
fact that 
the recent past 
tariff 
increases 
have 
resulted 
in 
significant 
drop 
in 
water 
consumption 
and 
in 
large 
idle 
capacity 
in 
water 
treatment. 
The 
residential 
users 
may 
therefore 
face the 
combined 
water 
and 
sewerage 
tariff 
of 
Y 
3 
- 
4 
per 
cubic 
meter 
of 
water 
used 
in 
2006. 
2. 
Affordability 
of 
drainage 
and 
water 
supply 
services 
for 
domestic 
consumers 
in 
2006 
is 
presented 
in 
Table 
2 
below.  Incomes 
are 
projected 
to 
grow 
at 
an annual 
rate 
of 
6%, 
in 
line 
with 
the 
7% 
annual 
average increase 
in 
the 
past. 
The 
analysis shows 
that water and 
drainage service 
tariffs 
will 
represent 
less 
than 
3% 
of 
income 
for 
over 
90% 
of 
the 
Tianjin 
residents, 
but 
about 
3.7% 
of 
average 
income 
for 
those 
in 
the 
lowest income 
decile. 
The latter 
is 
still 
within 
the 
widely 
adopted 
rule-of-thumb 
affordability 
limit 
of 
5% 
of 
income, 
and 
is 
likely 
to 
become 
less 
actually 
with 
savings 
on 
water 
consumption. 
This 
can 
therefore 
be 
considered 
tolerable especially 
in 
view 
of 
the water scarcity 
of 
the 
city 
and 
the subsidies 
to 
the 
lowest 
income 
groups 
under 
the 
Minimum 
Living 
Standard 
Scheme 
and 
other 
measures. 
Nevertheless, 
it 
would 
be 
an 
issue 
to 
monitor, and 
to 
consider 
in 
determining 
the 
welfare 
subsidies. 
Table 
2: 
Water and 
Sewerage 
Affordability 
IProiected 
2006 
I 
income 
PercentileIAver. Personal 
lWlS 
Tariff 
as 
% 
of 
I 
income 
Source 
(ZOO0 
income) 
: 
Tianjin 
Statistical 
Yearbook 
2001 
Assumptions: 
Projected 
growth 
of 
income 
6.0% 
per 
year 
Daily 
water 
consumption 
150 
litre 
per 
capita 
Water  and 
sewerage 
tariff 
3.5 
Y/m3 
-49- 
Page  54
D. 
Economic 
Evaluation 
of 
Transportation Improvements 
1. 
2. 
but 
not 
taxes. 
The latter 
was 
estimated 
to 
be 
about 
1% 
of 
the 
construction 
cost 
per 
year, 
and 
about 
12% 
every 
five 
years 
for 
rehabilitation.  Economic 
costs 
were 
assumed 
to 
equal the 
financial 
costs 
without 
adjustment 
in 
line 
with 
the 
practice 
for 
urban 
inputs 
in 
China. 
A 
cost 
benefit 
analysis 
was 
carried out 
for 
a 
twenty 
year 
period 
up 
to 
the 
year 
2023. 
Costs 
include 
those 
for 
investment and 
maintenance. 
The 
investment 
cost 
includes 
resettlement 
3. 
travel 
time, 
using 
delays 
and 
stops 
projected 
with 
the 
SCATES 
(Sydney 
Coordinated Adjustable 
Traffic 
Evaluation 
System) 
program, 
calibrated 
to 
reflect 
the 
Tianjin 
traffic 
conditions 
such 
as 
the heavy 
NMV 
traffic. 
Motor 
vehicle 
traffic 
volumes were 
forecast 
for 
the 
year 
2010 
and 
2020 
using 
the 
macro 
model 
used 
in 
Tianjin, 
which 
is 
based 
on 
the 
MINUTAB 
model.  Future volumes 
of 
NMVs 
were 
assessed 
with 
reference 
to 
the 
official 
targets 
for 
these 
years. 
The 
forecasts were 
reviewed 
and considered 
reasonable: 
for 
instance 
traffic 
volume 
at the 
Jinzhonghe interchange 
is 
projected 
to 
grow 
at a rate 
of 
about 
5% 
per 
year. 
VOC 
of 
MVs 
was 
assessed 
for 
the 
number 
of 
stops 
forecast 
with 
the SCATES, 
the 
cost 
per 
stop 
being 
valued at 
RMB 
Y 
0.1 
based 
on 
a 
survey 
carried out 
in 
Tianjin. 
VOC 
for 
buses 
were developed 
based 
on 
manual 
estimates 
of 
hture 
speed 
and 
volume 
per 
segment. 
The 
passenger 
time 
value 
was 
estimated 
on 
the 
basis 
of 
the 
average 
hourly 
wage 
of 
Y 
7.17 
and 
time 
savings 
ratio 
of 
60% 
in 
2002, 
the 
former 
increasing 
to 
Y 
21.8 
in 
20 
years 
and 
the 
latter 
decreasing 
to 
40% 
over 
the 
same 
period. 
These 
parameters 
produce 
benefits consisting 
mainly 
of 
travel 
time 
savings, 
representing 
80%-95% 
of 
the 
estimated 
benefits. 
The 
road 
user 
benefits 
were 
estimated 
in 
terms 
of 
savings 
in 
vehicle operating 
costs 
(VOC) and 
4. 
The 
selected 
alternative 
shows 
a baseline 
benefit 
of 
about 
11 
times the 
cost, 
at 
the discount 
rate 
of 
12% 
per 
annum, 
or 
an 
internal 
rate 
of 
return 
of 
almost 
50%. 
Other transportation 
components show 
similarly 
high 
returns, 
as 
shown 
in 
Table 
1. 
In 
view 
of 
the 
predominance 
of 
the 
travel 
time 
savings, 
the 
main 
sensitivity 
analysis was 
performed 
with 
the 
20% increase 
in 
costs 
and 
50% 
reduction 
in 
travel time 
savings. 
Still 
high 
benefit-cost 
ratios under 
this 
scenario demonstrate 
the 
robust 
feasibility 
of 
the 
proposed 
components. 
The 
proposed 
Dagunanlu 
interchange 
is 
expected 
to 
have 
some 
aesthetic 
and 
other negative impacts 
on 
the 
surrounding 
busy 
commercial 
area, 
but 
these 
costs 
could not 
be 
quantitatively 
evaluated. 
This 
will 
be 
the 
subject 
of 
the 
detailed 
study 
and 
design 
under the project. 
Three alternative 
designs 
of 
the 
Jinzhonghe interchange 
were evaluated 
with 
this 
methodology. 
1 
Jinzhonghe 
I 
DaguNan 
I 
Hongxinglu 
{ 
Weididaol 
1 
Nanjinglu 
1 
Beimalu 
1 
I 
Interchange 
1 
Interchange 
I 
Works 
I 
Fukanglu 
I 
Works 
I 
Works 
Baseline: 
BIC 
Ratio 
10.6 
I 
11.5 
I 
6.7 
1 
9.8 
I 
7.5 
(NPV, 
Y 
million) 
Alternative 
1 
: 
BIC 
4.6 
5.4 
3.2 
4.1 
33.1 
3.1 
Altemative 
2: 
BIC 
0.4 
0.3 
1.1 
0.1 
1 
.o 
0.1 
Base 
Case: 
Alternative 
1: 
Alternative 
2: 
Includes 
motor 
vehicle operating 
cost 
and 
time 
saving, 
but 
no 
NMV 
benefits 
Increase 
total 
cost 
by 
20% 
and 
decrease 
MV 
time benefits 
by 
50% 
benefits 
include 
only 
MV 
operating 
costs 
5. 
It 
is 
noteworthy 
that a 
collection 
of 
small, 
inexpensive improvements 
along the 
Hongxinlu 
and 
Nanjinglu 
are 
shown 
to 
be 
justified 
by 
VOC 
reduction 
alone, 
as 
they 
are 
shown 
feasible even 
without 
the 
travel 
time 
savings (the second 
alternative 
analysis). 
Bus 
corridors 
are 
expected 
to 
have 
similarly 
low 
costs 
and 
high 
benefits, 
especially 
the 
travel 
time 
savings, 
but 
it 
was 
not 
possible 
to 
develop 
an 
appropriate methodology 
for 
the 
evaluation 
of 
their 
as 
they 
require 
detail 
planning. 
The 
evaluation 
will 
be 
carried 
out 
as 
part 
of 
the 
Technical 
Assistance 
component 
of 
the loan. 
- 
50 
- 
Page  55
Annex 
5: 
Financial 
Summary 
CHINA 
Second 
Tianjin Urban Development and Environment 
Project 
Financial 
Analysis 
of 
Tianjin 
Sewerage 
Sector 
Financing 
Source 
China 
Development 
Bank 
World 
Bank 
(Shuanglin 
+ 
Network) 
JBIC 
(Xianyanglu 
+ 
Jizhuangzi 
+ 
Network) 
ADB 
(Beicang 
+ 
Network) 
TMG 
and 
Additional 
Loans 
Total 
1. 
Sector 
Context 
Amount 
(Million 
Yuan) 
% 
of 
Total 
740 
18% 
68 
1 
17% 
446 
11% 
209 
5% 
2029 
49% 
4105 
100% 
1. 
Tianjin Municipality 
is 
embarking 
on 
a massive 
capital 
investment 
plan 
to 
expand 
the 
sewerage 
system 
over 
the next 
five 
years. 
The program 
includes expanding and 
separating 
stormwater and 
wastewater 
collection 
systems, 
construction 
of 
three 
new 
wastewater treatment plants, 
and 
upgrading 
of 
one 
existing plant. 
The 
capital 
investment 
program 
and 
financing 
sources are 
summarized 
below: 
Table 
1 
: 
Five 
Year Capital 
Investment 
Summary 
I 
Investment 
(Million 
RMB) 
I2002 
I2003 
I2004 
I2005 
I2006 
1 
Total 
I 
3. 
With 
the acceleration 
of 
the 
facility 
construction, 
the 
institutional 
framework 
for 
sewerage 
in 
Tianjin 
is 
also 
in 
a process 
of 
radical 
transformation. 
In 
1996 
operational functions 
of 
the 
Drainage 
Division 
of 
the 
Municipal 
Engineering Bureau 
was separated 
into 
a 
newly 
formed, 
fully 
state-owned 
Tianjin 
Drainage Company 
(TDC). 
TDC 
was 
responsible 
for 
stomwater 
and 
drainage 
collection,  and 
also managed 
two 
existing 
wastewater treatment 
plants 
(Jizhuangzi 
and 
Dongjiao) 
which 
operated 
as 
semi-independent entities. 
In 
2000, 
the 
Tianjin 
Municipal 
Government 
(TMG) 
made 
the decision 
to 
"commercialize" 
the wastewater treatment 
function. 
While 
the 
collection 
system was 
left 
with 
TDC, 
the 
two 
existing 
treatment 
plants 
were 
transferred 
to 
a 
new 
company, 
ChuangYe 
Environmental Protection 
Co. (CYE), 
with 
the 
initial 
capital 
of 
about 
Y 
1.1 
billion 
reflecting 
the value 
of 
the 
two 
WWTPs 
and 
additional 
minor 
assets. 
Of 
1.33 
million 
outstanding 
shares 
of 
CYE, 
63% 
is 
owned 
by 
TMG, 
through the 
Tianjin 
Municipal 
Investment Company 
Limited 
(TMICL). 
Of 
the 
rest, 
a 
large part 
was 
owned 
by 
the 
owners 
of 
another, 
defunct 
company whose 
listings 
in 
Hong Kong 
and 
Shanghai 
stock 
exchanges 
was 
-51 
- 
Page  56
taken over 
by 
CYE. 
Approximately 
25.5% 
are 
publicly 
traded 
on 
the 
Hong 
Stock Exchange, 
and 
8.5% 
on 
the Shanghai stock 
exchange. 
TMG’s 
intended 
to 
have 
CYE 
finance, 
own, 
and operate 
the 
new 
WWTPs coming 
on 
stream, 
for 
which 
half 
of 
the 
financing 
had 
been 
arranged. 
4. 
On 
taking 
over the 
WWTPs 
in 
2000, 
CYE 
and 
TMG 
(through 
TDC) 
entered 
into 
a 
“Sewage 
Processing 
Agreement” 
for 
Jizhuangzi and 
Dongjiao 
plants. 
The 
Agreement 
is 
essentially 
a 
cost-pass 
through 
contract, 
including 
depreciation, 
with 
a 
15% 
rate 
of 
return 
on 
net 
fixed 
assets 
(NFA). 
The 
Bank 
team’s 
projections indicate 
that 
these 
terms 
if 
adopted 
for 
all 
WWTPs 
as 
well 
as 
some 
collection 
system 
as 
currently 
considered, 
will 
result 
in 
a 
high 
cost 
of 
sewerage 
services 
unaffordable 
to 
the users 
and 
the 
government. 
The 
projections 
show that, after 
the 
completion 
of 
the 
system expansion 
in 
about 
2006, 
the 
cost 
of 
collection 
and 
treatment 
will 
be 
about 
Y 
6lm3, 
in 
comparison 
with 
the 
pre-CYE 
cost 
of 
about 
Y 
lfm3. 
On 
the 
other 
hand, 
if 
the 
return 
on 
NFA 
were 
adjusted 
to 
equal 
the cost 
of 
funds 
to 
CYE 
(or other 
commercial 
WWTP 
operator), about 
6.5%, 
and 
no 
collection 
system 
would 
be 
included 
in 
CYE’s 
asset 
base, 
the cost 
would 
be 
about 
Y 
2.51m3. 
TMG 
agrees 
with 
the 
need 
to review 
its 
initial 
intention 
and 
agrees 
to 
conduct 
a 
thorough 
review 
options 
to 
finance 
and 
operate 
the 
expanded 
sewerage system. 
5. 
that 
sewerage 
tariffs 
to 
be 
charged 
to 
consumers 
should 
be 
determined 
so 
as 
to 
recover 
full 
operating, 
maintenance, 
and 
depreciation 
costs, 
consistent 
with 
the 
1999 
Circular 
of 
the 
central government. 
Projected 
tariff 
requirements 
on 
this 
basis 
are 
shown 
below: 
Under 
the current 
circumstances, also 
in 
view 
of 
the 
currently 
low 
level 
of 
tariffs, 
it 
was agreed 
Table 
3: 
Projection 
of 
Sewerage 
Costs 
and 
Average 
Unit 
Tariffs 
- 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
Sewers 
92 
98 
104 
111 
118 
126 
135 
143 
153 
163 
Treatment 
__ 
60 
61 
96X159162164166169172 
SubtotalO&M 
153 
159 
200 
256 
278 
288 
299 
310 
322 
335 
Sewers 
43 
61 
77 
91 
97 
97 
96 
96 
96 
95 
Treatment 
__-_ 
32 
45 
77 
87108110111112114115 
SubtotalDepreciation 
75 
106 
153 
177 
206 
207 
208 
208 
209 
210 
O&M 
Costs 
Depreciation 
Costs 
Total 
Cost 
of 
Sewerage 
228 
265 
354 
433 
483 
495 
506 
518 
531 
545 
~a~er~upp~(~C~~r~ 
300 
305 
309 
314 
318 
323 
328 
333 
338 
343 
0.8 
0.9 
1.1 
1.4 
l.s 
1,6 
1.6 
1.6 
Unit 
Cost, 
Yim3 
-__.__- 
6. 
operating 
companies, 
requiring 
TMG 
subsidies 
which 
are 
projected 
to 
be 
about 
15% 
of 
its 
infrastructure 
budget. 
This 
level 
of 
TMG 
expenditures, 
while 
far 
higher 
than the 
8% 
of 
the 
infrastructure 
budget 
now 
allocated 
for 
sewerage subsidies, appear 
sustainable 
and 
also 
inevitable 
in 
view 
of 
the drastic expansion 
of 
sewerage. 
The 
remainder 
of 
this 
Annex 
describes 
details 
of 
financial 
projections 
of 
the 
required 
payments 
to TDC 
and 
CYE 
(or 
its 
equivalent) 
and 
required 
TMG 
subsidies. 
These 
projected 
revenues 
from 
this 
tariff 
basis 
would fall 
short 
of 
the 
projected 
payments 
to 
2. 
Principal 
Assumptions 
Used 
in 
Financial 
Analysis: 
1. 
A 
sector-wide ten-year 
financial 
analysis 
has 
been 
undertaken. 
The 
TDC 
will 
own 
and 
operate 
the 
stormwater 
and wastewater 
collection 
assets, 
and 
CYE 
will 
own 
and 
operate 
all 
the 
wastewater 
treatment plants. 
The 
sector revenue 
needs 
will 
thus 
be 
a 
combination 
of 
CYE 
and 
TDC 
requirements, 
The 
revenue 
sources 
include 
a 
combination 
of 
wastewater 
tariffs 
and 
TMG 
general 
fund 
payments. 
The 
principle 
assumptions 
are 
outlined 
below. 
- 
52 
- 
Page  57
2. 
TDC 
Revenue Needs: 
A 
“cash-needs” 
approach was 
assumed 
for 
TDC, 
which would 
ensure 
that 
revenues 
are 
sufficient 
to 
recover 
total 
cash 
needs 
for 
each 
year. 
Basic 
revenue 
requirement 
components 
of 
the 
cash-needs 
approach 
include 
O&M, 
debt-service requirements 
(if 
any), 
contributions 
to 
specific 
reserves, 
and 
cost 
of 
capital 
expenditures that 
are 
not 
debt-financed 
or 
contributed. 
Depreciation 
expense 
is 
not 
included. 
Liabilities 
for 
debt 
financing 
of 
major 
capital 
works 
will 
be 
assumed 
by 
TMG, 
and 
it 
is 
assumed that 
TDC 
accounts 
for 
major 
capital works 
as 
contributions 
from 
TMG. 
The 
“cash-needs” 
approach 
is 
one 
of 
two 
revenue 
requirement 
methodologies accepted 
by 
the 
American 
Water 
Works 
Association 
(AWWA), 
and 
the 
most 
common 
approach 
for 
publicly-owned 
water 
utilities. 
TDC’s 
capital 
renewal 
rates are 
modeled 
to 
be 
2% 
of 
net 
fixed 
assets, 
or 
around 
60-70 
million 
Y/yr 
after 
2005. 
TDC 
has a 
large 
backlog 
of capital 
spending 
to 
renew 
existing 
infrastructure, 
and 
capital renewal 
investments 
should 
ideally 
be 
greater. 
However, 
given 
the 
large 
new 
capital 
investment 
program 
underway 
in 
Tianjin, 
and 
the 
limited 
financial 
resources 
available 
to 
the 
sector, 
it 
was deemed 
prudent 
to model 
a 
relatively 
low 
level 
of 
capital renewal 
spending. 
Financing 
Source 
China 
Dev. 
Bank 
3. 
approach 
accepted 
by 
the 
AWWA 
and 
most common 
approach 
to 
investor-owned regulated utilities, 
is 
applied 
to 
CYE. 
The 
revenue 
requirements 
include 
O&M, 
depreciation, 
taxes, 
and 
return 
on 
rate 
base. 
The 
return 
on 
rate 
based 
is 
assumed 
to 
be 
equal 
to 
CYE’s 
cost 
of 
capital, 
which 
is 
estimated at 
6.5%. 
CYE’s capital 
structure 
(60% 
debt, 
40% 
equity), 
cost 
of 
equity 
(lo%), 
and 
dividend 
payout 
ratio 
(60%) 
are 
based 
on 
averages 
for 
investor owned 
utilities 
in 
the 
United 
States 
from 
1965-1996. 
CYE 
Revenue 
Needs: 
A 
“utility 
approach”, 
which 
is 
the second 
revenue 
needs 
methodology 
Amount 
cost 
Weighted 
Y 
mil. 
YO 
%Nr 
cost, 
%iyr 
518 
15 
6.2% 
0.93% 
4. 
It 
is 
assumed 
that 
TCMC 
undertakes the 
construction 
program 
for 
wastewater treatment 
plants 
on 
behalf 
of 
CYE. 
CYE 
makes payments 
to 
TCMC 
during 
the 
construction 
phase, 
and the 
treatment 
plants 
and 
associated 
liabilities 
are 
transferred 
to 
CYE 
when construction 
is 
completed, 
and 
assuming 
an 
appropriate 
regulatory 
structure 
is 
in 
place. 
Foreign 
exchange 
risks 
are 
not 
incorporated 
into 
the 
model. 
Table 
5 summarizes 
the 
forecasts. 
The 
cost 
of 
capital 
estimate 
is 
based 
on 
the 
following: 
World 
Bank 
ADB 
JBIC 
Other 
Loans 
Equity 
Total 
420 
12 
3.0% 
0.36% 
180 
5 
3.0% 
0.15% 
3 
12 
9 
0.8% 
0.07% 
800 
23 
6.0% 
1.38% 
1300 
3 
7% 
10.0% 
3.70% 
3530 
6.50% 
4. 
Revenue 
Source 
1: 
Drainage Tar@: 
As 
discussed 
in 
1.5 
above. 
5. 
Revenue 
Source 
2: 
TMG 
Contrj~ution: 
Drainage tariffs, 
which 
are based 
on 
O&M 
and 
depreciation 
costs, 
may 
not 
be sufficient 
to 
cover 
TDC 
and 
CYE 
revenue 
needs 
every 
year. 
The 
TMG, 
through 
its 
general 
fund, 
will 
cover any 
revenue 
shortfalls. 
3. 
Summary of 
Revenue 
Needs 
and 
Sources 
Table 
5 
summarizes 
the 
10-year revenue 
forecasts. 
The 
drainage 
tariffs 
need 
only 
cover 
sector 
O&M 
and 
depreciation 
costs. 
TMG 
needs 
to 
make 
additional contributions 
to 
the 
two 
utilities, 
primarily 
to 
cover 
CYE’s 
cost 
of 
capital and 
taxes. 
- 
53 
- 
Page  58
Table 
5: 
Sewerage 
Payments 
Due 
and 
Revenue 
Sources 
(Y 
Million 
RMB) 
* 
Assumptions: 
Dividends 
= 
60% 
of 
net 
income; 
63% 
of 
this 
to 
TMG; 
50% 
of 
income 
and 
business taxes 
kept 
by 
TMG, 
rest 
to the 
central 
government. 
4. 
TDC 
Financial 
Analysis 
Table 
6: 
Summary 
of 
TDC 
Financial 
Analvsis 
in. 
Million 
Yuan 
Summary 
Operating 
and 
Financial 
Statistics 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
Total 
Assets 
1,459 
2,039 
2,580 
3,045 
3,276 
3,259 
3,243 
3,231 
3,222 
3,205 
Current 
Ratio 
3.34 
3.39 
3.37 
3.35 
3.41 
3.34 
3.33 
3.37 
3.39 
2.45 
Return 
on 
Assets (ROA) 
0.0% 
-1.0% 
-0.9% 
-0.9% 
-0.9% 
-0.6% 
-0.5% 
-0.4% 
-0.3% 
-0.5% 
Income Statement 
I 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
‘Net Operating Revenues 
136 
139 
157 
173 
185 
205 
215 
227 
239 
241 
Operating 
Expenses 
92 
98 
104 
111 
118 
126 
135 
143 
153 
163 
Wastewater 
65 
69 
73 
78 
83 
89 
95 
101 
108 
115 
Stormwater 
27 
29 
31 
33 
35 
37 
40 
43 
45 
48 
Buisness 
Taxes 
EBITDA 
44 
41 
53 
62 
67 
79 
80 
84 
86 
78 
Depreciation 
43 
61 
77 
91 
97 
97 
96 
96 
96 
95 
Interest 
& 
Finance 
Fees 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
EBT 
0 
(20) 
(24) 
(29) 
(31) 
(18) 
(16) 
(12) 
(10) 
(17) 
EARNINGS 
0 
(20) 
(24) 
(29) 
(31) 
(18) 
(16) 
(12) 
(10) 
(17) 
Income 
Taxes 
- 
54 
- 
Page  59
Cash Flow Statement 
I 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
Net 
Income Before Interest 
0 
(20) 
(24) 
(29) 
(31) 
(18) 
(16) 
(12) 
(10) 
(17) 
Add: 
Depreciation 
Exp 
43 
61 
77 
91 
97 
97 
96 
96 
96 
95 
Operating 
Cash 
Flow 
44 
41 
53 
62 
67 
79 
80 
84 
86 
78 
Add: 
Beginning 
Cash 
26 
6 
6 
7 
7 
8 
9 
9 
9 
10 
Working 
Cap 
fncrease/(Decr) 
36 
0 
1 
1 
1 
1 
1 
1 
1 
(9) 
Total 
Debt Service 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
CASHAFTERDEBTSERVICE 
34 
46 
58 
68 
73 
86 
88 
92 
95 
97 
CAPITALINVESTMENTREQUI 
168 
639 
616 
553 
326 
77 
80 
82 
85 
87 
NewCapitalWorks 
139 
599 
565 
493 
261 
13 
15 
18 
21 
24 
CapitalRenewal 
29 
40 
51 
60 
65 
65 
64 
64 
64 
64 
Capital Investments 
168 
639 
616 
553 
326 
77 
80 
82 
85 
87 
Add: 
Cash Ending Balance 
6 
6 
7 
7 
8 
9 
9 
9 
10 
10 
FINANCINGREQUIREMENTS 
139 
599 
564 
493 
261 
0 
0 
(0) 
(0) 
0 
Funds From Loans 
& 
OtherSc 
0 
0 
0 
0 
0 
0 
0 
0 
0 
0 
TOTAL CASH 
SURPLUSI(DEF1i 
(0) 
0 
0 
0 
0 
(0) 
(0) 
0 
0 
(0) 
FUNDS 
FROM 
LOANS 
TMG 
Equity 
139 
599 
565 
493 
261 
- 
Balance 
Sheet 
I 
2002 
2003 
2004 
2005 
2006 
2007 
2008 
2009 
2010 
2011 
ASSETS 
FIXED 
ASSETS 
Plant 
in 
Service 
1,618 
2,257 
2,873 
3,426 
3,752 
3,829 
3,909 
3,991 
4,076 
4,163 
Less: Acc. 
Depreciation 
177 
238 
315 
405 
503 
600 
696 
792 
888 
983 
TOTAL 
FIXED 
ASSETS 
1,440 
2,019 
2,558 
3,021 
3,250 
3,230 
3,213 
3,199 
3,188 
3,180 
TOTAL CURRENT 
ASSETS 
19 
20 
22 
24 
26 
29 
30 
32 
34 
25 
TOTAL 
ASSETS 
1,459 
2,039 
2,580 
3,045 
3,276 
3,259 
3,243 
3,231 
3,222 
3,205 
LIABILITIES 
8 
NET 
WORTH 
EQUITY 
Capital 
Account 
1,453 
2,052 
2,617 
3,110 
3,371 
3,371 
3,371 
3,371 
3,371 
3,371 
Retained 
Earnings 
0 
(19) 
(43) 
(72) 
(103) 
(121) 
(137) 
(149) 
(159) 
(176) 
TOTAL 
NET 
WORTH 
1,454 
2,033 
2,574 
3,038 
3,268 
3,250 
3,234 
3,222 
3,212 
3,195 
TOTAL BORROWINGS 
TOTAL CURRENT 
LIABILITIES 
6 
6 
7 
7 
8 
9 
9 
10 
10 
10 
TOTAL 
LIABS. 
& 
NET 
WORTH 
1,459 
2,039 
2,580 
3,045 
3,276 
3.259 
3,243 
3.231 
3.222 
3.205 
- 
55 
- 
Page  60
Table 
7: 
CYE 
Financial 
Forecasts: 
Million 
Yuan 
OPERATING 
INDICATORS 
2002 
1 
2003 
1 
2004 
2005 
2006 
2007 
' 
2008 
2009 
2010 
' 
2011 
___- 
WaterConsumption(MCMNr) 
300 
305 
309 
Operating 
Revenues 
1 
198 
261 
433 
i 
- 
56 
- 
314 
3181 
323 
328 
333 
3381 
343 
515 
624 
607 
1 
604 
' 
613 
623 
633 
I 
I 
I 
Operating 
Expenses 
61 
63 
104 
162 
184 
I 
193 
203 
213 
224 
236 
I 
FINANCIAL RATIOS 
I 
Pro~ta~i/ity 
Ratios 
~ 
Allowed 
Rate 
of 
Return 
1 
6.5% 
ReturnonShareCapital 
j 
6% 
9%/ 
14% 
13% 
16% 
Return 
on 
Equity 
(ROE) 
1 
5.0% 
7.5%/ 
11.4% 
9.9% 
12.2% 
I 
12% 
11%/ 
11%' 
12% 
8.7%' 
7.3%/ 
7.3%/ 
7.3%/ 
7.4% 
Return on 
Assets 
3.6% 
Profit Margin 
32.2% 
4.2% 
5.l%i 
4.2% 
5.1% 
3.8% 
3.4% 
3.6%, 
3.8% 
4.1% 
37.7% 
36.5% 
27.8% 
29.7% 
22.5% 
19.4% 
19.8% 
20.2% 
20.6% 
Financial 
Leverage 
1.4 
1.81 
2.3 
2.4 
2.4 
2.3 
Financing Ratios 
I 
2.1 
2.0 
1.9 
1.8 
Current 
Ratio 
16.09 
8.89 
15.52 
1 
12.36 
1 
12.15 
10.60 
2.95 
i 
1.57 
0.97 
0.61 
1 
2002 
1 
2003 
i 
2004 
2005 
2006 
'Operating 
Revenues 
1981 
2611 
4331 
5151 
624 
Operating Expenses 
61 
' 
63 
~ 
104 
162 
1 
184 
Buisness 
Taxes 
I 
10 
13 
22 
26 
' 
31 
EBITDA 
127 
185 
308 
1 
327 
409 
Depreciation 
32 
45 
1 
77 
1 
87 
108 
EBIT' 
95 
139 
' 
231 
1 
240 
' 
301 
I 
I 
I 
Interest 
& 
Finance 
Fees 
1 
-! 
-' 
32 
1 
28 
Interest Income 
on 
Short 
Term 
C 
0 
8 
5 
51 
4 
, 
EBT 
95 
1 
147 
1 
236! 
213 
276 
Income 
Taxes 
31 
' 
48 
1 
78 
70 
91 
EARNINGS, 
64 
98, 
158 
143 
I 
185 
2007 
1 
2008 
2009 
2010 
2011 
607 
604 
6131 
6231 
633 
193 
203 
213 
224 
236 
30 
30 
31 
31 
32 
383 
370 
369 
367 
366 
110 
111 
1 
112' 
114 
i 
115 
273 
1 
259 
' 
256 
' 
254 
251 
75 
88 
1 
78 
! 
68 
1 
57 
5 
3 
31 
21 
1 
6o 
I 
204 
1 
175 
181 
' 
188 
195 
62 
64 
136, 
117 
i 
121 
I 
126 
I 
131 
67 
' 
58 
1 
Page  61
Cash 
Flow 
Statement 
2002 
1 
2003 
2004 
2005 
1 
2006 
2007 
2008 
1 
2009 
2010 
1 
2011 
I 
OPERATIONS 
~ 
Net 
Income Before Interest 
I 
64 
98 
158 
1 
175 
1 
214 
211 
205 
200 
194 
1 
188 
Add: 
Depreciation 
Exp 
32 
1 
45 
77 
87 
108 
110 
1 
111 
112 
114 
115 
Operating 
Cash 
Flow 
95 
144 
235 
262 
322 
321 
316 
312 
308 
303 
Add: 
Beginning Cash 
1 
260 
33 
1 
44 
481 
57 
69 
67 
67 
68 
69 
Working 
Cap 
Increase/(Decr) 
18 
1 
(12) 
16 
9 
7 
052) 
-( 
1 
07) 
CASHBEFOREDEBTSERVICE 
~ 
338 
189 
263 
300 
371 
390 
433 
429 
428 
479 
DEBT SERVICE 
~ 
I 
I 
- 
Interest 
Charges 
32 
28 
75 
88 
78 
68 
57 
I 
I 
1- 
Principal Repayments 
61 
1 
65 
144 
1 
181 
, 
190 
200 
211 
Total Debt Service 
CASH AFTER 
DEBT SERVICE 
1 
338 
189 
263 
207 
I 
278 
171 
1 
165 
161 
' 
159 
210 
CAPITAL 
INVESTMENT REQUIREMENTS 
I 
I 
Investment Projects 
i 
535 
645 
761 
1 
301 
249 
38 
38 
39 
39 
40 
93 
, 
93 
219 
1 
268 
~ 
268 
~ 
268 
268 
l- 
I 
I 
I 
Interest During Construction 
19, 
42 
' 
70 
57 
67 
21 
0 
0 
1 
1 
Annual 
Capital Investment 
1 
554 
687 
830 
358 
315 
59 
38 
39 
40 
40 
Add: 
Cash 
Ending 
Balance 
33 
44 
48 
57 
1 
69 
67 
67 
68 
69 
70 
FINANCING 
REQUIREMENTS 
249 
1 
542 
616 
I 
208 
1 
107 
(45) 
(59)/ 
(54)i 
(51)/ 
(100) 
FUNDS 
FROM 
LOANS 
I 
I 
Loans 
I 
477 
536 
721 
260 
236 
- 
-I 
- 
, 
, 
Equity 
Dividend Payout 
ToTALCASHSURPLUSI(DEFIC1T~ 
189 
(64) 
11 
(34) 
19 
(37) 
(11)' 
(19) 
(25) 
22 
I 
(38)' 
(5911 
(9511 
(86) 
(111) 
(82) 
(70) 
(73); 
(76)' 
(78) 
Free 
Gasn 
FIOW 
to 
tqutty 
(5) 
106 
52 
, 
130 
45 
I 
59 
54 
I 
51 
100 
I 
228 
' 
Balance 
Sheet 
- 
57 
- 
Page  62
6. 
Municipal 
Finances 
1. 
Table 
5 
presents 
the 
subsidies 
needed 
from 
TMG 
to 
fund 
the 
collection 
and 
treatment 
operations, 
after 
projected tariff 
revenues 
and 
net 
of 
revenues 
retained 
from 
CYE 
dividends 
(TMG 
owns 
63% 
CYE) 
and 
taxes. 
In 
addition, 
TMG 
will 
need 
to 
provide 
counterpart 
funding 
support 
for 
investments 
in 
the 
drainage 
collection 
network, 
as 
well 
as 
the associated debt service 
(Table 
8). 
CYE 
would 
be 
responsible 
for 
the 
debt service associated 
with 
the treatment plants. 
2. 
and 
in 
particular 
with 
budgetary expenditures 
on 
infrastructure, 
not including 
the extrabudgetary 
expenditures 
controlled 
by 
service 
entities 
and 
TCMC. 
Table 
9 
presents 
this 
analysis, 
which 
uses 
actual 
2001 
budget 
information 
and 
assumes 
that 
the 
TMG 
revenues 
will 
grow 
by 
7% 
per 
year.  Since 
TCMC 
is 
trying 
to 
control 
the 
infrastructure 
expenditures, 
an 
increase 
of 
only 
2.5% 
is 
assumed 
for 
TCMC 
budget 
growth. 
Although 
drainage services 
are 
a 
small part 
of 
TMG 
finances, 
they 
are 
a 
significant 
percentage 
of 
TCMC’s 
budgets, 
averaging around 
15% 
per 
year, 
with 
a 
significant 
demand 
between 
2003 
and 
2006, 
primarily 
for 
TDC-related 
investments. 
This 
will 
put 
a 
financial 
burden 
on 
TCMC 
and 
underscores 
the 
need 
to 
control 
costs 
closely through 
a 
regulatory 
regime. 
The total 
TMG 
financial burden 
for 
drainage services 
should be 
compared 
with 
its 
total 
revenues, 
Table 
9. 
TMG 
and 
TCMC 
Finances 
I 
tDrainaoe 
as 
% 
of 
Infra 
I 
7%1 
28%1 
28%1 
24%1 
22%1 
15%1 
15%1 
15%1 
15%1 
15%1 
7. 
Summary 
The 
financial 
forecasting 
exercise shows 
that 
the 
Tianjin 
sewerage 
investment 
program 
is 
affordable 
and 
sustainable, 
provided 
the 
following 
assumptions 
are 
respected: 
The 
wastewater treatment contracts 
is 
based 
on 
a 
return 
on 
rate 
base commensurate 
with 
its 
cost 
Drainage 
tariffs 
are 
raised 
from 
the current 
levels 
of 
0.4 
Yfm3 
(domestic) 
and 
0.6 
Yfm3 
of 
capital; 
(non-domestic) 
to 
an 
average 
tariff 
level 
of 
1.5 
Yfm3 
by 
2006. 
This 
should be sufficient 
to 
cover the 
drainage sector 
O&M 
and depreciation 
costs. 
TDC 
to 
cover 
its 
cash 
costs 
and 
honor 
its 
utility-based 
contract 
with 
CYE. 
contractual relations 
for 
TDC 
and 
CYE. 
In 
addition 
to 
tariff 
revenues, 
TMG 
provides 
supplemental 
revenue 
to 
the 
sector 
sufficient 
for 
A 
public 
utility 
regulatory regime 
is 
created 
which 
closely 
monitors 
price, 
service, 
and 
* 
Note: 
The 
financial 
forecasting models and details 
are 
contained the 
project 
file. 
- 
58 
- 
Page  63
Annex 
6(A): 
Procurement 
Arrangements 
CHINA 
Second Tianjin Urban 
Development 
and 
Environment 
Project 
Procurement 
Summary 
of 
the 
Assessment 
of 
Agencies' 
Procurement Capacity 
1, 
The 
Municipal 
Project 
Management 
Office 
(PMO) 
under the 
Tianjin 
Construction 
and 
Management 
Commission 
(TCMC) 
will 
be 
responsible 
for 
coordinating 
procurement 
for 
the 
Bank-financed activities 
in 
this 
project. 
PMO 
has 
chosen the 
China 
Intemational 
Tendering 
Company 
(CITC) 
as 
procurement 
agent 
for 
all 
Intemational 
Competitive 
Bidding 
(ICB) and 
National 
Competitive 
Bidding 
(NCB) 
for 
goods. 
Tianjin 
Engineering 
Tendering 
Center 
(TETC) 
will 
be 
the 
agent 
for 
ICB 
and 
NCB 
procurement 
of 
works. 
CITC 
and 
TETC 
were the 
procurement 
agents 
for 
the 
first 
Tianjin 
Urban 
Development 
and 
Environment Project 
and 
proved 
to 
be 
competent 
and 
experienced 
in 
Bank-financed 
procurement.  Since 
TETC 
has 
little 
experience 
in 
ICB 
works 
procurement, 
TETC 
will 
get 
assistance 
from 
CITC for 
the 
first 
2 
ICB 
contracts. 
Shopping and 
consulting-service procurement 
will 
be 
done 
by 
the 
MPMO 
and 
sub-PMOS. 
2. 
The 
assessment 
found that 
the designated 
implementing 
agencies 
(IAs) 
are capable 
of 
managing 
all 
procurement 
activities 
satisfactorily. 
Staff 
members 
who 
were 
involved 
in 
previous 
Bank-financed 
urban projects 
are 
familiar 
with 
the 
Bank's 
procurement 
procedures. 
Areas that 
need 
strengthening, 
such 
as 
bidding 
document 
preparation, have 
been 
identified 
and 
an action 
plan 
has 
been 
agreed upon. 
The 
action 
plan 
includes 
training, 
recruitment of 
experienced 
staff 
for 
PMOS, preparation and 
dissemination 
of 
a 
project 
procurement 
manual and 
sample 
forms 
for 
quotation solicitations used 
in 
shopping 
procedures, among 
other 
things. 
3. 
The 
assessment 
identified 
some 
shortcomings 
in 
the general 
procurement 
framework 
in 
China, 
including 
some 
aspects 
of 
the 
Bidding 
Law 
for 
construction 
projects that 
became 
effective 
January 
1, 
2000. 
The 
shortcomings 
include: 
a 
requirement 
for 
the 
purchaser 
to 
confirm 
in 
the 
bidding 
documents 
that 
he 
possess 
or 
secure 
sources 
of 
funding 
for 
procurement 
before 
bidding. 
a 
a broader range 
of 
channels 
to 
announce 
the 
bid 
invitation including 
newpapers, 
information 
networks, 
etc. 
a 
minimum 
time 
for 
bid 
preparation and submission 
of 
20 
days. 
a 
requirement 
for 
re-bidding 
if 
fewer 
than 
three 
bids 
are 
received. 
e 
requirement 
to reject 
bids 
lower 
than 
cost, 
but 
without 
stipluating 
the 
method 
to 
determine 
the 
cost. 
a 
evaluation 
by 
scoring 
allowed. 
4. 
These 
are 
country-wide 
issues 
which 
will 
be 
addressed 
in 
the 
ongoing 
OPR. 
Provisions 
will 
be 
incorporated 
into 
the Procurement 
Schedule 
of 
the 
Loan 
Agreement 
to confirm 
exemptions 
for 
Bank 
financed 
procurement 
from 
the 
Bidding 
Law 
of 
China 
in 
case 
of 
discrepancies 
between 
the 
Bank 
Guidelines and 
the 
Bidding 
Law. 
One 
of 
the 
concerns 
identified 
during 
the 
assessment 
is 
the 
length 
of 
GOC's 
intemal 
review 
process 
for 
IC3 
goods procurement, 
both 
before 
the 
draft 
bidding 
documents and 
bid 
evaluation 
reports 
are 
submitted 
to 
the 
Bank 
for 
review. 
The 
Mechanical 
and 
Electrical 
Product 
Import 
and 
Export 
Department 
(MEPIED) 
of 
the 
Ministry 
of 
Foreign 
Trade 
and 
Economic 
Cooperation 
(MOFTEC) 
is 
authorized 
to 
conduct 
such 
reviews and resolve 
any 
disagreement. 
The 
review period 
can be lengthy when 
disagreements arise 
among 
the 
government 
agencies 
involved 
in 
the 
review 
process. 
To 
mitigate 
this 
risk, 
procurement 
planning 
will 
incorporate 
additional 
time 
for 
the 
review 
processes. 
- 
59 
- 
Page  64
Procurement 
Arrangements 
5. 
Procurement 
Plan. 
A 
procurement 
plan 
has 
been 
prepared 
using 
Microsoft 
Project 
and 
is 
included 
in 
the 
Project Implementation Plan 
(PIP). 
The 
procurement packaging 
plan 
has 
been 
prepared 
taking 
into 
consideration 
the 
prospective capabilities 
of 
the contractors 
and 
suppliers at 
home and 
abroad, 
as 
well 
as 
capabilities 
of 
the 
employers' 
project 
management. 
6. 
Procurement 
procedures. 
The 
following Bank 
guidelines 
will 
govern 
all 
Bank-financed 
procurement under 
the project: 
For 
goods 
and 
works. 
Procurement 
under 
IBRD 
Loans 
and 
IDA 
Credits 
(dated January 
1995 
and 
revised 
in 
January 
and 
August 
1996, 
September 
1997 
and 
January 
1999). 
The 
bidding 
documents 
will 
clearly 
specify 
qualification 
requirements, 
for 
post-qualification 
of 
bidders. 
The 
use 
of 
post- 
instead 
of 
pre-qualification 
under the 
first 
Tianjin 
Urban 
Development and 
Environment Project helped 
reduce 
the 
time 
taken 
for 
the 
bidding 
processes 
without 
risk. 
For 
the 
selection 
of 
consultunts. 
Selection 
and 
Employment 
of 
Consultants 
by 
World 
Bank 
Borrowers 
(dated January 
1997 
and revised 
September 
1997, 
January 
1999 
and 
May 
2002). 
7. 
Format 
of 
the 
Documentation. 
The 
following 
formats 
will 
apply: 
Evaluation 
reports. 
The 
Bank's Standard 
Bid 
Evaluation 
Form, Procurement 
of 
Goods 
or Works 
(dated 
April 
1996, 
translated 
into 
Chinese 
by 
MOF 
May 
1997), 
and 
Sample 
Form 
of 
Evaluation 
Report 
for 
Selection 
of 
Consultants (dated 
October 
1999). 
Model 
Bidding 
Documents. 
The 
Bank-approved 
Chinese 
Model 
Bidding 
Documents 
(MBD) 
(dated 
May 
1997, 
prepared 
by 
MOF 
based 
on 
the 
Bank's Standard 
Bidding 
Documents 
(SBDs) 
will 
be 
adopted 
for all 
ICB 
and 
NCB 
activities 
for 
goods 
and 
works. 
Project-Specific 
Document. 
A 
model 
procurement 
document 
for 
goods 
using 
shopping 
procedures 
will 
be 
prepared 
and 
used 
by 
the 
procurement 
agency. 
Revisions 
to 
Model 
Bidding 
Documents. 
The 
amendments 
included 
in 
the 
Bank's updated 
Standard 
Bidding 
Documents (SBD) 
for 
Procurement 
of 
Goods (dated January 
1995 
and 
revised 
March 
2000 
and 
January 
2001), 
which 
have 
not 
yet 
been 
included 
in 
the 
MBD, 
dated 
May 
1997, 
will 
be incorporated 
into 
the 
bidding 
documents 
used 
for 
goods contracts. 
SBD 
for 
Supply 
and 
Installation 
of 
Plant and Equipment 
will 
be 
used 
for 
procurement 
of 
the 
wastewater treatment 
plant, 
wastewater 
reclamation 
plants, 
and 
the area 
traffic 
control 
system. 
8. 
Domestic Preference. 
For 
goods contracts, 
qualified 
domestic bidders 
will 
be 
eligible 
for 
a 
preference equal 
to 
15 
percent 
of 
the 
cost, 
insurance 
and 
freight 
(CIF) price, 
or 
the 
sum 
of 
the 
customs duties 
and 
import 
tax 
payable 
by 
a 
nonexempt importer, whichever 
is 
less. 
For 
works, there 
will 
be 
no 
preference 
for 
domestic contractors 
as 
China's 
GDP 
has exceeded 
the 
Bank 
determined 
threshold. 
9. 
Advertisement. 
The 
General 
Procurement 
Notice 
(GPN) was 
published 
in 
the 
United 
~a~ions 
Development 
Business 
(UNDB), 
Issue 
No.587 
of 
31 
July 
2002, 
and 
will 
be 
updated every 
year 
until 
all 
major 
ICB 
procurement 
activities 
and 
major 
consultant 
assignments have 
been 
completed. 
Specific 
Procurement 
Notices 
(SPNs) 
for 
all 
ICB 
and 
NCB 
procurement 
activities 
will 
be 
published 
- 
60 
- 
Page  65
in 
at 
least 
one 
newspaper 
with 
a 
national 
circulation. 
In 
addition, the 
SPNs 
for 
contracts 
estimated 
to 
cost 
more 
than 
$10 
million 
will 
be 
published 
in 
the 
UNDB, 
allowing 
at 
least 
45 
days 
for 
bid 
preparation. 
The 
bid 
preparation 
period 
for 
those above $15 
million 
will 
be 
normally 
75 
days, 
and 
in 
no 
case 
less 
than 
60 
days 
for 
contracts 
that 
are 
not 
considered complex 
and 
which do not 
require 
site 
investigations. 
Similarly, 
invitations 
for 
expressions 
of 
interest 
for 
consulting 
contracts expected 
to 
cost 
more 
than 
$200,000 
equivalent 
will 
be advertised 
in 
the 
UNDB 
at 
least 
thirty 
days 
before 
the 
preparation 
of 
the 
short 
list, 
Procurement Methods 
(Table 
A) 
10. 
A 
total 
of 
$276 
million 
of 
works 
and 
goods 
is 
expected 
to 
be financed 
under 
the project, 
using 
the 
following 
procedures: 
Works: 
ICB. 
About 
$64 
million 
of 
works, 
in 
four 
contracts 
worth 
between 
$15- 
45 
million, 
will 
be 
procured 
using 
ICB 
procedures. 
This 
represents 
27 
percent 
of 
total works 
procurement. 
These 
larger works 
contracts 
will 
be 
for 
construction 
of 
wastewater treatment 
plants 
and 
traffic 
interchanges. 
NCB. 
About 
$160 
million 
of 
works 
for 
construction 
of 
interceptor 
sewers 
and 
pumping 
stations, wastewater treatment 
plants and canal 
dredging 
and 
rehabilitation, 
etc. 
estimated 
to 
cost 
between 
$100,000 
and 
$15,000,000 
per 
contract 
will 
be 
procured 
using 
NCB 
procedures. Those contracts 
would not be 
of 
interest 
to 
foreign 
contractors. 
Small 
Works. 
Other miscellaneous 
civil 
works 
for 
minor road 
intersections 
rehabilitation, 
equipment 
installations, 
etc. estimated 
to 
cost less 
than 
$100,000 
per 
contract, 
with 
an 
aggregate 
amount 
not 
exceeding 
$7,000,000, 
will 
be 
procured 
following 
a comparison 
of 
at 
least three 
quotations at 
competitive prices 
as 
stated 
in 
Articles 
3.5 
and 
3.6 
of 
the guidelines. 
Goods: 
ICB. 
About 
$3 
1 
million 
worth 
of 
equipment, 
including four 
packages 
worth 
between 
$4.3-7 
million, 
will 
be 
procured 
using 
ICB 
procedures, 
for 
a 
wastewater treatment 
plant, 
two 
wastewater 
reclamation 
plants, 
a 
traffic control 
system, 
etc. 
This 
represents about 70% 
of 
total 
procurement 
of 
goods, 
which 
will 
be 
combined 
with 
installation 
services. 
NCB. 
Equipment 
and materials 
estimated 
to 
cost 
between 
$100,000 
and 
$500,000 
per 
contract 
will 
be procured 
using 
NCB 
procedures, 
up 
to 
an 
aggregate 
of 
$1 
1 
million. 
Those 
contracts 
would 
not 
be 
of 
interest 
to 
foreign 
suppliers. 
Shopping. 
Other 
minor 
items 
which 
are 
readily 
available 
off-the-shelf 
and 
estimated 
to 
cost 
less 
than 
$100,000 
per 
contract, 
with 
an 
aggregate 
amount 
not 
exceeding 
$3,000,000, 
will 
be 
procured 
following 
national 
shopping 
procedures 
as 
stated 
in 
Articles 
3.5 
and 
3.6 
of 
the 
guidelines. 
National 
shopping 
will 
also 
be 
on 
the 
basis 
of 
a comparison 
of 
at 
least three 
quotations 
and 
may 
be 
used 
where 
the 
desired 
goods are 
ordinarily 
available 
from 
more than 
one source, 
at competitive 
prices. 
12. 
Consulting 
Services 
and 
Training. 
The 
value 
of 
all 
consulting 
services 
to 
be 
procured 
is 
estimated 
to 
be 
about 
S25 
million, 
including 
design, 
supervision, 
and 
management 
expenses, 
most 
of 
which 
will 
not 
be 
financed 
by 
the Bank.  Consultant 
services 
estimated 
to 
cost about 
$4.5 
million 
and 
- 
61 
- 
Page  66
training 
to 
cost 
about 
$0.4 
million 
will 
be 
financed 
by 
the 
Bank 
except 
for 
taxes 
and 
duties, 
estimated 
at 
9% 
of 
the 
total 
cost. 
Four 
contracts 
for 
about 
$2.6 
million 
will 
be 
procured 
under 
Quality 
and 
Cost-Based 
Selection 
(QCBS) procedures. 
Two 
contracts 
for 
review 
of 
institutional 
options 
for 
the 
sewerage 
and 
transportation 
management, 
estimated 
to 
cost about 
$900,000 
and 
$400,000, 
respectively, 
will 
be 
procured through 
Quality 
Based 
Selection 
(QBS). 
In 
addition, about 
$270,000 
in 
small 
assignments 
such 
as 
data 
collection 
and 
system 
upgrade 
supports, 
not 
exceeding 
$100,000 
per 
contract, 
will 
be 
procured 
under 
Consultants 
Qualifications 
(CQ] and 
$280,000 
under 
Individual 
Consultant 
Selection. 
Another 
$420,000 
will 
be 
used 
for 
seminars 
and 
training. 
Total 
13. 
Retroactive 
financing. 
Retroactive 
financing 
of 
up 
to 
$15 
million 
may 
be 
applied 
to 
expenditures 
made 
after 
August 
3 
1,2002 
for 
the 
procurement 
of 
works and 
goods, 
consistent 
with 
the 
procurement 
Guidelines. 
Procurement methods 
(Table 
A) 
(0.00) 
(0.00) 
(1.50) 
(0.00) 
94.56 
172.05 
15.88 
53.01 
Table 
A 
Project Costs 
by 
Procurement Arrangements 
(US$ 
million equivalent) 
(5 
7.94) 
(80.88) 
(11.18) 
~ 
(0.00) 
Total Cost 
230.51 
(100.74) 
45.61 
33.47 
24.4 
1 
1.50 
(1.50) 
335.50 
(150.00) 
(43.33) 
(4.43) 
(0.00) 
Figures 
in 
parentheses 
are 
the 
amounts 
to 
be 
financed 
by 
the 
Bank 
Loan. 
All 
costs 
include 
contingencies, 
2! 
Includes 
civil 
works 
and 
goods 
to 
be procured 
through 
shopping, 
consulting 
services, 
and 
training 
- 
62 
- 
Page  67
Table 
AI 
: 
Consultant Selection 
Arrangements 
(optional) 
(US$ 
million equivalent) 
i\ 
Including 
contingencies 
Note: 
QCBS 
= 
Quality- and Cost-Based Selection 
QBS 
= 
Quality-based 
Selection 
SFB 
= 
Selection 
under a 
Fixed 
Budget 
LCS 
= 
least-Cost 
Selection 
CQ 
= 
Selection 
Based 
on 
Consultants' Qualifications 
Other 
= 
Selection 
of 
individual 
consultants (per Section 
V 
of Consultants Guidelines), Commercial 
Practices, etc. 
N.B.F. 
= 
Not Bank-financed 
Figures 
in 
parentheses are 
the 
amounts to 
be 
financed by the 
Bank 
loan. 
- 
63 
- 
Page  68
Prior review 
thresholds 
(Table 
B) 
Bank's 
Prior 
Review will 
be 
required 
of: 
all 
contracts 
for works estimated 
to 
cost 
$5,000,000 
equivalent 
or 
more per 
contract; 
all contracts for 
works for 
Dagu 
(and 
Xinfeng) 
Canal 
dredging regardless of 
cost; 
all contracts for 
goods estimated 
to 
cost 
$300,000 
equivalent 
or 
more per 
contract; 
all contracts 
for consultant firm services estimated 
to 
cost 
$300,000 
equivalent 
or more; 
and 
individual 
consultant services 
to 
cost 
$50,000 
equivalent 
or more. 
All 
other 
contracts 
for 
works, 
goods and services will be subject 
to 
ex 
post review. 
About 
15% 
of 
such contracts 
will be sampled 
for 
ex 
post 
review. 
Less 
than 
100 
Equal 
to 
or 
Above 
500 
Table 
B: 
Small 
Works 
ICB 
Expenditure 
Category 
Less 
than 
500 
but 
equal 
to 
or 
above 
100 
below 
100 
Equal 
to 
or 
above 
300 
(firms) 
less 
than 
300 
(firm) 
Less 
than 
100 
(firm) 
Individual 
1. 
Works 
Not 
including 
those 
for 
Dagu 
Canal Rehabilitation 
NCB 
NS 
QCBS 
or 
QBS 
QCBS 
CQ 
Other 
2. 
Goods 
3. 
Services 
Thresholds 
for Procurement Methods 
and 
Prior Review' 
I 
Equal 
to 
or 
Above 
15,000 
Equal or Above 
100 
and 
Less 
than 
15,000 
NCB 
I 
All 
contracts 
($64 
M) 
All 
contracts above 
$5 
milllion 
and 
all 
contracts 
For 
Dagu 
canal 
remediation 
regardless 
of 
value 
($1 
12M) 
All 
contracts 
($3 
1 
M) 
All 
contracts above 
$300,000 
($12 
M) 
All 
contracts 
($3.1 
M) 
- 
All 
contracts 
equal 
to 
or 
above 
S50,OOO 
(S0.2 
M) 
Total value 
of 
contracts 
subject 
to 
prior review: 
Frequency 
of 
procurement 
supervision 
missions 
proposed: 
$222 
million 
One 
every 
6 
months 
(includes special procurement supervision 
for 
post-reviewlaudits) 
Overall Procurement 
Risk Assessment: 
Average 
Most 
of 
the procurement 
review 
will 
be 
handled 
by 
procurement 
specialists 
of 
the 
Bank's 
Beijing 
office, 
except for 
review 
of 
documents 
for 
Dagu 
canal 
rehabilitation 
and 
consultant 
services, 
which 
will 
be 
carried 
out 
by 
the 
project 
team 
regardless 
of 
location. 
"Thresholds generally differ 
by 
country 
and 
project.  Consult 
"Assessment 
of 
Agency's 
Capacity 
to 
Implement 
-- 
- 
___ 
Procurement" 
and 
contact the 
Regional 
Procurement 
Adviser 
for 
guidance 
- 
64 
- 
Page  69
Annex 
6(B): 
Financial 
Management 
and 
Disbursement Arrangements 
CHINA 
Second Tianjin Urban Development and Environment 
Project 
Financial Management 
1. 
Summary 
of 
the 
Financial 
Management 
Assessment 
1. 
The task 
team 
has 
conducted 
an 
assessment 
of 
the 
adequacy 
of 
the 
project financial 
management 
system 
for 
the 
Second 
Tianjin 
Urban 
Development and 
Environment 
Project, based 
on 
guidelines issued 
by 
the 
Financial 
Management 
Sector 
Board 
on 
June 
30,2001, 
and 
concluded that 
the 
project 
meets the 
minimum 
Bank 
financial 
management 
requirements, 
as 
stipulated 
in 
BPlOP 
10.02. 
In 
the 
team’s 
opinion, 
the 
project 
will 
have 
in 
place an 
adequate 
project 
financial 
management system 
that can provide, 
with 
reasonable 
assurance, 
accurate 
and 
timely 
information 
on 
the 
status 
of 
the 
project 
in 
the 
reporting 
format 
agreed 
with 
the project and 
as 
required 
by 
the Bank. 
Financial 
Management Organization. 
2. 
Financial 
as 
well 
as 
other 
implementation activities 
will 
be 
managed 
at 
two 
levels, 
by 
the 
municipal 
PMO 
attached 
to 
Tianj 
in 
Construction 
and 
Management 
Commission, 
and Subproject 
Offices 
of 
individual 
implementing 
agencies. 
The Foreign 
Fund 
Division 
of 
Tianjin Municipal 
Finance Bureau 
(TMFB) 
will 
play 
a 
major 
role 
in 
the 
project 
implementation, 
including overall 
monitoring, 
financing 
arrangement, 
procurement, 
financial 
management, 
etc. 
TMFB 
will 
also 
be responsible 
for 
maintaining, 
monitoring 
and 
reconciling 
special account 
to 
be 
established 
for 
the 
project, 
and 
reviewing, 
verifying 
and 
approving 
withdrawal 
applications prepared 
by 
PMO 
before 
submitting 
by 
TMFB 
to 
the 
Bank 
for 
disbursement processing. 
The 
Division 
has 
had 
prior 
experience 
with 
Bank 
projects 
and 
is 
familiar 
with 
Bank 
disbursement procedures. 
3. 
To 
strengthen 
financial 
management capacity, achieve consistent 
quality 
of 
accounting 
work, 
and 
provide 
easy 
reference, 
a 
project 
financial 
management 
manual 
(Manual) 
has 
been 
prepared. 
The 
manual 
provides 
detailed 
guidelines 
on 
financial 
management, 
internal 
controls, accounting 
procedures, 
fund 
and 
asset 
management 
and 
withdrawal 
application 
procedures. 
The 
final 
version 
will 
be 
made 
available 
to 
all 
relevant 
project 
staff 
before project 
effectiveness. 
4. 
expressed 
interest 
in 
participating 
in 
similar 
training provided 
by 
the 
Bank 
in 
the fuiure. 
The 
task team 
advises 
that 
further 
training 
will 
be 
provided 
as 
and 
when 
needed 
by 
PMO, 
TMFB 
or Bank 
task team 
for 
the 
second 
project. 
The 
PMO 
participated 
in 
training 
program 
provided 
by 
TMFB 
during 
phase 
TUDEP 
1, 
but 
Accounting Policies and 
Procedures 
5. 
following 
regulationslcirculars issued 
by 
the 
Ministry 
of 
Finance (MOF): 
The administration, accounting 
and 
reporting 
of 
the 
project 
will 
be 
set 
up 
in 
accordance 
with 
the 
a. 
In 
line 
with 
other 
Bank 
financed projects 
in 
China, 
the 
project 
will 
use 
the “Temporary  Regulations 
on 
Financial 
and 
Accounting 
Management 
for 
Projects 
Financed 
by 
the 
World 
Bank” 
(Circular 
#127 
issued 
in 
1993) 
by 
MOF 
as 
a 
basis 
for 
bookkeeping and preparation 
of 
project financial 
statements 
and 
management reports. 
Accrual 
accounting 
and 
double 
entry bookkeeping 
will 
be 
adopted 
by 
the 
project. 
b. 
Circular 
#12: 
“Regulation 
for 
the 
Submission 
of 
Withdrawal 
Applications” 
issued 
in 
December 
1996 
by 
MOF 
- 
includes 
detailed 
procedures 
for 
preparing and 
submitting 
withdrawal 
applications 
and 
- 
65 
- 
Page  70
retention 
of 
supporting 
documentation. 
c. 
Circular 
#13: 
“Accounting 
Regulations 
for 
World 
Bank 
Financed 
Projects” issued 
in 
January 
2000 
by 
MOF. 
The 
circular provides 
in-depth 
instructions 
of 
accounting 
treatment 
of 
project activities and 
covers the 
following: 
Chart 
of 
account 
Detailed 
accounting 
instructions 
for 
each 
project 
account 
Standard 
set 
of 
project financial 
statements 
Instructions 
on 
the 
preparation 
of 
project financial 
statements 
6. 
Bank 
and 
MOF 
and 
applies 
to 
all 
Bank 
projects 
appraised 
after 
July 
1, 
1998 
and includes 
the 
following: 
The 
standard 
set 
of 
project 
financial 
statements 
mentioned 
above has 
been 
agreed 
to 
between 
the 
Balance 
sheet 
Statement 
of 
source 
and 
use 
of 
fund 
Statement 
of 
implementation 
of 
creditlloan 
agreement 
Statement 
of 
special account 
7. 
Both 
circular 
#127 
and 
#13 
are 
simplified 
versions 
of 
the 
Accounting 
Standards 
for 
State-owned, 
Infrastructure 
Oriented 
Projects 
(the 
“Standards”), 
taking 
into 
consideration 
of 
unique 
characteristics 
of 
Bank 
projects. 
The 
Standards are 
modeled after 
the 
principles 
of 
the 
International 
Accounting 
Standards 
and provides 
detailed 
guidelines 
to 
accounting 
for 
activities 
of 
Bank 
financed 
projects. 
8. 
Each 
of 
the 
implementing 
entities 
will 
be 
managing, 
monitoring 
and 
maintaining 
respective 
project 
accounting 
records. 
Original 
supporting 
documents 
for 
project activities 
will 
be 
retained 
by 
originating implementing 
entities. 
In 
addition, 
each 
implementing 
entities 
will 
prepare 
financial 
statements, 
which 
will 
then 
be 
reviewed, approved 
and 
consolidated 
by 
PMO 
and 
TMFB. 
Renorting,. 
Monitoring, 
and 
Format 
of 
Financial 
Statements 
9. 
Each implementing 
entity 
will 
prepare 
its 
own 
project 
financial 
statements, 
which 
will 
then 
be 
consolidated 
by 
PMO 
and 
TMFB. 
The format 
and 
content 
of 
the 
following 
project financial 
statements 
represent 
the 
standard 
project reporting 
package agreed 
to 
between 
the 
Bank 
and 
MOF, 
and 
have 
been 
discussed 
and 
agreed 
with 
all 
parties 
concemed. 
The project 
consolidated 
financial 
statements 
will 
be 
submitted 
as 
part 
of 
the 
Financial 
Monitoring 
Report 
to 
the 
Bank 
on 
a 
semi-annual basis 
within 
45 
days 
of 
each 
reporting 
period, 
and include 
the 
following 
four 
statements: 
Balance 
Sheet; 
Summary 
of 
Sources 
and 
Uses 
of 
Funds 
by 
Project 
Component; 
Statement 
of 
Implementation 
of 
Loan 
Agreement; 
and 
Statement 
of 
Special 
Account 
10. 
A 
computerized 
Information 
system 
named 
Jin 
Die 
Financial 
Management Software 
was 
used 
by 
the 
PMO 
and 
Tianjin 
Municipal 
Engineering Bureau 
during 
TUDEP 
1. 
As 
the 
software 
package 
has 
been 
considered 
by 
business 
community 
as 
a mature 
financial 
product 
and 
widely 
used, 
and 
proved 
to 
be 
adequate 
for the 
financiallaccounting 
work 
of 
Phase 
I, 
the 
PMO 
and 
TMEB 
as 
well 
as 
other 
implementing 
agencies. 
The 
task 
team 
will 
work 
closely 
with 
the 
project 
at 
the 
initial 
stage 
to 
ensure 
proper accounting 
setup 
and 
consistency 
within 
all 
implementing 
entities 
involved. 
- 
66 
- 
Page  71
1 
1. 
experience 
with 
Bank's 
projects. 
Project 
personnel 
identified 
to 
assume 
financial 
or 
accounting positions 
have 
relevant 
adequate 
work 
experience 
and 
educational background. 
Bank 
records 
of 
PMO 
and 
TMFB 
indicate 
that 
both 
PMO 
and 
TMFB 
have 
been 
found 
satisfactory 
in 
respect 
of 
project financial 
management 
and 
withdrawal 
applications. 
Strengths. 
PMO 
and most 
project implementing 
entities 
involved 
in 
the 
project 
have 
had prior 
Significant 
weaknesses 
1. 
PMO 
of 
small 
town 
sewerage 
component 
has 
not 
been 
set 
up 
yet. 
2. 
The financial 
management 
manual 
is 
yet 
to 
be finalized. 
12. 
agreed 
upon 
as 
follows: 
Weaknesses 
Significant 
weaknesses 
have 
been 
identified 
and 
the 
resolutions 
have been 
Resolution 
Establishment 
of 
PMO 
with 
adequate 
FMS 
systems 
will 
be 
a 
condition 
of 
disbursement. 
Draft 
financial 
management 
manual 
has 
been 
submitted 
to 
the 
Bank 
for 
review. 
The 
final 
version 
will 
be 
completed 
and 
distributed 
to 
all 
financial staff 
before 
effectiveness. 
2. 
Audit 
Arrangements 
1. 
The 
Tianjin 
Municipal 
Engineering Bureau 
which 
is 
responsible 
for 
most 
of 
the 
project 
implementation 
has 
an 
Internal 
Audit 
Division. 
However, 
no 
such 
internal audit 
department exists 
for 
the other smaller 
implementing 
entities.  Therefore, 
regular supervision 
by 
PMO, 
TMFB 
and 
Bank 
task 
team 
will 
have 
to 
be 
relied 
upon 
to 
fill 
in 
the 
gap. 
2. 
the Government 
Auditing 
Standards 
of 
the People's 
Republic 
of 
China 
(1997 
edition). 
The 
Tianjin 
Municipal 
Audit 
Office 
has 
been 
identified 
as 
the 
auditor 
for 
the Project, 
and 
will 
issue annual 
audit 
reports. 
In 
line 
with 
other 
Bank 
financed projects 
in 
China, 
the 
project 
will 
be 
audited 
in 
accordance 
with 
3. 
6 
months 
of 
the 
end 
of 
each calendar 
year, 
with 
a 
separate 
opinion 
on 
Statement 
of 
Expenditures 
and 
Special Account. 
In 
addition, once operations 
commence, 
audited 
annual 
reports 
on 
financial position 
and 
operating results 
of 
the 
Tianjin 
Drainage Company 
will 
be 
due 
to 
the 
Bank 
within 
6 
months 
of 
the 
end 
of 
each calendar 
year, 
as 
will 
be 
the 
audited 
annual 
financial 
reports 
for 
other 
sewerage entities, 
audited 
by 
the 
Municipal 
Audit 
Office or 
other 
qualified 
auditors. 
Audit 
reports 
on 
annual 
project 
consolidated 
financial 
statements 
will 
be 
due 
to 
the 
Bank 
within 
3. 
Disbursement Arrangements 
The 
project 
loan 
will 
be 
disbursed 
on 
the 
traditional 
disbursement techniques, 
rather 
than 
PMR-based 
disbursement, 
in 
accordance 
with 
the 
agreement 
between 
the 
Bank 
and 
MOF. 
Disbursement 
methods, 
such 
as 
replenishment, 
direct 
payment 
and 
special commitment, 
are 
available 
for 
the 
project, 
but 
most 
of 
the 
loan 
is 
expected 
to 
be 
disbursed 
through 
the 
Special Account. 
Implementing 
agencies 
will 
originate 
the 
disbursement 
application, 
PMO 
will 
review 
and 
approve 
it, 
and 
TMFB 
and 
examine 
the 
documents 
and make 
disbursement 
to 
the 
implementing 
agencies. 
Allocation 
of 
loan proceeds (Table 
C) 
The 
proposed 
loan 
of 
USSlSO 
million would 
be 
disbursed 
over 
a 
period 
of 
about seven 
years, 
up 
to 
the 
closing 
date 
of 
June 
30,2010. 
The allocation 
of 
loan 
proceeds 
according 
to 
expenditure 
category 
is 
listed 
in 
Table 
C. 
- 
67 
- 
Page  72
Table 
C: 
Allocation 
of Loan 
Proceeds 
Goods 
for 
Suburban 
Sewerage 
Goods 
for 
others 
Works 
for 
Dagu 
Canal 
Rehabilitation 
Works 
for 
Suruban 
Sewerage 
Works 
for 
Dagunanlu 
Interchange 
Works 
for 
Bus Priority 
Corridors 
Works 
for 
Others 
Consultant 
Services 
and 
Training 
Unallocated 
Total Project Costs 
with 
Bank 
Financing 
Expenditure 
Category 
] 
Amount 
in 
US$million 
I 
Financing Percentage 
9.50 
32.50 
17.00 
10.40 
7.40 
6.30 
5 
1 
.OO 
4.40 
10.00 
148.50 
Front-end fee 
I 
1.50 
100% 
of 
foreign 
expenditures, 
100% 
of 
local 
expenditures (ex-factory 
cost) 
and 
75% 
of 
local 
expenditures 
for 
other 
items 
procured 
locally 
Same 
as 
above 
50% 
50% 
50% 
50% 
100% 
50% 
1 
91% 
I 
I 
ITotal 
150.00 
- 
68 
- 
Page  73
Use 
of 
statements 
of 
expenditures 
(SOEs): 
Withdrawals 
for 
the 
loan 
account 
will 
be 
made 
on 
the 
basis 
of 
SOEs 
for 
the 
following 
expenditures: 
Works 
contracts 
of 
less 
than 
$500,000 
Goods 
contracts 
of 
less 
than 
$300,000 
Consulting 
firm 
contract 
of 
less 
than 
$300,000 
Individual 
consultant 
contracts 
of 
less 
than 
$50,000 
All 
training 
activities 
Special 
account: 
Authorization, 
allocation 
and 
operation 
of 
the 
special account. 
To 
facilitate 
disbursements, 
a 
special 
account 
will 
be opened 
with 
an 
initial 
authorized 
allocation 
of 
$4.0 
million, 
which 
may 
be 
increased 
to 
$8.5 
million, 
estimated 
average 
expenditures 
for 
a 
four-month 
period, 
once 
the 
cumulative 
disbursement 
reaches 
$40,000,000. 
- 
69 
- 
Page  74
Annex 
7: 
Project 
Processing 
Schedule 
CHINA: 
Second 
Tianjin 
Urban Development 
and 
Environment Project 
Time 
taken 
to 
prepare 
the 
project 
(months) 
First 
Bank 
mission (identification) 
14 
18 
0310112000 
0510812001 
Appraisal 
mission 
departure 
Negotiations 
Planned 
Date 
of 
Effectiveness 
Prepared 
by: 
Tianjin Municipal 
Engineering Bureau 
and 
Traffic 
Management 
Department, 
coordinated 
by 
Tianj 
in 
Urban 
Construction 
Commision 
(now 
renamed 
Tianjin 
Construction 
and Management 
Commission), 
and 
assisted 
by 
other 
Bureaus 
of 
the 
Tianjin 
Municipal 
Government 
0710512001 
1012812002 
1010512001 
0310312003 
0610112002 
0812512003 
Preparation assistance: 
TMEDI, 
TMI, 
Tianjin 
Academy 
of 
Environmental 
Science, 
Golder 
Associates, 
Tianjin 
Center 
for 
Environmental 
Assessement, 
Joint 
venture 
of 
Wilbur 
Smith 
ASSOC., 
BBV, 
and 
Tiajin 
International 
Engineering Consulting 
Company 
Bank 
staff 
who 
worked 
on 
the 
projecl 
Name 
Songsu 
Choi 
Greg Browder 
Edouard 
Motte 
Shunong 
Hu 
Chongwu 
Sun 
Mariana 
M. 
Montiel 
Xiaoping 
Li 
Zhuo 
Yu 
Bekir 
Onursal 
Youlan 
Zou 
Hubert 
Nove-Josserand 
Rodney 
Stickland 
Hoi-Chan 
Nguyen 
Anne 
Harrison 
Richard 
Scurfield 
David 
Hanrahan 
Alex 
McPhail 
ncluded: 
Snecialitv 
Team 
Leader, 
Urban 
Economist 
Environmental 
Engineer 
Municipal 
Engineer 
Environmental 
Engineer 
Environment 
Legal 
Counsel 
Procurement 
Financial 
Management 
Environment 
Resettlement 
Urban 
Transportation 
Urban 
Transportation 
Legal 
Counsel 
Team 
Assistance 
Peer 
Review: 
Transportation 
Peer 
Review: Environment 
Peer 
Review: 
Sewerage 
and 
Finance 
- 
70 
- 
Page  75
Annex 
8: 
Documents 
in 
the Project 
File* 
CHINA: 
Second 
Tianjin 
Urban Development and Environment 
Project 
A. 
Project Implementation 
Plan 
Project 
Feasibility 
Study, 
August 
2002 
Project Implementation 
Plan, 
January 
2003 
Environmental 
Assessment, 
October 
2002, 
revisions 
and 
clarifications 
dated December 
2002, 
January 
2003, 
March 
2003 
Dagu 
Canal 
Remediation Implementation 
Plan, 
November 
2002 
Resettlement 
Action 
Plan 
and 
Resettlement 
Policy 
Framework, 
November 
2002; 
revised 
January 2003 
Feasibility 
reports 
and 
design 
documents 
for individual 
components, 
dated 
May 
2002 
- 
January 
2003 
Draft 
Terms 
of 
Reference 
for: 
Sewerage 
Sector 
Study 
(last 
revision 
March 
2003), 
Transportation 
Institution 
Development, 
Traffic 
Model 
Development, 
Bus 
Route Restructuring and 
Bus 
priority 
Corridor 
Design, 
Dagunanlu 
Interchange Concept 
review 
(last 
revision 
February 
2003) 
6. 
Bank 
Staff Assessments 
FMS 
Assessment, 
Second 
Draft, 
Nov 
2002 
Procurement 
Capacity 
Assessment, 
November 
2002 
Financial 
Analysis 
of Institutional 
Options 
for 
Sewerage 
(Electronic), November 2002 
Economic Analysis 
of 
the 
Project 
Components, 
August 
2002 
Evaluation 
of 
Water 
Reuse 
Options, 
July 
2002 
Mission 
Aide 
Memoire, 
May 
2001, 
Novemer 
200 
1 
, 
January 
2002, 
April 
2002, 
November 
2003 
Implementation Completion 
Report, 
Tianjin 
Urban 
Development 
and Environment 
Project, 
June 
200 
1 
C. 
Other 
Dagu 
Canal 
Sediment 
Analysis Report, 
January 
2002 
ADB 
Report 
on 
Tianjin 
Wastewater 
Treatment 
and Water 
Resource 
Protection Project, Novemer 
2000 
Resettlement 
Action 
Plan 
for 
the 
above 
project, November 
2002 
'Including 
electronic files 
- 
71 
- 
Page  76
Annex 
9: 
Statement 
of 
Loans 
and Credits 
CHINA: 
Second 
Tianjin 
Urban 
Development and Environment Project 
02-Dec-2002 
Difference between 
expected 
and 
actual 
disbursements' 
Original 
Amount 
in 
US$ 
Millions 
Project 
ID 
FY 
Purpose 
IBRD 
IDA 
GEF 
Cancel. 
Undisb. 
Orig 
FrmRev'd 
PO70441 
2003 
Hubei Xiaogan 
Xiangfan Highway 
250.00 
0.00 
0.00 
0.00 
250.00 
8.44 
0.00 
PO58847 
PO60029 
PO64729 
PO71147 
PO58846 
PO70459 
PO68049 
PO56596 
PO56516 
PO56199 
PO51859 
PO47345 
PO45915 
PO58845 
Po45264 
Po45910 
PO64730 
PO49436 
PO56424 
PO42109 
PO58843 
Po58844 
PO46829 
PO46564 
PO46051 
PO36953 
Po41890 
PO42299 
PO43933 
PO56216 
PO381 
2 
1 
PO60270 
PO57352 
PO58308 
PO41268 
PO49665 
PO50036 
PO51705 
PO51858 
PO51888 
PO03653 
PO03619 
PO51736 
PO49700 
PO45788 
PO46952 
Po46563 
PO03566 
PO40185 
PO03591 
PO37859 
PO03539 
2003 
Third Xinjiang 
Highway Project 
2002 
Sustainable 
Forestry 
Dev(Natura1 
Forest) 
2002  SUSTAINABLE 
FORESTRY DEVELOPMENT PRO 
2002 
CN-Tubercuiosis 
Control Project 
2002 
National 
Railway Project 
2002 
Inner Mongolia 
Highway Project 
2002 
Hubei 
Hydropower Development 
in 
Poor Are 
2001 
Shijiazhuang 
Urban Transport 
2001 
WATER 
CONSERVATION 
2001 
Third Inland Wateways 
2001 
CN-LIAO RIVER BASIN 
2001 
CN-HUAI 
RIVER POLLUTION CONTROL 
2001 
Unimqi Urban 
Transport 
2001 
Jiangxi 
II 
Hw 
2000  SMALLHLDR CATTLE 
DN 
2000  CN-HEBEI URBAN 
ENVIRONMENT 
2000 
Yangtze Dike 
Strengthening Project 
2000  CN-CHONGQING 
URBAN ENVMT 
2000 
TONGBAI 
PUMPED 
STOW 
2000 
CN-BEIJING 
ENVIRONMENT 
II 
2000 
Guangxi 
Highway 
2000 3rd Henan Prov 
Hw 
1999 RENEWABLE 
ENERGY DEVELOPMENT 
1999 
Gansu 
a 
Inner 
Mongolia Poverty 
Reduction 
1999  CN-HIGHER EDUC, REFORM 
1999 CN-HEALTH 
IX 
1999 
Uaoning 
Uhan 
Transport 
1999 
TEC 
COOP CREDIT 
1V 
1999 CN-SICHUAN 
URBAN ENVMT 
1999 
LOESS 
PLATEAU 
II 
1999 RENEWABLE 
ENERGY DEVELOPMENT 
I999 
CN-ENTERPRISE 
REFORM 
LN 
1999  CN-RURAL WATER 
IV 
1999  CN-PENSION 
REFORM PJT 
1999 
Nat Hwy4iHubei-Hunan 
1999 
ANNING VALLEY 
AG.DEV 
1999 Anhui 
Provincial 
Hwy 
1999 
Fujian 
II 
Highway 
1999 
ACCOUNTING 
REFORM 
a 
DEVELOPMENT 
1999 GUANZHONG IRRIGATION 
1999 Container Transport 
1998 
2nd 
Inland 
Waterways 
1998 
E. 
CHlNAlJlANGSU 
PWR 
1998  IAIL-2 
1998 
Tri-Provincial 
Hwy 
1998 
FOREST. DEV. 
POOR 
AR 
1998 
TARlM 
BASIN 
II 
1998 
CN-BASIC 
HEALTH (HLTH8) 
1998 
CN-SHANDONG ENVIRONMENT 
1998 
STATE FARMS COMMERCI 
1998  Energy 
Conservation 
1998  SUSTAINABLE 
COASTAL RESOURCES 
DEV. 
150.00 
0.00 
93.90 
104.00 
160.00 
100.00 
105.00 
100.00 
74.00 
100.00 
100.00 
105.50 
100.00 
200.00 
93.50 
150.00 
210.00 
200.00 
320.00 
349.00 
200.00 
150.00 
100.00 
60.00 
20.00 
10.00 
150.00 
10.00 
150.00 
100.00 
0.00 
0.00 
18.00 
0.00 
350.00 
90.00 
200.00 
200.00 
27.40 
80.00 
71 
.OO 
123.00 
250.00 
300.00 
230.00 
100.00 
90.00 
0.00 
95.00 
150,oo 
0.00 
100.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
100.00 
50.00 
50.00 
0.00 
35.00 
2.00 
50.00 
0.00 
5.00 
30.00 
5.00 
0.00 
30.00 
0.00 
0.00 
5.60 
20.00 
0.00 
0.00 
0.00 
0.00 
0.00 
100.00 
60.00 
85.00 
0.00 
0.00 
0.00 
0.00 
0.00 
16.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
25.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
35.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
22.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
18.61 
0.00 
86.00 
0.00 
0.00 
0.00 
2.67 
0.00 
0.00 
80.91 
0.00 
2.31 
150.00 
16.96 
93.90 
95.33 
82.29 
99.00 
105.00 
96.00 
57.67 
96.00 
86.24 
100.34 
70.04 
177.14 
39.74 
140.03 
157.47 
188.33 
304.55 
343.61 
149.94 
118.33 
12.87 
89.03 
31.11 
42.18 
69.02 
39.17 
97.50 
71.95 
26.87 
3.29 
31.05 
1.98 
155.78 
46.02 
84.77 
115.15 
21.16 
57.03 
4.86 
72.82 
72.39 
16.76 
66.35 
74.23 
51.21 
37.70 
29.69 
8.45 
3.99 
49.09 
0.00 
0.00 
0.78 
-8.67 
-6.88 
-1.00 
5.17 
37.23 
5.22 
1.83 
6.88 
-5.18 
32.19 
3.48 
19.49 
32.45 
79.13 
33.23 
62.95 
122.48 
40.77 
30.66 
95.71 
38.07 
30.08 
13.99 
52.16 
-4.46 
44.57 
51.32 
17.03 
5.05 
15.62 
2.14 
59.03 
1 
I 
.65 
29.52 
84.99 
20.76 
29.26 
23.26 
60.82 
158.39 
-6.79 
38.55 
-36.36 
40.33 
21.06 
24.51 
85.71 
21.85 
35.57 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
-3.30 
0.00 
0.00 
0.00 
0.00 
8.51 
0.00 
0.00 
1.83 
-0.65 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
4.80 
0.00 
0.00 
49.64 
0.00 
0.00 
0.00 
4.13 
0.00 
0.00 
- 
72 
- 
Page  77
Difference between 
expected 
and 
actual 
disbursements' 
Original 
Amount 
in 
US$ 
Millions 
Project 
ID 
FY 
Purpose 
IBRD 
IDA 
GEF 
Cancel. 
Undisb, 
Orig 
FnReVd 
PO03606 
PO03614 
PO36414 
PO36949 
PO35698 
PO03637 
PO03654 
PO34061 
PO03635 
PO36952 
PO03590 
~035693 
PO44485 
PO03643 
PO38988 
PO03650 
PO36405 
PO03589 
PO03648 
PO03649 
PO03602 
PO03599 
PO40513 
PO03638 
Po03594 
PO03646 
PO3461 
8 
PO03596 
PO36947 
PO03596 
PO03647 
PO03642 
PO03639 
PO03571 
PO03585 
PO03603 
PO03600 
PO03586 
PO03540 
PO03641 
PO03404 
PO03644 
PO03626 
PO03609 
PO03595 
PO03473 
PO03592 
PO03627 
PO03632 
1998 
ENERGY 
CONSERVATION 
1998 
Guangzhou 
City Transport 
1998 CN-GUANGXI 
URBAN 
ENVMT 
1998 
Nat 
Hwy3-Hubei 
1998 
HUNAN 
POWER 
DEVELOP. 
1997 
CN-NAT'L 
RURAL 
WATER 
3 
1997 
Nat HwyZHunan-Guangdong 
1997 
XlAOLANGOl 
MULTI. 
II 
1997 
CN-VOC. 
ED. 
REFORM 
PROJ 
1997 CN-BASIC 
ED. 
IV 
1997 
QINBA 
MOUNTAINS POVERTY REDUCTION 
1997 
FUEL 
EFFICIENT IND, 
1997 SHANGHAI WAIGAOQIAO 
1997 
Xinjiang 
Hw 
II 
1997  HEILONGJIANG 
ADP 
1997 TUOKETUO POWEWINNER 
1997 
WANJIAZHAI WATER 
TRA 
1996 CN-DISEASE PREVENTION (HLTH7) 
1996 CN-SHANGHAI 
SEWERAGE 
II 
1996 SHANXI 
POVERTY ALLEV 
1996 CN-HUBEI URBAN 
ENVIRONMENT 
1996 
CN-YUNNAN 
ENVMT 
1996 
2nd Henan 
Prov 
Hwy 
1996 
SEEDS 
SECTOR 
COMMER. 
1996 
GANSU HEXI 
CORRIDOR 
1996 CN-CHONGQING 
IND 
POL 
CT 
1996 
CN-LABOR 
MARKET 
DEV. 
1995 YANGTZE BASIN 
WATER 
1995 SICHUAN TRANSMISSION 
1995 CN-LIAONING ENVIRONMENT 
1995 China Economic 
Law 
Reform -LEGEA 
1995 ZHEJIANG POWER 
DEVT 
1995 
SOUTHWEST 
POVERTY 
REDUCTION 
PROJEC'I 
1995 
RAILWAYS 
VI1 
1995 
SHENYANG 
IND. 
REFORM 
1995 
CN-ENT HOUSING 
8 
SSR 
1995 CN-TECHNOLOGY DEVELOPMENT 
I994 
CN-SHANGHAI 
ENVIRONMENT 
1994 LOESS PLATEAU 
1994 
YANGZHOU THERMAL 
POWER 
1994 
SICHUAN GAS 
DEV. 
CON 
1994 
XlAOIANGDl 
RESETTLEMENT 
1994 
Fujian 
Prov Highway 
1994 
SICHUAN 
GAS 
DEV 
a 
CONSERVATION 
1994 
RED 
SOILS 
II 
AREA 
DWELOPMENT 
PROJECT 
1993 
CN-ZHEJIANG 
MULTlClTlES 
DEVELOPMENT 
1993  REF, 
INST'L.8 
PREINV 
1993 
GRAIN DISTRIBUTION P 
1993 
CN-ENVIRONMENT 
TECH ASS 
63.00 
200.00 
72.00 
250.00 
300.00 
0.00 
400.00 
430.00 
10.00 
0.00 
30.00 
0.00 
400.00 
300.00 
120.00 
400.00 
400.00 
0.00 
250.00 
0.00 
125.00 
125.00 
210.00 
60.00 
60.00 
170.00 
10,oo 
100.00 
270.00 
110.00 
0.00 
400.00 
47.50 
400.00 
175.00 
275.00 
200.00 
160.00 
0.00 
350.00 
0.00 
0.00 
140.00 
255.00 
0.00 
0.00 
0.00 
325.00 
0.00 
0.00 
22.00 
0.00 
0.00 
20.00 
0.00 
0.00 
0.00 
0.00 
0.00 
70.00 
0.00 
0.00 
0.00 
0.00 
0.00 
20.00 
0.00 
85.00 
0.00 
150.00 
0.00 
0.00 
32.80 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
100.00 
0.00 
0.00 
0.00 
100.00 
0.00 
25.00 
0.00 
25.00 
0.00 
0.00 
0.00 
20.00 
0.00 
90.00 
0.00 
0.00 
0.00 
20.00 
0.00 
110.00 
0.00 
0.00 
0.00 
0.00 
0.00 
10,oo 
0.00 
0.00 
0.00 
200.00 
0.00 
0.00 
0.00 
0.00 
0.00 
75.00 
0.00 
0.00 
0.00 
0.00 
0.00 
150.00 
0.00 
0.00 
0.00 
0.00 
10.00 
110.00 
0.00 
0.00 
0.00 
0.00 
10.00 
150.00 
0.00 
110,oo 
0.00 
50.00 
0.00 
165.00 
0.00 
50.00 
0.00 
0.00 
0.00 
0.00 
0.00 
145.00 
0.00 
0.00 
78.53 
0.00 
0.00 
0.00 
0.00 
0.00 
60.00 
0.00 
102.50 
75.00 
0.00 
0.00 
0.00 
26.32 
0.00 
0.00 
9.40 
0.00 
164.62 
0.00 
0.00 
95.00 
0.00 
0.00 
0.00 
0.00 
109.00 
0.00 
20.00 
3.02 
0.00 
0.00 
11.50 
0.00 
0.00 
18.11 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
44.98 
129.54 
76.91 
39.61 
115.75 
9.65 
89.69 
2.64 
0.07 
1.21 
53.29 
9.22 
167.24 
11.71 
17.65 
59.91 
50.61 
15.31 
82.06 
3.48 
48.31 
77.85 
60.63 
15.03 
67.26 
2.72 
5.54 
2.70 
12.13 
12.25 
4.20 
58.47 
9.22 
64.08 
41.52 
100.28 
6.53 
24.94 
1.58 
3.15 
0.02 
0.13 
12.29 
51.14 
5.79 
1.06 
2.65 
24.65 
2.01 
13.98 
126.99 
53.46 
0.45 
230.75 
11.19 
89.69 
121.26 
1.20 
3.96 
57.32 
32.81 
112.19 
71.71 
17.20 
142.30 
125.11 
25.40 
82.06 
12.80 
78.75 
74.93 
60.63 
25.48 
60.48 
167.54 
7.77 
5.23 
107.13 
12.25 
4.86 
64.54 
33.86 
172.75 
41.52 
118.75 
9.55 
24.94 
0.61 
14.65 
0.78 
-1.75 
30.40 
51.14 
1.19 
1.25 
3.14 
25.49 
2.68 
0.00 
0.00 
2.65 
0.00 
21.00 
10.26 
0.00 
119.52 
0.00 
0.00 
0.00 
0.00 
31.78 
8.71 
0.00 
-5.66 
5.61 
0.00 
7.83 
0.00 
1.26 
52.29 
15.84 
-0.75 
0.00 
2.72 
0.00 
5.23 
3.85 
10.18 
0.00 
0.00 
33.86 
29.10 
0.00 
76.74 
0.00 
20.94 
0.00 
2.77 
0.00 
-2.28 
30.38 
0.00 
1.16 
-2.36 
3.00 
18.62 
2.36 
Total: 
14099.80 
2532.60 
172.80 
1110.69 
6220.21 
4096.45 
571.55 
- 
73 
- 
Page  78
CHINA 
STATEMENT 
OF 
IFC's 
Held 
and 
Disbursed 
Portfolio 
In 
Millions 
US 
Dollars 
Ju~ 
30 
- 
2002 
Committed 
Disbursed 
IFC 
IFC 
FY 
Approval 
Company 
Loan 
Equity 
Quasi 
Partic 
Loan 
Equity 
Quasi 
Partic 
1997 
1997100 
1997 
1996 
2001 
1998 
2000 
1998 
1999 
1993 
2001 
1995 
1998 
2000 
1996 
1993 
1998 
2002 
1999100102 
1996 
1998100 
2002 
1996 
1998 
1998 
1987192194 
1994 
1994 
1994 
1999 
1995 
1994 
1999 
2002 
2002 
1996 
1998 
200 
1 
2002 
1996 
2001 
1995 
Orient 
Finance 
PTP 
Holdings 
PTP 
Hubei 
Pacific 
Ports 
Peak 
Pacific 
Rabobank 
SHFC 
SSIF 
Shanghai 
Krupp 
Shanxi 
Shenzhen PCCP 
Sino-Forest 
Suzhou 
PVC 
WIT 
Wanjie 
Hospital 
Weihai 
Weidongri 
Yantai 
Cement 
Zhen Jing 
Advantage 
Bank 
of 
Shanghai 
Beijing 
Home1 
CIG 
Holdings 
PLC 
CPEF 
Caltex 
Ocean 
Chengdu 
Huarong 
Chengxin-IBC 
A 
China Bicycles 
China 
Walden 
Mgt 
China 
Walden 
Ven 
Dalian 
Glass 
Dujiangyan 
Dupont 
Suzhou 
Dynamic Fund 
Hansom 
Huarong 
AMC 
IEC 
Jingyang 
Leshan 
Scana 
Maanshan Carbon 
NCCB 
Nanjing Kumho 
New 
China 
Life 
Newbridge 
Inv. 
9.52 
0.00 
11.72 
0.00 
0.00 
0.90 
0.00 
30.00 
0.00 
0.03 
0.00 
2.54 
0.00 
0.00 
6.00 
0.00 
17.87 
0.00 
3.76 
0.99 
25.00 
0.00 
0.00 
2.48 
5.00 
0.00 
15.00 
0.00 
1.92 
0.00 
11.13 
1.95 
0.00 
2.00 
0.00 
0.25 
0.00 
24.67 
2.50 
0.50 
0.00 
3.00 
0.00 
20.00 
18.53 
0.00 
7.40 
3.20 
0.00 
0.36 
0.00 
0.00 
0.00 
0.01 
0.00 
0.21 
0.00 
2.40 
25.59 
0.00 
12.46 
4.15 
0.00 
9.75 
0.00 
16.10 
31.50 
0.00 
20.00 
0.00 
32.50 
0.00 
6.10 
1.35 
9.00 
2.00 
0.00 
26.58 
6.82 
3.81 
0.00 
30.70 
0.00 
1.95 
0.00 
0.00 
0.00 
0.00 
25.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
11.90 
0.00 
23.29 
0.00 
0.00 
0.90 
0.00 
68.80 
0.00 
0.00 
0.00 
0.00 
5.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
1.65 
0.00 
0.00 
28.64 
8.60 
0.00 
0.00 
0.00 
0.00 
0.00 
30.00 
10.40 
0.00 
0.00 
0.00 
0.00 
69.23 
0.00 
0.00 
0.00 
19.38 
0.00 
0.00 
9.52 
0.00 
11.72 
0.00 
0.00 
0.90 
0.00 
19.74 
15.32 
3.76 
20.00 
0.00 
0.00 
15.00 
1.92 
11.13 
0.00 
0.00 
0.00 
2.50 
0.00 
0.00 
18.53 
3.70 
0.00 
0.00 
0.00 
0.00 
0.00 
16.11 
12.46 
0.00 
0.00 
0.00 
0.00 
32.50 
4.50 
0.00 
0.00 
6.82 
0.00 
0.00 
0.03 
0.00 
2.54 
0.00 
0.00 
0.45 
0.00 
0.00 
0.99 
0.00 
2.48 
0.00 
0.00 
0.00 
1.95 
2.00 
0.00 
24.67 
0.50 
0.00 
0.00 
0.00 
3.20 
0.36 
0.00 
0.01 
0.2 
1 
2.40 
0.00 
4.15 
8.09 
16.10 
0.00 
0.00 
0.00 
1.35 
0.00 
26.46 
3.81 
23.32 
0.00 
1.95 
0.00 
11.90 
0.00 
0.00 
0.00 
23.29 
0.00 
0.00 
0.00 
0.00 
0.00 
0.90 
0.00 
0.00 
0.00 
45.26 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
1.65 
0.00 
0.00 
0.00 
0.00 
0.00 
28.64 
0.00 
4.30 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
18.89 
0.00 
10.40 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
69.23 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
0.00 
19.38 
0.00 
0.00 
0.00 
0.00 
Total 
Portfolio: 
304.22 
166.98 
25.00 
277.79 
206.13 
127.02 
0.00 
233.84 
Approvals Pending Commitment 
FY 
Approval 
Company 
Loan 
Equity 
Quasi 
Partic 
- 
74 
- 
Page  79
2002 
Darong 
10.00 
0.00 
1.50 
8.00 
2002 
Narada 
Battery 
6.60 
0.00 
0.00 
0.00 
2002 
ASIMCO 
0.00 
13.50 
1 
SO 
0.00 
2002 
Shuang 
Deng 
12.50 
0.00 
2.80 
0.00 
2002 
KHIT 
0.00 
0.00 
3.00 
0.00 
2002 
SML 
0.00 
0.00 
6.00 
0.00 
1996 
Jingyang 
4.00 
0.00 
0.00 
0.00 
2000 
CIG 
Zhapu 
6.00 
5.00 
0.00 
0.00 
2002 
Zhong 
Chen 
25.00 
0.00 
0.00 
32.00 
2002 
Sino 
Mining 
5.00 
0.00 
0.00 
5.00 
1998 
PTP 
Hubei 
BLINC 
0.00 
0.00 
0.00 
1 
SO 
2000 
Meijing 
9.00 
0.00 
0.00 
7.30 
2000 
CIMIC 
Tile 
15.00 
5.00 
0.00 
15.00 
2001 
Daning Coal 
0.00 
0.00 
2.00 
15.00 
2001 
AACI 
0.00 
0.00 
2.00 
0.00 
2001 
Minsheng 
0.00 
23.50 
0.00 
0.00 
2002 
Huarong 
AMC 
15.00 
0.00 
3.00 
0.00 
2002 
IEC 
0.00 
5.00 
0.00 
0.00 
Total 
Pending 
Commitment: 
108.10 
52.00 
21.80 
83.80 
- 
75 
- 
Page  80
Annex 
10: 
Country 
at 
a 
Glance 
CHINA: 
Second 
Tianjin 
Urban Development 
and 
Environment 
Project 
POVERTY 
and 
SOCIAL 
2001 
Population, 
mid-year (mil/ions) 
GNI per 
capita 
(Atlas 
method, 
US$) 
GNI 
(Atlas 
method, 
US$ 
bi//ions) 
Average annual 
growth, 
1995-01 
Population 
(%) 
Labor 
force 
(%) 
Most 
recent 
estimate 
(latest year available, 
199CO1) 
Poverty 
(% 
of population 
below national 
poverty 
line) 
Urban population 
(% 
of 
total 
population) 
Life 
expectancy 
at 
birth 
(years) 
Infant mortality 
(per 
1,000 
live 
births) 
Child malnutrition 
(?? 
of 
children under 
5) 
Amss 
to 
an improved 
water source 
(% 
ofpopulation) 
Illiteracy 
(% 
ofpopulation 
age 
15+) 
Gross 
primary enrollment 
(% 
of 
school-age population) 
Male 
Female 
KEY 
ECONOMIC 
RATIOS 
and 
LONG-TERM TRENDS 
1981 
GDP 
(US$ 
billions) 
228.3 
Gross domestic 
investmenUGDP 
32.5 
Exports 
of 
goods 
and serviceslGDP 
8.6 
Gross 
domestic savingslGDP 
32.9 
Gross 
national savingslGDP 
32.8 
Current account balancelGDP 
interest paymentdGDP 
Total debtlGDP 
Total 
debt 
servicelexports 
Present value of debtlGDP 
Present 
value 
of debtlexports 
0.4 
0.2 
2.5 
6.9 
198181 
1991-01 
(average 
annual 
growth) 
GDP 
10.0 
9.7 
GDP 
per 
capita 
8.4 
8.6 
China 
1,271.9 
890 
1 
,I 
29.3 
0.9 
1 
.o 
5 
38 
71 
32 
10 
75 
15 
107 
106 
109 
1991 
402.6 
34.8 
19.4 
38.1 
38.5 
3.8 
0.7 
15.0 
10.1 
2000 
8.0 
7.1 
East 
Asia 
B 
Pacific 
1,826 
900 
1,649 
1.1 
1.3 
37 
69 
36 
12 
74 
14 
107 
106 
108 
2000 
1,077.5 
36.1 
25.9 
38.8 
38.0 
1.9 
0.6 
13.9 
7.4 
12.5 
46.0 
2001 
7.3 
6.6 
Lower- 
middle- 
income 
2,164 
1,240 
2,677 
1 
.o 
1.2 
48 
69 
33 
11 
80 
15 
107 
107 
107 
2001 
1,150.1 
37.9 
25.8 
40.3 
39.4 
1.5 
0.6 
14.8 
6.8 
11.7 
43.5 
2001-05 
6.9 
6.1 
__ 
Development 
diamond" 
Ltfe expectancy 
- 
GNI 
per 
- 
capita 
Access 
to 
improved 
water source 
China 
Lower-midd/e-in~me 
group 
- 
I 
Economic 
ratios, 
- 
I 
Trade 
Indebtedness 
-China 
-. 
- 
Lower-middle-income 
orouo 
Exports 
of 
goods and 
services 
12 
1 
83 
306 
__ 
STRUCTURE 
of 
the 
ECONOMY 
(% 
of 
GDP) 
Agriculture 
Industry 
Services 
Private 
consumption 
General 
government 
consumption 
imports 
of 
goods 
and 
services 
Manufacturing 
(average 
annual 
growth) 
Agriculture 
Industry 
Seivices 
Private 
consumption 
General 
government consumption 
Gross domestic 
investment 
Imports 
of 
goods and services 
Manufacturing 
1981 
I991 
31.8 
24.5 
46.4 
42.1 
38.5 
32.7 
21.8 
33.4 
14.5 
13.1 
8.2 
16.1 
1981-91 
1991-01 
5.2 
4.0 
11.4 
12.6 
11.1 
11.6 
12.6 
8.7 
8.3 
8.6 
9.9 
8.5 
10.4 
10.3 
9.6 
6.4 
2000 
2001 
15.9 
15.2 
50.9 
51.1 
34.5 
35.4 
33.2 
33.6 
13.1 
13.7 
23.2 
23.4 
2000 
2001 
2.4 
2.8 
9.6 
8.7 
9.1 
9.0 
7.8 
7.4 
8.7 
6.2 
12.2 
11.5 
4.2 
12.8 
24.5 
10.8 
!in 
77 
____ 
I 
Growth 
of 
investment and 
GDP 
(%) 
2o 
T 
0- 
! 
:- 
O1 
I 
96 
97 
98 
99 
00 
-GDI 
-GDP 
I 
I 
Growth 
of 
exports 
and 
imports 
(%) 
40 
- 
40 
- 
Note: 
2001 
data are 
preliminary estimates. 
*The 
diamonds 
show 
four 
key indicators 
in 
the 
country 
(in bold) 
compared 
with 
its 
income-group 
average. 
If 
data are 
missing, 
the diamond 
will 
be incomplete 
- 
76 
- 
Page  81
China 
PRICES 
and 
GOVERNMENT 
FiNANCE 
Domestic 
prices 
1% 
change) 
Consumer prices 
Implicit 
GDP 
deflator 
Government 
finance 
(% 
of 
GDP, 
includes 
current 
grants) 
Current 
revenue 
Current 
budget 
balance 
Overall 
surplus/de~ci~ 
TRADE 
(US$ 
mi//ions) 
Total 
exports 
(fob) 
Food 
Fuel 
Manufactures 
Total 
imports 
(ci9 
Food 
Fuel 
and energy 
Capital 
goods 
Export price 
index 
(1995=100) 
Import price 
index 
(1995=100) 
Terms 
of 
trade 
(1995=100) 
BALANCE 
of 
PAYMENTS 
(US$ 
millions) 
Exports 
of 
goods 
and 
sewices 
imports of 
goods 
and 
sewices 
Resource balance 
Net income 
Net current 
transfers 
Current 
account 
balance 
Financing items 
(net) 
Changes 
in 
net 
reserves 
Memo: 
ReSeNeS 
including 
gold 
(US$ 
mi//ions) 
Conversion 
rate 
(DEC, 
/ma//US$) 
EXTERNAL 
DEBT 
and 
RESOURCE 
FLOWS 
(US$ mil/ions) 
Total 
debt 
outstanding 
and disbursed 
IBRD 
IDA 
Total 
debt 
sewice 
IBRD 
IDA 
Official 
grants 
Official 
creditors 
Private 
creditors 
Foreign 
direct investment 
Portfolio 
equity 
World 
Bank program 
Commitments 
Disbursements 
Principal 
repayments 
Net flows 
Interest payments 
Net transfers 
Composition 
of 
net resource 
flows 
1981 
1991 
2000 
2001 
25.7 
3.4 
2.3 
6.7 
24.2 
16.9 
.. 
2.3 
0.8 
-7.1 
1981 
1991 
22,007 
71,843 
2,924 
7,226 
5,228 
4,754 
22,015 
63,791 
3,622 
2,799 
83 
2,113 
5,866 
19,601 
16 
51 
13 
49 
118 
103 
11,759 
55,698 
1981 
1991 
24,410 
78,909 
23,426 
65,339 
984 
13,570 
-124 
840 
.. 
830 
660 
15,240 
.. 
-4,149 
.I 
-11,091 
.. 
48,154 
2.1 
5.4 
1981 
1991 
5,798 
60,259 
0 
3,494 
0 
3,672 
0 
357 
0 
23 
1,744 
8,305 
19 
406 
506 
2,044 
89 
2,493 
0 
4,366 
0 
565 
196 
2,622 
0 
1,280 
0 
131 
0 
1,149 
0 
250 
0 
899 
0.4 
0.7 
0.9 
0.0 
15.3 
17.2 
0.6 
1 
.o 
-3.6 
3.2 
2000 
2001 
249,210 
266,155 
12,282 
12,780 
7,851 
8,420 
223,752 
239,800 
225,097 
243,610 
4,758 
4,980 
20,637 
17,490 
91,934 
107,040 
67 
65 
75 
73 
90 
90 
2000 
2001 
279,561 
299,410 
250,688 
271,324 
28,873 
28,086 
-14,666 
-19,173 
6,311 
8,492 
20,519 
17,405 
-9,971 
29,920 
-10,548 
-47,325 
171,753 
219,970 
8.3 
8.3 
2000 
2001 
149,800 
170,000 
11,118 
11,479 
8,771 
8,550 
21,728 
20,900 
1,291 
1,716 
131 
164 
147 
1,927 
-2,302 
42,096 
47,052 
7,814 
2,404 
1,536 
1,230 
1,907 
1,947 
644 
999 
1,263 
948 
778 
881 
485 
67 
1 
-GDPdeflator 
*CP1 
I 
I 
Export 
and 
import levels 
(US$ 
mill.) 
95 
96 
97 
98 
99 
00 
01 
I 
I 
Exports 
.Imports 
Current 
account balance 
to 
GDP 
(X) 
/i 
- 
95 
96 
97 
98 
99 
00 
01 
Composition 
of 
2001 
debt 
(US$ 
mill.) 
G: 
17,682 
A: 
11,479 
E. 
a,m 
D 
23,217 
: 
27,510 
/A-lBRD 
E. 
Bilateral 
B 
- 
IDA 
D 
~ 
Other 
multilateral 
F 
- 
Private 
C 
- 
IMF 
G 
-Short-term 
Development tconomics 
Y1141UZ 
- 
77- 
Page  82