Uocument of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 11040-A

STAFF APPRAISAL REPORT

CHINA

CHANGCCUN WATER SUPPLY AND ENVIRONMENTAL PROJECT

DECEMBER 30, 1992

MITCOFICHE COPY

heport No.:11040-CHA Type: (OAR)Titie: CHANGCHUN WATER SUIPPLY AND) ENVAutthor: PIETVELD, CExt.:82924 Room:F8059 Dept.:ASTIN

Environment, %uman Resources and UrbanDevelopment Operations Division

Country Department IIEast Asia and Pacific Regional Office

This docunent hs a resMtded distibuto and may be uad by ripiens only in the perfonmnce oftheir offid dutie Its contens may not otheise be dbcosed without Word Bank autoization.

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CURRENCY EQUIVALENTS(As of June 1992)

Currency Name = Renminbi (RMB)Currency Unit = Yuan (Y)

$1.00 =Y 5.48Y 1.00 = $0.18

WEIGHTS AND MEASURES

1 millimeter (mm) = 0.0939 Inches (in)1 meter (m) = 3.2808 feet (ft)

I square meter (m:2) = 10.7639 square feet (ft)I cubic meter (ml) = 35.3 cubic feet

1 hectare (ha) = 10,000 square meters1 kilometer (Iam) = 0.62 miles (mi)

1 square kilometer (1an) = 0.3861 square mile (mtn)

ACRONYNS AND ABBREVIATIONS

CIDA Canadian International Development AgencyCMC China National Machinery Import and Export CorporationCSC Changchun Sewerage CompanyCWSC Changchun Water Supply CompanyCWRC Cbangchun Water Resources CompanyEPB Environmental Protecion BureamHLLG High-Level Leadership Grouplcd Liters per capita per dayMOC Ministry of ConstructionMOWC Ministry of Water ConservancyNEPA National Enviromnental Protection AgencyPMO Project Management OfficePRC People's Republic of ChinaSOEs Statements of ExpenditureSPC State Planning CommissionUCC Urban Construction Commission

FISCAL YEAR

January 1 - December 31

FOR OFFICIAL US ONLY

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CHINA

CHANGCHUN WATER SUPPLY AND ENViRONNTAL PROJECT

CREDIT AND PROJECT SUMRY

Ibmwr. People's Republic of China (PRC)

_ bnfidaryt C bai~gcdun Municipalt

Ameunt SDR 86.6 million ($120 mfllion equivalent)

Term: Standard, with 35 yes maurity and a grce perid of 10 years

COlending Terms: Tho Govrment of China would make the proceeds avaiable to theChangchun Municipality. The municpality would oulend Iheproceeds: (a) to the Changchun Water Supply Company (CWSC) ata vaiable rate equal to the Bank rae plus a spread of 1.5 percent perannum at the same matur as IBRD loans; and (b) to the newlycreated Changchu Sewerag Company (CSC) at a fixed rate of5.1 pcont per annum at the same matuit as IBRD loans. CWSCand CSC wi beot a fixed commment chaw of 0.5 percent andassum the foreign excag re

hqject DewipUon Tbe main objectives of the project are to Improve water spply inChangchun to meet the domestc needs of the urban popuation,Support dustial growth, and control urban water polluton.

The physical works wuld include: (a) construcdon of a waterumvmbsion pipeline to convoy wat fom the Second Songhua Riverto an Impout reseroir curey sevzg Changcun; constructionof pumping stations, epnsi and Impovement of water treatfacliies and expansion of the capacity o' the wer disutonsystem; (b) construction of a trunk Intercepw sewer and a primarysewage treate plant and prremt of eqpmet and tmentsfor eniomenta quality monitoring and control; and (c) tecicalassaceto assistwihdesign and construcdosupevision, to fhmaagement support to the water and sewerage companies includingthe preparation of a staff training program, and to implement ahardus waste study. nstiuonally, the project would reiforCWSC, develop CSC, strengte water polludon control, e shapproprte pricing policies, improve operation practies, promotemasures fr water c ation ad me prsoU l maement,indcuding anig of staf.

This document has a rsicted distribution and may be used by recipients only in the peformanceof their oicia duties. Its contents may not otherwise be discosed without World Bank authotization.

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Etlmated Cost.:L Loa Forei Tdgn- ($ million)

Water Trw misn 36.0 44.5 80.6Urban Water Supply 34.2 36.1 70.2Sewag Colecton and Treatment 20.3 16.2 36.5Tecinical Assstce 6.3 6.5 12.8

Totals Cost Ak 2i ml ml

Physical Coningencie 14.3 15.0 29.3Price Coingences 15.2 6.8 22.0

TowalPo ectost D3 12S. 2S1*

Interest during Constrction 14.9 0.0 14.9

P_eauired ~~141.; 12.^ ^

mincing Plan: Local Fori Ta- ($ million)

Goverment of China 25.5 5.1 30.6Jain Provinc Gover_ment 54.7 0.0 54.7Chachun Municipality 61.0 0.0 61.0IDA 0.0 120.0 120.0

TAd14.1

Es d Disburt:

IDA FY i93 1994 199 I 1997 19(S mniion)

Anmual 7.2 22.0 32.0 30.0 r 15.0 11.0 3.8CumulatIve 7.2 29.2 61.2 91.2 105.2 116.2 120.0

Enn_mi1 late of Return Water Supply 11 pecentSewea 23 pferet

Maps: IRD No. 24063 - Gener LayoutIBRD No. 24064 - Water Supply FacilitiesDBRD No. 24114 - Sewerage Facilities

bg Prjeanced oods aeaxpt frm Impo duies and taxes.a In cost for and ($9.9 miion).

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Contents

1 IlieSecto .* ......... .. ..................

A. SectorBackgound ................................ 1Genal ........... ......................... 1WaterResources .................. 1War Supply .......................... . 1PdolutonControl . ............................. 2

B. Sectrinstitutions. . ... ............................... 2C. a orSe"rlsues .............................. 3D. Prevkos Bank Group nwolvementIn the SeCtDr . ......... 5E. Roleof theankGroup in theSector ..... .................. 6

2 ProjectAra ....................................... 7

A. Udn GrowthandEconomicAdIty ...... 7B. ktesldtd aandndust Water SupplySSavis . 7C. W atrsupplyImasterPin 8....... . . 8D. Resldent andInduwitrlaSewageDisposa .. 9E. SeDgwlspd sa Master Plan .. .. .. . . .. ... .. . 10P. PublicHeft .. ... 10

3 IuPlkroJec .......... 11

A. Projecobjecv tiv.... 11

C. Projectepaon........ 13D. ProjectCostEsftlates . ... 13

Tbis repot Is bad on the findinp of an appraisa mision wich visited China In May/une1992. Ptojea tem membes uded Mr. Cado Riedd (Principal UbanNWater SuppyEn and Task Manar), Mr. George Plant (So Soatary Enginer), Ms. ElizabedtRanidn (cnomist), Mr. Wlliam KrNase (Financid Analyst, Consultat), Mr. Osam BIeda(EngieerConsultat), Mr. Edward Ke-Siong Hum irnmeta Eqgnrbm, Consultant),Ms. Xeng Llu (viron tl Engnew, Consultant), and Mr. Chieh WuEngier, Consultant). Pee reviewers for the project we Mr. G. Y s (Wate ndSanitn Advisor, NUW), Mr. S. Choi (Sfio Eca mist, AST" and Ms. A. Naam(dior Financial Anlyst, EC3IV). Ihe maaig Didon I EA2E. Th Dision Chifis Mr. Zah Ecok and the Diector is Mr. Shahid Jxvd Burki.

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E. Fincing Plan ......... ................ ........... 14F. ProjectManagementand memento ........ ... .. 1S

ProjecteRqtig ........ #..4 ... 4 444 *........... 1SG. Land Acquisiton ................................. isH. Pocurenment ..................................... 16I .D sburseut ... .. * ... . ..... .. . .4. 171. PjSupervison ..... . .............4.4 *444444 18-K Resetdlemet .................................... 18

4 lbe upnngAgecies ............................. 19

A. p ig and Operatig Agncis .................... 19B. andaation Manod o CWSC andCSC ............ 19C. Accounig and Audfitig ................. ........... 20D. Bilingand Collection ... ...... 21E. Personnel Margemaent . . .21

5 _1nan"aAralysis.....23

A. Past and Current Financial Condiion . . .23B. Balance Sheet and Fr-.d Assets ........ ... .. 23C. Cumet Water Supply ad Seweap Taif .... 24D. Financi Perfbmnace Forecast... 24

6 PirojetAnalysis. . . 25

A. ProJectJustifilcaon ..............*................. 25D. Ieast-Cost Solution. .. 25C. Project Benefits .. 25D. Econonic Rate of Retun .. 26E. Affordability.. 27F. Eaviromnenta Impact .... ..... 270. Project Ris. ... .. 28

7 Agrnene s Racdd and Re. ..ni.endatl.n 30

TAsS iN TmLT

2.1 Water Demand Projection 8........... ..... ..... .82.2 SewageProduionProjedon... .... 93.1 SumnmaryCostEsmates .. . .133.2 Project FnacinggPlan.. 143.3 ProcurementA ngent I ....... ...... 16

AwVI"

1. Exbstl Wte SupplyandSewereSystem . .................. 322. W Dem d and Sewr Foeass ............ ........ * . 403. Descpddn of Component .......................... 524. Project mple mentatonSchemde ... . .......... 54S. ScheduleofContractPacbgesand CostTables .................. 556. Esmated CrediDi Schedule ..............I...... . 607. SupervlonPIn ... ............................ ... 618. Proposed WaterSupplyandSewergeOrgalatos............... 639. Assmptions for Finci Projecdons ............................ . 7310. Ei in act Assessment ...... ........... ........ . 8111. ToxidcHazdous Waste Management and Indusid Park Studies - Daft

TonsofReferen ......... * * 9512. Mangemet and Operationl Support fo Changchm Water Supply

Cmpany: Draft Descridon ...... ....................... 9913. Ecooic Rate of Retun Tables ............. . 10614. SelectedDocumentsandDataAvaiablein theProjectFile ....... .... 108

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BJRD No. 24063 GeneralAu .............................. . 120I3RD No.24064 WateSupplyFacilities .......................... 121I'RD No.24114 SewemrFacilides ...... ...................... 122

1TH SECTOR

A. SECTOR BACKGROUND

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1.1 China has a rapidly growing urban population of about 300 million, larger thanthe total population of the United States. Although about 70 percent of China's 1.1 billionpopulaton lives in rural areas, emigration from the rural areas accouns for most of the recenrpd urba growth. 'here are now more ta 150 cities with populations of at least 200,000sad thouands of smaller towns. Even though compared to other developing countries the

ren urban growth rate in China is low, it is China's size which makes the development ofuban infrastructure, in particular, for water supply and pollution control, an Immense taslc

1.2 Over the past 400 years China has been a country where survival of its peoplews closely linked to water. The location of large umbers of its population along its

rourses meant tht they were constniy thratened by severe droughts or catastrophicfloods and epidemics of waterborne diseases. China has over the centuries developed a cultureof hygienic habits which have dealt well wfith the disease rsks related to water consumption and

ation. The introduction of modern urban water supply and sewage collection systems wouldOrher conute to improvement In the health status of the population.

Wat Resources

1.3 RaIl is bigbly variable over China's extended territory, resulting in markeddIfee in availability of water resources. China's mean anmnal rainfal ranges from2,400 -m to less than 25 mm. The central and northest regions have a mean annual rainfalin the range of 400-1,000 mm, while the northwest half of the country receives less than400 mm in the average year. Ite rainfal pattern in densely populated eastern China isdomnated by the southeast monsoon. Although China is reported to have more thu 50,000rivers, only 1,580 have catchments greater tham 1,000 km2 and only 79 exceed 10,000 km2. Them anmnul runoff from the total land surface is about 2,600 biBlion ni. In all cases the runoff

is highly seasonal, with most occuring in late spring to early auum

Wat Supply

1.4 China has made considerable progress in harnessing its rivers and in construingwater supply systems for its urban populations. In 1949 there were only 59 cities with watersupplies with a total capacity of 2.4 mDilon m&/day, providing water to only 9 million people.in 1986, 302 cities had potable water supplies with a capacity of about 42 million m3/day. Tothis sbould be added the water supply developed and used by idusties with a capcity of about

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63 milion mslday. t Is esmed tbat now pracdcally all major cites (353) have water supplysystems which provide, mostly througb hous connections, the minimum necessay supply ofWa teO their populatios and Industry.

1.5 Watr supply covege In small (county towns) ks markedly differet. In 1989it was rpntd that only 26 pecent of those towns (3,068 towns) had water supply facilites,seving about 50 million people. The cover rates in those towns are still low-ranging from27 to 73 pe, with tin rates from 17 to 60 lcd. With the rapid inaking place ughout Chia, water available from the piped systems in both large and smalltowns i ofte indeqat ad indutries awe compeed to develop their own supplies orconute heavfly to the onuction of public system. Only about 30 percent of the rouly770 mlion rural population has adequate water supply. The recently approved Rura WaterSupply and Sanitation Ptoject focuses on this sector (Credit No. 2336-CHA, approved 1992).

Poluon Control

1.6 China's traditional system of nigbtsoil collection in the cides graualy h beingreplaced by piped sewage collection systems which appear to be deficient in terms of design,construction quality and maintenance. China has used nightsoil as agricultural fertilizer forceuries and hygienic practices of the general population have dealt atsfactorly with risks ofdisease related to this method of domestic waste disposal. However, the use of nightsoil byfame i less in demand now due to the widening use of chemical fertlizers and an increasigreuctane to handle nightsoil. Also, many industries have some form of treatment for theirwastes but few of these systems are operated efficiently. I'he more troublesame aspect of thepresent siion is that Industral waste dischrges, Including metallic and toxic chemical wastes,are very often mixed with domestic wastes. These wa_twaters are then either spread onamad or form part of irrigation water, with the risk that some of the comtients may ente

the food chain. In many urban areas, sewage is discharged unted to the neaest watercorse,with assimilative capacity being exceeded in many localized reaches of stream and rnrs. Inaddition, treatment acilities for domestic and indusi sewage are either absent or grosslyInadequate in most cides.

B. SECTOR SmunONs

1.7 Ihe Changau Municipality was recedtly elevated to an independent economicplanming uniL Municipal governments in China have much greater responsibilities compared tocities in other oountries, because in addition to the service functions of a Municipality inindustrial countries, they are also responsible for productiv enterprises such as those forconstruction and manufacturing. For example, in Changchun the municipal government consistof S Commissions (Planing, Urban Constuction, Foreign Trade, etc.), 42 Bureaus (MachineIdustry, Chemical Industry, Agriculture, Public Health, etc.) and the Courts. The dalyopaions of the municipality are managed by a large management team consistng of a Mayor,an execuive Vice Major, six Vice Mayors and a Secretary General.

1.8 Ihe Cetal Government has decentraized most of the funcdons relating to urbanmanagement to the provinces and municipalities. As a rest, Central Goverment functions inthese fields nDOw are limited to the provision of broad policy and tehnical guidance and sanctionof major investmaent projects; all urban projects exceeding Y 200 million stil reuire rovalof the relevant technical ministry and the State Planning Commission (PC). Because of ths

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tole chage and because most project financing no unde the control of the localgovemen=, the central thical ministries have a limte role in the munipal dociion-mrlng process.

1.9 lh. Minstry of Construction (MOC) is the agency responsIble for urb/regionIfrastructure .4velopment planning at the naiona level. It also provides guidance to theprovincial and local autoities on urban land use, infrastructbr development plam and

_ nimikoxladm on tec al standards. The National Euvironea Prtectio Agen(NEPA) is responible for tting ro policies and prvding guidance to the provinceson envhonmental matters. The Minitry of Water Conseanucy (MOWC) i the centralorgnzaon responsible for detemining policies on the allocation and managemen of sucewat- resources in the coury. mplementa of these polici es caried out tough rverbasin commisson, provincial wat conservancy deQp ents and waw conserva bueasat vario local goverment levels. However, allocation iad management of gouna arethe respoibility of the Ministry of Geology and Mierals and the localgoveornm deparments and bureaus.

1.10 Tbis decera i and the high level of uran infraucture ep bylocal gverm have significaly increased the autority and responsibilities of mnicipalgoernm . Thi in tu i leadg to demands for bettwer ornization and management ofmunicipa services. In the water supply and polutlon control areas, funcdonal separation ofthes sector from the gener urban bureucrcies is occring, a fir step to deay idenableaccountabilit for the performance of those sects. Investmet planig and control ofmunicipl fiances is manage by the Municipal Planning and Finance Bureaus, hich needmore techical and maageria skills to enable them to respond to the growing responsibilities.

C. MAOR SECmRAL TSU

1.11 During the 1960s and 1970s China's Ceiral Government coned onidstrialization in u areas, but left urban services neglected. AldMugh in the past decadeChinas cities and towns have Invested considerable reources to improve the water supply andsantation sectr, the sector will need to cote lrge-scalo investment for the foreseeable futureto sustain economic growth and impro iroment quality. Carefl nvestm plainwith prudent selection of invesent priorities are theref critical issues (see paras. 1.19 and1.20). linasingly, the sector investments will need to be funded fiom local resources, andthereore, upgading of local government and utility finaing i another area of critical

1.12 Whilo ther is reognition at various levels of govenme of eXcessivO water Usby industry, me_ares to convert ma ng processes to consere water are often costy.To address the sitution, Chinese citie re curtly setting wae use quotas for variousindustries, with heavy financial penaldties for exceding the quotas. The rles for quot levelsare, however, arbitrarily defined, and the penalties charged do not reflect rsource cost.Formalization of a policy to tie these charges to the marginal cost of watr productio anddistrbion will be needed to ensure economical use of water. Reaistic comumption levels onthis basis could then be obtned to pride a more reasonable base for cities to plan their watersplies.

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1.13 In most cities, municipal water supply s organized as a muicipal deprtmor water spply omp under the Municipal Public Utiity at Uba Construction Bus.FN authorty is wtb the mayor or one of the vice-mayors. Many resitios ist whichmpeo the operationof te water supply enttas a true public utity. For ample, they doot have fnadal autonomy and are dpdat on the municipaity for long-term plnning,

capital ilnv ent, settin waer rates, tratment of surplus eang and meetin operationaldeficits. To Improve perfrmance In the urban water supply subector, there needs to bedelegaion f great opratil autonomy to the water supply companies, together with stricterfhicW dscipline and accounability. An established water supply company operating on awell-orgni, efficient, commercial basis must be assured when consideration Is given to

panslon of watr supply services or Inoduction of water pollution control facilities. OnDy Injl way can cost revy and oper-aional objectives be certain.

1.14 Th ea demand for water pollution cool will need to be folowed bythe establi of autonomous sewerage utilities. At present municipl sewae sytm armosly mnaged by municipal constuction dartments. As long as there are no sewagetratment plans operated by those mnmicipalities, from a technical point of view, it is logical toinclude the mintenance of sewage systems with the general road mainece. The constructionof ewage tratment plants, however, requires efficient operation and mainteace of these plasand the control of pont discharges into the sewage collecton system, especially from Industry.The management of !he billing and collection of sewerage charges would be most efficient ifhandled by the water supply companies.

1.15 NEPA and the prolcial and municipal Enviromnl Protection Bureaus(PBs), as wel as Urban Construction Commissions (UCCs), have established guidelines andrl s on quantty and quality of industral effluent discharged to sewers or to watercourses.However, it is often politically too difficult for these agencies to deal with large industties whichin many cases noe the major pollutrs. Thus, pollution abatement measures, such as the levylnsof dcares based on effluent quality and quantiy, have ofte not been effective. The chargeshave frequently been forcibly depressed so that polluting industries opt t continue to pay thechages rather thaD take appropriate measues to reduce pollution. Most provincia govermentsare aledy aware of the need for environmental protection, and some measues are already beingtaken There is an urgent need to strengthen and equip EPBs and UCCs, and to trdn their staffto carry out their fumctions more effectively.

1.16 Very large investments wil be made in the water supply and sewerage sectorsin China over the next decade and beyond. It can be assumed dat the urban popuation nowserved with water supply and sewerage systems is about 120 million and tat this should increasew 600 million (ess than 50 percent of the totad Chine wopulation) by 2010. This is an increaseof 480 million people to be served. A minimum Investment of $150 per person to be served,would imply an investment of $72 billion over 20 years, or roughly $3.6 billion per year. Inthe Implementaion of such a large program, there Is potential for wasting of resources. IhereIs a need for ineased peraatng efficiency and improved construction practices and operationand . Iiherefore, there is a requirement for betetr sector analysis and policyformlation, techical as wefl as financial, which would lead to rational priodization ofinvestmenlts.

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D. PREVIOUS BANx GROUP INOLVEMENr IN THE SEIOR

1.17 The Bank Group has thus far approved six projects in the water supplylsatonsector in China. These projects have, for the most part, proceeded satsfacrily, with telyin2plenentat on. tional and financial/commecial reorms bave been confirmed to be themajor Issues to be addressed. The projects are:

(a) Rural Water Supply Projt' (Credit 1578-A, SDR 82.1 million,1985)-which financed equipment, goods, civil works, traning, and todevelopment of management and monitoring systems for water supply systemsin about 4,650 villages, within four provinces and Beijing Municipality. Theproject was completed in 1991 and a Project Completon Report has beenprepared (Report No. 11251);

(b) Shanghai Sewerage Project (Credit 1779-CHA, SDR 78.9 mlio; Lon 2794-CHA, $45 million, 1987)-which finances a link and intercepting sewer systemto collect, transport and treat sewage for disposal in the estuaiy of theChangiang; studies on management and organizaion, sewerage tariff, HuangpuRiver Basin Management, and sewer system rehabilitation; and staff training.The project is being implemented on schedule, with project completion expectedby June 1993;

(c) MediumaSized Cities Development (Credit 2201-CHA, SDR 62.2 million,Loan 3286-CHA, $79.4 million, 1991)-which finances invesm in educatinand health services, housing, tsansportatlon, water supply and sewerage,industrial development and pollution control in three medium cities-hanphou,Shashi and Luoyang. Included also Is technical assistance for urban planningand management. Project irplementation began in Jamnary 1991 and isscheduled for completion in December 1996;

(d) Uaonlng Urban Infatur Project (Credit 2219-CHA, SDR 54.2 mIllion,1991)-which assists in the financing of the nitial phase of a long-terminvestment program aimed at addressing the shortages and poor qualt of watersupply in the three cities of Shenyang, Fuwin, and Yingkou, as well asshortcomings in urban transport in Shenyang; -

(e) Beijing Environmental Project (Credit 2312-CHA, SDR 60.1 million, Lon3415-CHA, $45.0 million, 1991)-which is financing Investmanis in districtheadng, sewerage, solid waste management and industi pollution abatement,and technical assistance for environmental master planning, hazardous wastecontrol and institutional management;

(f) Thnjin Urban Development and Envionment Poject (Credit 2387-CA,SDR 73.3 miUlion, 1992)-which is fiancing investments drainage, seweroge,solid waste, roads, traffic management and urban transpor and for traing ofmunicipal staff in operations. Technical assistance is being provided to improveTianjin's planning and municipal management capacities; and

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(g) Rural Water Supply and Sanitation Project (Credit 2336,CHA SDR 78.9million, 1992)-which is fnancing Investme In wat supply, san onfacilites, health and hygiene education and tchnica asistancein 75 poor andwater-scarce courles In six undedeveoped Inand prvinces.

1.18 Sector work carried out by the Bank/IDA includes: (a) the Sh a SecwtM (Urban), Report No. 4227-C , Decmber 1982; (b) Report No. 5206CCHA,May 1985, which Includes a chapter on spatial and urban Issues; (c) an uban ctor survey inLslong Pvnce in 1985 in coopeaon with the United Naons Doevopment P mme andthe Australian Intenational Development Assistance Bueau; and (d) an Urban Sector Study inZhejiang Province, China-Zhejiang: Challenges of Rapid Urbanization, Report No. 6612-CHA, August 1987, and (e) the Envirownenta Str Paper, Report No. 9669-CHA, Apri1992, which focuses on the development of long-term environmental protecton and naurlresources policies and programs.

E. ROLE OF Tm BANK GROUP IN =E SEcroR

1.19 Ihe Bank/IDA sees its principal role as fosterig a continug dWogue on sectorissues and Wtions, thereby supporting and implenting the Central Governmentsdecentraiztion strategy and delegaion of responsibility for the prvision of water supply andsanitation services tc municipalities. ITe Bank Group's apprach ams at the creation and/orshening of the imtitutionallfinancial framewors which lead to lncreases in financin fowsand improvements in: (a) cost recovery, (b) investmet planning, and (c) Implementation andfiacing capabilities of local governments and the companies/entities they conol.

1.20 Sufficient experience has been gained tough Bank Group inesmet In hoesector to date to prepare a comprehensive analysis of secora issues. The Cental Governmand the Bank Group are planming sudies to prepare Provcial Sector Development amdInvestnt Plans during 1993. Such studies would have a regiona focus and be caried out inone or two provinces initially, with particular attention given to cost recovery and opatonlefficiency issues. The studies would produce comprehensiv sector rports whih would includea siuation analysis, a sector development strategy, and a fiamewok for investment plans. Theyare expected to be the models for other provinces to use to develop sound strategies and basesfor future sector investments. These plans also will pwvide guidance to the Central Governmeon sector issues and form the strategic framework on which future policy and investmentdecisions can be based, as well as servig as a coordinaion instubmn for the mobilizadon ofdonor sance to the sector.

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2PROJECT AREA

A. UWAN GROW AND ECONOMC ACmm

2.1 Chaugchun Municipality has an area of 18,880 km. Ihe area DOw covered bythe City of Changchun is pproximately 107 mw and preed to grow to 150l k by theyear 2000. Major expansion is expected In the south and southwest parts of the city with lessepasion possible in the east and the west. Due to family size limions and control on citysize in ChiUs, the population of Changchun has grown at a modest amnal rate of 1.5 percentduring 1985-90. The population of 1.8 million in 1990 is esdmated to grow to 2.1 million Inthe year 2000, with an esimated annual populaion growth rate of 1.5 percent, deasang to0.7 percent between 2001 and 2010.

2.2 Cbangchun depends on its industry for economic growth. In 1985 Industryaccounted for almost 85 percent of the cits GDP; in 1990 it rose to 91 percent Producvtof the light Industries is slowly gaining momentm I 1990 light Induty conited47 percent to. the city's Industri GDP, and in 1991 almost 55 percent. Cumenty over 3,400factories and enterprises are located throughout the city and include truck, tractor, bicycle,railcar, Instrument, chemical, pharmacical products, texffiles and food factories. For example,an automobile manufactring plant (VW) is currendy under construction and scheduled toproduce 100,000 units per year in 1995. The long-term plan for the city, as approved by theCentra Govermment, encourage industial development in three major areas: (a) automobile andtrsportlagrlcultural equipment manuf g, (b) food processing industries, and (c) high-tecnology industries serving (a) and (b).

B. REAMAL AND INDUSThIAL WAMR SUWLY SERVICES

2.3 Within the built-up area of the city, which is the service area of the CangchunWater Supply Company (CWSC), most of the residential, instiutonal ad IustrI users areserved by two water treatnent plants located within the city. The water dItbuton systemconsists of about 220 km of trun mains (300 mm to 1,000 mm), and many smaller (ess tha300 mm) distribution mains which branch from the truak mains. Due to corrosion, low-qualitypipe materid, poor Joints, and lack of system maintenance, unacuted-for water is estimatedto be about 20 percent of total water production. The act status of unconted-for water isdifficult to quantify; 40 percent of CWSC's customers remained umned in 1992. Ihere were6,000 commerial connections, of which 40 percent were metered and 2,500 huIustrIcoectins, of which 72 percent were metered. The extg water supply system is deribein Annex 1.

2.4 Although the city is highly indu.1rialized, it is situated in a water-short region.Throughout much of Changehun's recent history, water supply has been unable to keep pace

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with ncreasing domestic and indusial demand (see AMU-Water Demand and SewagForecasts, Figre 2).

2.5 Industry is expected to grow rapidly, both in the mmber of establsbmen aswell as in production output. In recent years, growth in both industrW and domestic waedemand have been equal (about 35 percent each). ITe remainder represenmt stitutioacommercial demand. However, with already approved expansion of industry and theinrouction of new activities, this proportional split is eWpected to chnge, wh Industyacounting for about 46 percent of demand by 1997 and residenial demand acounti fo32 percent.

2.6 Resictions on water supply have been imposed on both industria and dometcconsumption, and availability of water supply wfll continue to cOnDStr Consution tthe present proposed project and beyond. It is eated that the production capacity in the city,approximaely 409,000 m3/d, fell short of demand by about 50 pecent in 1991. By 1995, thsshortfall is expected to increase to 60 percent. In 1991 the shortfaUl of water available forinsttutdonal use was estimated to be 4.2 million rm'. The average anmial water shortage in theindustria sector since 1985 has been about 4 million mi. Table 2.1 mmm the waWdemand projection through the year 2000.

Table 2.1: WATER DEMAm PRojcTioN('000 lIday)

Categories 1990 1995 2000 Growth Z p.a.(actual) 1990-2000

industrial 315 383 466 4.0Residential 230 302 395 5.6Institutional 107 118 131 2.0Commercial 15 16 17 1.3Unaccounted-for 167 205 252 4.2

Total 834 1.024 1.261 4.2

C. WATER SUPPLY MASER PLAN

2.7 In 1988 a feasibility study for a Changchmn Water Supply Project was completedby he locd design instiu (Jilin Hydraulic Exploration and Desig Institute; Chin NothestMunicW Design Ibstitute; and Changchun Exploration Desig Inste). At the suson ofIDA in December 1989 and during the following preparation phse, the proje eanded foma sw imestme project for water producdon for Cbangmn to a opeiaction and investme plan in water supply and pollution control for the cit. As a resul, afeasibility study was undertak by international consultants funded by the Canadian InteationalDevelopment Agency (CIDA). Through these studies, a long-term detaied Water Supply MterPlan was developed and priority investments identified for Changehun Municipality. e

iwesMint proposals included additional water tanmission mains, water treatment and

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distribution facilities; institutdonal developmet to strengthen the wsr supply was alsorecommended.

D. R NA AND INusruS IA SEWAGE DSwoSAL

2.8 Approximtly 40 to 50 prcet of the city is seced by swers. Historicaly,the sewe system in Changchun was developed in the various drinae are using the shortestrout, to discharge Into the streams, rivers, ponds or drainage cou within the cky. Somesewers, particularly those in the predominantly indust easter area of the city, date to the1930s. About 67 percent of the sewers were built prior to 1940. Much of the sewage colleconsystem (60-70 percent) is in poor condition due to lack of mainteance and repair. In the olderof the nine drainage districts of Changchun, combined sewer systems conveying domestic,industri and stormwater flows are common, with newer oonstion incoporatng separatesanitary and storm sewers. The sewer system consists of about 324 km of combined sewers,243 km of storm sewers and 212 km of sanitary sewers. In 1988, a 3.2 km inteceptor sewerof 1,800 mm and 2,200 mm concrete pipe was Installed in the bed of the Ytong River fromYongan Bridge to Dongda Bridge. This interceptor sewer cmrently discharges raw sewage intthe Yitong River, downstream of the Dongda Bridge, at a tempormy lowlift sewage pumpingstaton. A more detailed description of the exting sewerage system and industial wastedisposal practices is given in Amex 1.

2.9 The large industrial and population conceon, together with a lack ofeffective intrvention by Changehun Municipality, has cased srious water pollution problemsin the receiving waters of the city. Most sewage is disbarged untred to the Yitong andXina Rivers. The situation is most severe In the Yitong River immedaty downseam of thecity core. Only one small, mixed domesticindstrial, treament pla of the No. 1 Auto Plantis being opaed. In the 1960s a primary teatment plant was built in the northeast area of thecity, wih the intenon of reusing treated water f rigation. For unknown reasons this plantwas hardly ever used and is in a condition of total disrepair.

2.10 An analysis of the existing situation indicates ta the ratio of sewage to watersupply is about 0.8. This factor was applied to the projected water supply (by use category) toproject the sewage volume. Table 2.2 summaizes sewage generation from 1990 to 2000.

Table 2.2: SEwAGz PROUCTION PftRO rMONC(000 mIday)

Categories 1990 1995 2000(actual)

Residential 184 241 316Industrial 252 306 372Institutional 84 94 104Commercial 12 A 13

Total 2 653 805

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E. SEWAGE DISPOSAL MA.¶ PLAN

2.11 Because of the lack of existing sewage collection and treatm faci, theachievement of full sewage treatment objectives will req the establihment of a well-

mlWing sewerage entity, and large investments. Mierefore, a Swge Disposal Mast Planfor Changchun was prepared by international consultants (para. 2.7). The Maser Planrecommends a 20-year program of investments for trunk sewers and tratment faciities. Aphased approach is proposed with implementation over a relatively long period of dme(approximately 20.30 years), to resolve the many interrelated problems. Phase 1, which wMbe addressed by this project, will lay the base for the implementation of such a strategy. Theproject lso will provide the first physical works of the program, indcting constuction of anInterceptor sewer and a major primary sewage treatment plant on the Yitong River downsteamof the city. Operational data need to be gathered from monitring the primary treatment facilityto be able to design the secondary treatment plant in the second phase of impl i

2.12 A number of other activities were also proposed, including the establishmenof a Changchun Sewerage Company (CSC), creation of industri estates, separation of housingfrom work places, development of a hazardous waste management program, including a diposasite, and the establishment of an effective regulatory and enficement framework. Ihe estimatedcost of priority urban sewerage investments was about Y 275 million ($50 million).

F. PUBC HEALTH

2.13 Public healdt in Changchun Municipality is generally good. Since the 1970s,there have been only isolated and localized occurrences of typhoid and hepatis B (and somefluorosis). The Government places a strong emphasis on disease prevention, spending aboutY 1.0 million per year on immunization programs specifically aimed at typhoid and hepatitis B.in additon, schools offer extensive health education with emphasis on good hygiene andsanitation practices. Gastrointestinal diseases are of some concem, but they occur mainly duringthe summer monts and are thought to be caused by a number of reasons, not all related to theciy's sanitauy conditions. Nonetheless, there is the potential for serious public health problemsin Changchun, particularly given the growing populaion, inadeqacy of extg water andsewerage systems, and ongoing industi expansion.

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3THE PROJECT

A. Pztojcr OBVES

3.1 The project objectives are to: (a) Improve water supply in ChangchmnMuoicipality to met the domestic needs of the urban populaton and to support industialgrowth; (b) reduce industra and domestic water pollution through physical wors, strengtheningof ins"tions, development of reguations, improvements in operational management, andchanges in pricing policy; and (c) create a first demonstration project, where the lessons learedcan be shared with other municipalities in Cbina (paras. 1.11-1.16. The instiutionalstrengthning objective aims at assisting Changchun Municipality in establishing appropriatesector institutions, policies and regulations. The present organization of wate supply andseweage services is fragmented among planning ad design, construction, and opeaions andmainteace (O&M) and is distributed among several municipal agencies. Ihis has createdmajor problems of coordinatio The project supports the concentration of comprehensive watersupply activities in the CWSC, with a similar plan being proposed for the recendy establishedCSC. These actions should encourage more efficient use of water resources, more prudentinvestment decisions, and strengthen the planning and operational capabilities of CWSC andCSC.

B. PNoJcr DESCR]PnON

3.2 The project is aimed at improving the existing water supply and sewage disposalsystems for Changdhun. The existing water supply capacity will be expanded from the present438,000 m3ed to 794,000 me/d at completion of the project in 1997, whfle a central sewagetreatment facility capable of providing primary treatment for the city will be constucted. Thewater supply service coverage is planned to be increased from 90'percet to 97 percent duringthe project execution period.

3.3 The proposed physical works for the water supply project include theconstuction of transmission facilities to convey water from the Second Songhua River toChangchun via the Chalu River and the Shitoukoumen Reservoir, construction of pumpingstation at Maja, Tunshansi, Dasui, Shiteukoumen Reservoir, and Xinlicheng Reservoir,construction of Water Treatment Plant No. 3 and temporary upgrading of Water Tream PlanNo. 1, construction of supply and distribution system water mains in the City, and technicalssistnce (TA) to upgrade the technical, administrative and operationmintenance sills of

CWSC to steamline the existing stcture into a more efficient and effective operat company.

3.4 The proposed physical works for sewage disposa and environmental pollutioncontol include the construction of an interceptor sewer and a primary treament plant, andpwrcrment of eqipmet and instruments for water pollution monitoring. The primary

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treamen plant (North Suburb Sewe Treatment Plant) wil treat 368,000 m'Id of sewg fromthe Ytong River drainage area collection system. t also niludes ecncal assite to prparefor the implementation of the second phase of the Changhumn sewage disoa master plan,strengthen water pollution control regulations and enforement In addition, as part of the

nage men t supporto CSC, technical assistance s planned to assist CSC to (a) ass polutionloads, (b) develop stgies for polution abatemnt, (c) set dicag standards for Industriesand (d) set pollution chges and flnes.

3.5 Th1 instittional development forts of the project include the provision ofconsultant services to: (a) assist In project mplementaon; ( reore CWSC ad developCSC; (c) develop training programs for the staff of CWSC and CSC; (d) establish apropiatpricing policies; and (e) promote measures for water conservation.

3.6 Details of the various project components are presented in Annc 3. A sumaryof these components is as follows:

(a) Raw Water Transmission. Constuction of intake work and a low,liftpumping station (475,000 m&/day) on the Second SonghDa River at Maja,upstream from Jilin City; a 5.2 Im low presr conduit from Maja to theTuashazi booster pumping stion; a 7.9 mn tunnel at Laoyelw a secondbooster pumping staion at Dasuihe; a 39.8 km transmission pipeline (1,400 mmand 2,000 mm diameter) from Dasuihe to the dtig point on the ChatuRiver, 22.8 km upstream of the Shioumen Reservoir; and a 12 km acoessroad to the pipeline discharge point on the Chalu River.

(b) Urban Water Supply. Construction of additiona capacity to an exisfing neWraw water pumping station at Sh Resevoir (263,000 melday); an8.7 km pipiHn (1,600 mm) from h to FPgniugou; a boostpumping staion at Fangniugou (263,000 ml/day); a 31.9 km pipeline (1,400 mmand 1,600 mm) to Wat Treatment Pla (WTP) No.1; an Inte and raw waterpumping staion (234,000 m?/day) at the Xhicheng Resrvoir, a WTP No. 3(220,000 m/day); a twin 13.4 km pipeline (1,000 mm and 1,200 mm) fomXWicheng Reseroir to WTP No. 3; a pumping station at WIP No.1 andbooster pumping station at Zhengyang; and 193 km of new and replacementwater mains in the distibution system (75 mm-1,200 mm).

(c) Sewage Collection and Treatment Construction of a 10.4 km intceptorsewer (800 mm-2,500 mm), and prima .sewap teatnt plant(390,000 m3/day).

(d) Miscellaneous Equipment and Vebieles. Supply and stlatlon ofcommunication and moniting equgnent; supply of mie sequi ntfor water and sewage operations and mantn.

(e) Project DsIgn and Construction Suprvion. Foreiga consultants will assistthe local design companies with detaied design of al comnets and beresponsible for the quality of the designs. Foreign consultats wim also assist theProject Management Office (PMO) with constauctio supersin

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(f Tecbncal Assitne (Capacitylildlg. Tehical assisan for: (i) aaagm suport pac eusg e to prvie techical, finanil

operations and a d tring advice to the managemen of CWSCand CSC; and (i) implemeon of a toxic and hazardus waste managemetad industria relocaon stdies.

C. PROJECT PREPARATION

3.7 The CIne project team bas engaged fte same local design inst_e, whichpred the oigia feasibility studies (para 2.7), to cary out detailed designs and thepre ton of tender documenb. In addition, in August 1992 the project team engaged a fimof ftelp consultants to provide backup for the more complex design feures and for assistancewith spvi ion of construction.

D. NwOJEcr Cosr EsIMATuis

3.8 Total project costs, including contingencies, are estimated at Y 1,377.4 millionM5251.4 mMlion). Ihe freign exchange reqrement is $125.1 million, or 50 peent of totacosts. Pice contingencies are esdmated at Y 121 million ($22.0 million) or 11 percent of basecosts. Table 3.1 shows a bekdown of the project costs by major project component Detailedco estmates are provided in Annex .

Table 3.1: SummARY CosT ETuMTes

Foreigny minilon S ilos at 2

it Lca. Jos Total 4cal Fore.gm Total of total

wateTrb_aeuieSee 198 244 442 36.0 44.5 80.6 55Urban Water SUpply 187 198 385 34.2 36.1 70.2 51Sewage Coll.eCionITreatasIt 111 89 200 20.3 16.2 36.5 45

eCrbsM1=a Ase1ttanCe 34 36 70 6.3 6.5 12.8 51

aLsiSe COst 530 LIZ 1.7 98 I,103.3 ,200.1

Pbyoa Coutiuonless 78 82 160 14.3 15.0 29.3 51Price Coatugencies 82 38 120 15.2 6.8 22.0 31

Total Project cost /a {90 687 1.377 J1 .3 125.1 ,251.4

Intereet during ConstruCtion Lk 82 0 82 14.9 0.0 14.9

Total YinanCina RAufred Ma 687 JAM 14. 125.1 266.3

LA luding lad cst of Y 54.1 million ($9.9 million).^anI duig consacon is cacuaed baed on the pojected di e

--des

3.9 The project cost estmaes are based on etmates fom the consuls' feasibilitysdes. The uni prices used by the conutant were based on unit prices from recentconstuctio con s in China and quotations firom local suppliers. Those costs were updatedto mid-1992 price levels during appraisal. Physical contingencies of 15 percent on all watesuwpply and s a civil works and goods and 10 percen on technical assistance, have been

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allowed. To provide for inflation during project Implementation, the following amnal escalationrates have been used: for local expenditures, 6.0 pecent for 1993 tough 1998; for fo1reexpendIures, 3.7 pecent for 1993 through 1998.

E FINANCaNG PLAN

3.10 Ihe proposed IDA Credit of $120 million equivalent would fnce about50 percent of the project costs, exclusive of land acqui on cost and interest durnconsruction. Other sources of financing include the Central Governmen, Juin ProvincIaGovernment, and Changchun Municipality. The Cental Govenment, lJin PmvicaGovernment and Changchun Municipality confirmed to IDA their agreem on sha of projectfuing as equit contribudons. The financing plan for the project is smmuized in Table 3.2.The Changdum Municipal Goverment should not have any problems in meedng its share ofproject cost. CMG will conttibute an average of Y 36 million per yea wit high contationof Y 55 million in 1996 and Y 49 million in 199S. This is well witin the city's normal capitalspending. The city plans to spend a total of Y 177 mlion in 1996 and Y 161 mflion in 1995for capital construction.

Table 3.2: PRonwr FINANCING PLAN($ million)

Local Foreign Total Percentage

Government of China 25.5 5.1 30.6 12Jilin Province 54.7 0.0 54.7 21Changehun Municipality 61.0 0.0 61.0 22IDA 0.0 120.0 120.0 45

Total 141.2 125.1 266.3 100

3.11 Changchun Municipality has agreed to increase the water tariffs to take efectas of Jamuary 1, 1993. This increase is necessary to help fane the project ChangchunMunicipality provided IDA with evidence that the tariff increase has been apprwved, and will beimplemented with effect from January 1, 1993 (par 5.10).

3.12 As a result of increases in project costs over earlier estimts, the municipality'sshare has also increased. Changchun Municipality has provided IDA with a schedule, acceptableto IDA, of the funding contributions and schedule of disbursements from the municipality for1993-95.

3.13 The IDA Credit would be made to the Centr Govenmen on staxard termsfor a duration of 35 years, including 10 years grace. The proceeds of the Credit wodd beonlent to Changchun Municipalith- to be repaid over 15 years inciuding 5 years of grace at aninterest rate of 5.1 percent per annum. The municipality would onlend the proceeds to the newlycreated CSC at similar terms and to CWSC at a vaiable rate equal to the Bank rate plus a spreadof 1.5 percent per annum. CWSC and CSC wfll bear a fixed commitment charge of 0.5 percent

ad th foreig exchango risk. he exeton of Subsary Loan Agiwnents betwnOianghw MwdpaltY and the CVSC 4ad CSC Is a condton of e,tlWnes f the IDA0odlt. AsepaweProjctAgrem ndudigoperatona,flnanclal and monoiEngconans,wil be execed beween DA and Oaangchun Mwudpaity. Aprovalof theDevelpm CredAgrmen and Awm Pect Areement by the State CorcU Is a COton Of Crdt(5clees.

F. PROjCr MANAGEMENT AND IMmnTTON

3.14 Project implementation is the direct responsibility of the Qangchun WaterSupply and Environmena Project Mangement Office (PMO) located in CWSC, and wil etendfiom 1993 to 1998. lbe PMO was established on March 19, 1992 and appears to be fuctionngwell. It reports to the High-Level Leadership Group (HLLG) under the Chargchun MunicipalGoverment, under fte direction of the Mayor, three Deputy Mayors and 11 Bureau Directors.The m_as of CWSC and CSC are also included in this group. The Senior Engine of theNorth East Design Institte Is the PMO Manager. A Chief Finance Officer (CFO) has been3ppointed and a plan for PMO stffing and acilities has been submitted to IDA. The ChiefFinance Officer and key finance staff will be on deputation from the Changchun Finace Bureauto failitate fancial functions. Ihe PMO will execute the project, and supervise and monitoral con tr and mainin the project records, including the original copies of all contracts andpuchasing documents. It wil operate on behalf of CWSC and CSC under writ ageemen.

uances were obtained that the Changehu Murlcaly wUI mainain the PMO with staffgandfactes acceptable to IDA. Because CWSC and CSC have not undertaken such a largecnstruction project in the past, they will be assisted by consultants to be retained under termsand conditions acceptable to IDA. The PMO has prepared a satisfactory project constructionsupervisionplan, includingstaffing. Maininingthe PMO, with stg and facilities acceptableto IDA would be required during Implementaion of the project

3.15 Day-to-day construction supervision wiUl be provided by local consultingegieers assistd by foreign consultants. 'Te consultants' duties include verification ofcompliance with specifications for works and goods, supervision of constuction, tesig andcommissioning of completed works, advice on training of staff to operate the completedfacilities, and preparation of documents for procuring treatment plant equipment.

r"ject Rept

3.16 Under the project the PMO will be requtred to prepare and submit to DAquarterly progress report. CWSC and CSC wil be required to prepare a year-end rporswnmarldng each conpy's actiies during the year, as well as semannual summay reprson the main deweopments and changes In the corporate plan.

G. LAMD ACQUismon

3.17 Land wil need to be acquired for construction of the water ransmission line,water treatment and distrbution facilities, and sewage treatment plant. The PMO is in theprocess of acwuring the 98 ha of land for construction purposes and another 448 ha on atmporary basis for the project Out of this, approximately 428 ha is needed for the watrtnsmission line, 8 ha for the water treatment and distrbution facilities, and 60 ha for theswge treatment site. The land is manwly used for agricultura purposes. Where wors are

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conructed on agriculturl land and buled ae cosucto the lnd would be rented duringcostructio and returne to its orgn use after completion of work.

3.18 CWSC and CSC (Pam 3.29) are rponsible for iniiat land acquisition andpaying compensation, and the Cbangchu Planing Commission (CPC) will ovse andcoordinae the activities. lhe CPC anticipat no difficulty in carrying out land acquisition andresetement. -he purchase of the land will be mostly cony?leted by 1993 and wil not detproject implementation.

H. POCUREoMET

3.19 Procurement arTangemens are summarized In Table 3.3.

Table 33: fRocuRENrr AraANc3mem(S million)

Procurement MethodProject Component ICB LCB Other NIF Total

Civil Workswater Supply 85.5 14.1 10.6 - 110.2

(30.6) (5.6) (4.2) (40.4)Sewerage 36.7 4.0 0.2 - 40.9

(14.7) (1.6) (0.1) - (16.4)aouiument and MaterialsWater Supply 61.4 9.5 - - 70.9

(45.0) (7-0) (52.0)Sewerage 3.3 - 0.3 - 3.6

(2.4) _ (0.2) - (2.6)OtherLand Acquisition - - - 9.9 9.9

(0.0) (0.0)Technical Assistance, - - 15.9 - 15.9Training (8.6) (8.6)

TOTAL 186.9 ILI2 26.9 ._9 251.4(92.7) (14.2) (13.1) (0.0) 1120.0)

Note: Figures in parentheses are the amounts to be financed by IDA, includingcontngencies. Other procurement methods include direct contractng of wodrs(e.g., power supply), and consultant services under tedhnical assistance andtainin. NIP - Not IDA Financed.

3.20 Worb. 'here is a tot of about $151.1 million of works in the project andabout $122.2 mfllion (81 percent) of that would be procued using ICB proedus. Domesticconactrs would be given IDA's normal 7.5 percent domestic preference during evaluaton ofbids. ICB procedures will be used for all contracts over $4.0 million, i.e., eight contracts. Th

- 17-

remaWin works are too small, scaed or scheduled too far apart to be put into packages tatwod be of iterest to foreign firms. Of the rmainng works, $18.1 million wil be LCB nd$10.8 million will be direct contracting. LCB procedures will be used for the many conacrequird to make improvement I the water distribution systom and to constuct several smloffice and dormitory buildings. Direct contracting will be used for the many con s that willbe made with the local power company to periodically supply connections to the many newbuildings and stations planned under the project. 'hM electricity company Is the only firm thathas th approptiate capabilites to properly make these connections.

3.21 Goods. Ihere is a total of about $74.5 million of equipment materials andveicles (goods) in the project and about $64.7 million of that (87 percent) would be procuredsing ICB procedures. Domestic manfcturers would be given a preference equal to 15 percnt

of the c.i.f. price of imported goods or the actual import taxes, whichever is less, in evaluatingbids. All contacts for goods costing $200,000 or more equivalent wfll be awarded under ICBprocedures. Conacts costing less than $200,000 will be awarded under LCB proceduresacceptable to IlDA up to an aggregate amount of $9.S mldlion. Contracts costing $S50,000 or lessup to an aggregate amount of $0.3 million may be awarded on the basis of intnatial or localshopping. LCB procedures would be used to procure the small quantities of water supply orsewerage materil needed at various times over the life of the project. Shopping procedureswould be used for the very small purchases of those materials, which are needed occasionally.

3.22 Consulting Services. Contracts for the employment of consultants would becarried out : accordance with IDA's Guidelines for the Use of Consultants. Local consultantsand counteart staff will be engaged or assigned from the local goverment departments to workalog with foreign consultants on detailed design, preparation of bid documents, project

constuction supevision, and conducdng of project-related studies. Consultingfm wl be nvited to submit proposals for conducting project-related studies. Consultantshavealready been retained to provide TA for project design and supervision.

3.23 Al works and goods would be packaged whenever practicable to attractcompetition. The procurement schedules (Annex ad list of contracts (Annex S give detailedprojecons on how and when the 23 major works and goods packages would be put to bid andconstUcted. Ihe CWina National Machinery Import and Export Corporation (CMC) has beenemployed as the project's procurement agent. CMC is an experienced and competentprOCUrement agent which is very familiar with the Banks' requirements. The project wiUl usethe standard bid docume that were prepared by the Mistry of Fance and approved by theWodd Bank Group.

3.24 Relew by MDA. AU works packages (10 contracts, 90 percent of the works)In excess of US$3 million and all goods packages (10 contracts, 94 percent of the goods) of$200,000 or more and all consulting contracts (8) would be subject to the Ban's normnl priorreview. Other contracts would be subject to selective post-award review.

L DI USEMEmS

3.25 To expedite disbursements, a Special Account with an authorized allocation of$7.0 mfllion, representing four months' average disburs , would be established in a bankacceptable to IDA. Replenishment would be made on a monty basis or whenever the SpecialAccount is drawn to 50 percent of its inital deposit value, whichever occurs first.

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Disbursements fortaing ando ntrcts for ci i works and gd, valed at less ta$200,000 would be made on the basis of Statmet of Expedir (SOBs) to be cefd byote PMO. Docume upporting the SOEs would be reaid by the PMO nd made avalaeduring the course of IDA supevisoion misions. AU other w ill be made asintfuly dom epeanditures.

3.26 The IDA Cred would be disbused agais

(a) 40 pen of expenditures on civil worb;

(b) 10 petcen of foreign expenditu, 100 pcet of local epedum (ex-factory cost) and 75 prcent of other local expeue for other em procedlocally; ad,

(c) 100 prcent of expenditures on const' services and tranig.

3.27 The project is expected to be completed by December 31, 1997 and the Credtdosing date would therefore be December 31, 1998. A schedule of esmated Isbursement isgiven in AM6. Retroactive financing of up to 3.0 mili is being pvidd fo ditu

ured after May 31, 1992, covering possible inital civil wors and goods conac, and thedesiupevision consultancy contract.

J. PRJuCTr SEON

3.28 Project supervision by IDA would require about 95 staff-weekl over h lie ofthe project, of which about 25 Staff-wees would be at headquaters for the riew: of progrsreports, procurement actions, corepondence, etc. ad 70 staff-weels would be In the field.Superision would be provided by sanitary engineerig and financial staff as well as otherwecialst in wate poluton control and enronmental Issues. ITe borrwer's contbuto to

sv isio would include regular rqerng on imple progress. A supervision plan isgiven in Anex 7.

K REsr

3.29 Ptoject preparat incuded the preparati ofa lnod acqisition and resettlementplan for the affected population. The land requiement have been divided into two categories;temporary land use and perranet land use (or lad acquisition). A Resettleme Action Planhas been developed in coordination and coopation with Changdihun Muipaity and theProvincia Land Management Bureau. This Plan provides details coneing Ind acquisiton,estimates of affected personM, compensation and reimbursemet costs, resettlement of about 60persons. IDA has reviewed the land acquisition and resetement plan ad has found it to besatibctoy. Canylng m the reseulent plan n a anuer ad accorftg to a shedulesadia ly to 1DA Is reqrea

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4THE IMPLEMENTMG AGENCIES

A. I1mwL nm Am OPERAIG AGNCIs

4.1 CWSC wil be responsible for constiucon, operato ad _ of thecompleted wate supply faities (see deaded dscripton In AzM . CWSC Is reasonablywell operated, but It wiU have to grow and improve to keep up with Incraed demand for morwaer ad ber quality service. CWSC was fomed In 1932 and is wholly owned by theCbanghuWk Municipality. It is self-finning and maintins ts own set of accounts. IDA hasrvewed * existing and proposed legal documents, Including CSC's c er, normally requiredfor the legal establishment of CSC, and has found them to be satsfcry.

4.2 Ihe Water Resources Bureams of Chagchun and Jilin Pwvince are resoibefor the management, operation and nmntenac of the source wors, ( and

llcheng Resevoirs), while CWSC is ronsible for transporting raw w , and treatig anddistributn I The ina and assion facilities constructed under the prject wil be theproperty. of.CWSC. The newly formed Changhui WatResources Company (CWRC), underthe Chagdiun Water Resources Bureau, may be contracd by CWSC to op and maintainthe watr Intake at MaJa and the transmission frm Maja to the Shitoku _ Reservoir. In thatevent, th terms and conditions of such a contract shall be to IDA. Auw es wieob e that Jln Proce and dhe mwncialtyf Oaagdc wil manta ad reglarlynpe the XldSg and Resfu rewspctvaely.

4.3 Cutly, there are no forma agreemets betwe the Pvincld ad MunicpWat Resources Bureaus and CWSC. CWSC has agreed to eslish foma contracts withths Burems. CWSC has provided a copy of the proposed e _ regg waeavailability, pricing, and faiities n to IDA, which wer found to be _bq.sgnig he agAeem ets a condon of Cet ejfrctlh.

4.4 CSC will be responsible for the contuction, opeaton ad maintenance of thesewage collection and treatment fcities serving Changchun. CSC wa established byChangchun Municipality in eariy 1992, using the eisting staff employed in the municipalseweag services.

B. ORGAnI N AN MNAGMNT OF CWSC A CSC

4.5 The Municipal Face Bureau, Ru and Urban Construcdon Commision adthe Municipal planning Commission sprvise e Municipa Bureas ad Companies andestablish policies and budgets, and approve capital exp_a. CWSC and CSC mstproposals are submitted by thei resective bureaus to tie Face Bureau ad Plamning

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Commisson ifor review. The proposals ae then passed on with r endons to the MayosOfflico and the local Peoples Cone. The Price Bureau and the Finance Bureau must approve

iffnaes.

4.6 CWSC has agreed to adopt a new organiaton and responsibiiftes byDecmber 31, 1994 &a. 4.9). lhe new arraUgement esembles the defnion of an urbanwatr supply utility in the Iuialized world, with most components of the opeaton ndmahame sevice under the authority of CWSC magement. Even though, in tem ofInteratial practice, the newly acquired autonomy and responsibflities of CWSC is standdbr Idustriized counries, it is a recent concept for China. As such major changes demand

attitude chnge, implementation of the new organization and application of its newly wonmanagement authority can take place only gradually.

4.7 CWSC's new o ional strucue should provide beter commnication,clearer lines of responsibility. It should also reduce the General Manager's direct operationalresponlities, whfle increasing his effective control through middle line managers. Figure 1in Annex shows the structre which has been agreed with CWSC to be implemene byDecember 1994. Under this structure, CWSC will have five D Managers rportingdirectly to the General Manager.

4.8 lhe objective of the newly formed CSC Is to collect, treat and dispose of allsanitay sewage in Changchun, and to collect and divert stormwater in the Changehun drainagebain away from developed areas, thus reducing flood damage. CSC would meet the statoryrequirement and crteria set by the EPB and the policies of Changchun Municipality. CSC willbe developed with seven departments, reporting to a General Manager. Its objectives, stuctureand respnibilities are described in detail in Annex . The formation of CSC represens a majorstrentheningof Changchun's capacity to Improve sewerage operations, in tem of management,decision making, and operations and maienmce.

4.9 Much of the dayD-tday contact with water conumers is through CWSC's distictofflces. Tbis includes both service and commercial matters. This will be equally importan toCSC. Assrances wre obtalned that CWSC and CSC wUl engage consutasu, by Decmber31,1993, wt Terms of Reference and agreed acdonplan and timing (Aw.LV accpable to IDA,to work out a plan to improve the management and operations, in particua the districtoperat , and to upgrade the physical facilities of these offices as well as to purchaseewipmet as part of the technical assistance under the project. By December 31, 1994, bothcoaanes wilprovide IDA wth hs acton plan, In aform acctble to 1DA. This togetherwith th abilitation and new works should improve distribution system and sewage collectonsystem management, and result in less costy and more energy efficient services.

C. ACCOU?M AND AUDrnNG

4.10 CWSC keeps its accounts on a double-entry accrual basis. I is one of only twowater cpanies in China to have a Class 2 accountng classificadon (the other is Beijing). Nowater company has a Class 1 raft, the highest raing. Under Chinaes ongoing reform program,new accounting standards that more closely resemble Western accounting praices are scheduledto become effective in 1993. CWSC wll modify its accountng system to provide reports tomeet Ch reporig and Western accountig standards. CSC will set up a similar system.Project fimds wil be used to povide necessay technical assistan and purchse computers to

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implemet the now systems. The Project Office wll keep all project accounts and suppordngdocuments. As with other IDA-finced projects In China, projct accounts will be maintdin accordance with the State Construction Unit ccountn sysm.

4.11 The Changchun Finance Bureau and the Changehun Audit Buren, units underthe hIlin Provincial Audit Burea, perform audits of CWSC's accuns. However,.thr Is noreuar annual audk. Assurances have been obtied utha annu audts of (a) project accus,(b) te CWSC and the CSC accouns, (c) the Specil Accout, and (d) the Samentr ofEWenditure (SOEs) wi be carried out by auditors acceptabl to IDA and conq*e and sewtoIDA withn sLr months ofthe end ofeach fiscalyear. hefonmats afthe accounts ad audJtsalso will be subject to IDA's reWew and aproval. The Foreig Investm Audit Deptof the State Audit Adminion wil be responsible for anmnal audits in the same manner asother Bank Group projects in China. A separate opinion wl also be giv the audit of theproject accounts, Special Account and SOEs.

D. BKWG Am COLILCnON

4.12 CWSC bills about 376,000 accounts using a mual system. Until recently,viualy all accunts were collected. In the past two yeas, there has been an inrease inamouns owed by public enterprises but CWSC expects a recent goverament directive to resultin payments by these organzations. Even, including these increased receivables, they were stillless tan one month's sales at the end of 1991, which is very low compared with other couries.

4.13 The Construction Bureau currently bill wastewater charges based on waterconsumption. All domestic customers and some nondomestic austoms are exempt fromcharges. Charges are levied only on those who are connected to the system. As a result, about1 1,000 customers are subJect to wastewater charges. CM3 collects only about 75 percent of thecharges that it levies.

4.14 By December 31, 1994, CWSC wUl develop a new coapred bilg systemat wil be usedfor both water and sewerage charges. ProJect funds will be used to deveop

the system, purchase equipment and train staff. CSC winl pay CWSC a fee for the seweragecharge billing. Assances were obained atChgdca Mkcpallty wl authze the bilnga/sewerage dcarges to all water users and cause dds extension to be carred out. T actiontogether with cmbining the water and sewerage bills shod result in increase sewerage chargecollections.

E. PERSONNEL MANAGEMENT

4.15 In 1992, CWSC employed about2,400 permanent and 700 temporary staff. hitranslates into a staffing ratio of about 8 employees per 1,000 connections, which is veryreasonable compared to other developing countries. Whie CWSC has a welldeveloped staffcomplement, the sewerage operations are understaW in all discplines from enginrig tooperations. The total staff complement for the district sewerage crews is 168 wher FacityManagement employs 165 for a tot of 333 employees. Changcdun Municipality has made apreliminary proposal to increase staffing of CSC to about 1,600 people by January 1997, to takeaccount of the new facilities being put into service. A preliina stffg proposal for CSC hasbeeo submitted to IDA. This plan wDI be developed in furter detail by the TA (pam 4.9) andfndalized by December 31, 1995.

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4.16 CWSC and CSC will crea a number of posions with new resosbIities. Toovecome the gap in exerience, Changchun MncWity is planning to ntit trainingprogam Inuding: seminas and wodrhops; hands-on d ans and training In the ueof equipme producti andlor acquisition of video ta for dwstd4proper tehniquesfor us In the administatve, accounting and techncal sectors; cresponden courses povidedby the traning group in Corporate Servie; inernational echa programs.

4.17 CWSC has agreed tat, under the project, trann ficilities will be establhedas part of to nw war teatment plant. lhese facities are Iended to serve s a model forNorteast Chia and will include both fmal hands-on traig in water supply system andsewerage operations. Funds are provided under the project forthe constuction of dhs facHiesas part of th treatment plants, as well as for the purchas of equlpment The trainn programsfo these fctie wi be deoped duing tha execution of the ptoject by the cnsutanproviding the management support (paras. 3.6 and 4.9).

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FNANCIAL ANALYSIS

A. PAsr AND CURESNT FANCAL CONDTON

5.1 CWSC. Tables in Ame3 show the resiuts of CWSCs opations over the pasttee years and the projectons dthough 2001. CWSC returned a small profit in 1990, followinga taiff Increase In September 1990. At tha time, ChangBu Municipt increasedindutrial and commeial ar by 67 percen while doubling domesdc metered tariff.However, CWSC Incurred a loss of Y 0.9 million in 1991, after hages for Inter anddepreciation. WiWh no a Increase, k expects to lose Y 4.7 million in 1992. Th loss Ii lessta the de o charw of Y 6.0 million.

5.2 CWSC'sreven 8ceasedfom Y 32 mllionin l99toY 60 nlion 1991,but wages and power costs incrased signllicantly in the past two years. In addion, sice July1990, CWSC has been paying about Y 6 million per year for raw water. The Provincagovemen has :pproved a 20 p t increase in tis dharge, but Changdcn Municipality hasnot yet implemented i.

5.3 CSC. It is difficult to demine the fuil costs of sewerage opations becauseChanagm Municipalit koe the accounts on a cash basis as part of its genera municipaaccounts. In 1990, less than Y 8 mllion was collected from tariffs. This is obvioudyinadequa in comparson to CWSC's budget of Y 70 million.

5.4 Assweraes wd obtabdthdat CNC and CwilSC mplement, byDecember 31,194, aprogram for tputwd plamdg andjoectng, andpivde byDeweberI qfeachye one copy oftheforesngpoJecos to IDA. hey wllaso a lbeme, by Decmber 31.1994, a managem nnadon system, with monhy bobmadoI on wtr demand, revm eand cos and evy sa monts provIde an aaed copy of such prjecdos to DA. Ihenagement idnaton system would inludean accountingsystomthtis capableofprodngfinai repots in both Chese and Western formats.

B. BALANCE S&i AND FED Asms

5.5 The Bala Sheet for CWSC is shown in hAM . The major change in theBala Sheet, other thn those resulting from the project, is the addition of Y 270 milion infixed assets between 1990 and 1m3 as the result of a Japanese funded program to Improve water

tuent capability. Changdun Municipality will provide the enire amount to CWSC as aneqit ntbio CWSC wil Include full depreciation In Its tariff calculations.

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5.6 ]Because of the governmental nature of current opetions, Cha_ghMunicipalty does not have tie data to prepare a Balance Sheet for CSC. ChangchunMunicdplity will have to identify and estmate the value of fixed asset transfrred to CSC priorto the preparation of the first years financial reports. Asranes uere obtaied that SmangchunMuncpaity will, by Decmber 31, 1993, r=nr ownz* of alpubikc sew aser o%wedby Oangdu nmicipality to CSC. It is not likely that CSC will collect any of the outtandingreceivables, so CSC will not include any receivables in its initil Balance Sheet

C. CurmN WATER SuPPLY AND SEWRGE TA mS

5.7 Water supply tariffs are based on metered consumption for 89 percent ofCWSC's accounts. The charge is Y 0.5 per cubic meter for commercial and industi cutomersand Y 0.2 per cubic meter for households. Unmeered households are charged Y 0.07 perperson per month. Changchun Municipality last revised tariffs in September 1990, when Iheywere incaed by 100 percent for domestc customers and 67 percent for nondometccustomers. CWSC also collects fees for connections and disconnections. The triff scheduleincludes penalties for late payments, but these are seldom needed.

5.8 Since January 1992, Changchun Municipality has been chargig sewerge fesof Y 0.21 per cubic meter based on 90 percent of water consumption, up from Y 0.1 per cubicmeter based on 90 percent of water usage. About 10 percent of the customers are exempt frompayment. Assurances were obtainedfrom Changhm Muncialty to end al commeil anddmesic exempdons gradualy and end ths prace by the tme the project Is conpted. Inaddition, levy a chge of Y 10 per square meter on new construcdon for development of nwwater distribution capacity.

D. FINANCAL PERFOiNCE FORECASr

5.9 Both CWSC and CSC will have to increase tariffs as a result of the constuctionof new facilities under the project. Assurances were obtained tt sush tarW wl hae togenerate sfdclent revenue to cover operation and mainenance cost, exclusive of iest, plusdeprecation or debt service, whidever is higher. Operating cost should iAdell paymesto ployees as wel as all minor repairs. Changclun will ensure dtat CWSC and CSC wlretain al profts during the constuction and debt rpaym period.

5.10 Water Supply. CWSC will increase tariffs by an arage of 68 percent in 19(20 fen per 1,000 liters for domestic and 30 fen per 1,000 ltes for nndomestic co_smers,with efet from January 1, 1993), to provide funding for its portion of the local share of theproject costs. This would be adequate until 1997, when it is estimated that it wil have toincrease tariffs by an average of 20 percent to cover increased operatng costs and depreciaonfr the new facilities. An additional increase of 9 percent will be required in 1998.

5.11 Sewe. CSC wil not provide any fundig for the project during theonstruction period. After construction of the facilities has been completed, however, it will

cover all costs, including depreciation. In order to do this, CSC proposes irasing Iffs andharIng all water customers as well as charging busies with own water supplies, who are

connected to the sewage system. In order to do this, tariffs wi have to incre by about100 percent for domestic customers, based on 90 prcent of water usage. An esmated incomstatement for CSC has been prepared and is included in Annex 9.

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6PROJECT ANALYSIS

A. PRoJECr JUSTICATION

6.1 Changchun has developed a relatively integrated industrial base which includesautomobiles, machinery, chemicals, pharmaceutical products, paper, textiles, electronics, plating,food, etc. Industry remains the main influence on economic growth in the city. However, watershortages in the recent past have seriously impacted industry's ability to either mainain currentproduction levels on an annual basis, or to expand. In 1991, water rationing resulted in ratesof industrial productivity lower than would otherwise have occurred. With construction of majorrunk sewers and introduction of primary treatment of sewage, the project also will reduce

pollution in the rivers flowing through Changchun. Through the project, the two institutionsresponsible for water supply and sewerage, CWSC and CSC, will be strengthened in terms ofinstitutional structure, management, operations and mainnce, training programs and improvedfinancial viability.

B. IZAsr-COSr SOLUIMON

6.2 The selection of the water supply and transmission alternative, as well as theappropriate sewerage system for the city, have been subjected to rigorous least-cost analysis.A comprehensive study was made of alternative schemes for meeting the pattern of growingwater supply demand and determining the least-cost solution for treating Changchun's sewage.

6.3 An evaluation matrix of alternatives was constructed (five in water supply andfour in sewerage management) in order to account for the key factors that have an impact on thealternatives. The evaluations were rated against a number of parameters. For the water supplyalternatives these included: (a) sufficiency of supply; (b) low present value of cost;(c) environmental considerations; (d) system reliability; (e) system flexibility; (f) reduction inredundancy of existing works; and (g) minimization of jurisdictional conflicts. The parametersevaluated in the sewerage alternatives included: (a) low present value; (b) enronentatconsideradons; (c) sewage reuse; (d) system reliability; and (e) system flexibility.

6.4 On the basis of the analyses conducted and the evaluations outlined above, andfiurther confirmed by sensitivity tests, a least-cost Water Transmission Alternative and a least-costSewerage Management Alternative were recommended for implemention.

C. ftoJrcr BENEFm

6.5 Ihe proposed project would provide urgently needed water to the ChangchunMetropolitan Area, eliminating the requirement for significant water rationing for residences and

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idustries. It would also introduce the first opeational primary swage teatme fayciliy inChangehun and, under the technical assistance progrm financed by tXe project, would assist inthe development of a strategy to deal with tie city's resultant haardos and nusi waste.The project would improve the eironmenta quality of the area, the stadard of livig of thelocal poulton, and economic productivity of the major Industries. Furthermore, by reducingleakages, rehabilitating pipelines, and contucting water and sewage trtm facilties, it woulddecrease the potential healdi risk posed by possible sewage infiltration into the water supplysysten-

D. EcoNolc RAT OF RzuRN

6.6 The economic i nternal rates of retrn (EIRR) of the two main projectcomponents, water supply and sewage, were calculated separately. The combined BIRR for theproject Is emated at 13 petcen. For the water supply component, two main beneft werequafied. The first included imputed benefits of increment water supply for resdnt andinstitutiona uses. This is derived using retail water rates, to be introduced in January 1993(Y 0.41m' for domestic use and Y 0.8/m` for instittional and commercial use), as the proxy forthe benefits.. The second quantifiable benefit included value added estaes of industrialproductivity resulting from the intoduction of an increased water supply. This analyis wasbased on the review, "Industrial Production Shortfalls Due to Limited Avability of PpedWater (May 1992), prepared by the Changchun municipality government, which esmated anindusi production loss of Y 0.5 mIion annually since 1985. For purposes of the eonomicanalysis, It was assumed that the "value added" benefit would approximate 25 percent of theesimated industrial production losses per annum. It was furter assumes that the benefit wouldremain constant during the life of the project. The resltant EIBR for the water supplycomponent is 11 percent.

6.7 Even wihi the inclusion of the *value added" benefit, the rate of retununderestimates overall project impacts on the inhabitats of Changchun. The reason is tat, asnoted In pan. 6.5, the introduction of an adequate level of safe and reliable water supply wigreatly improve living sundards, specifically in terms of health and general welfare. Thesebenefits, although un tfle, are expected to be significanL

6.8 A similar analysis was conducted for the sewerage compo L In this case,incremental sewerage tariff revenue.was used as a prow for benfts (Y 0.511/n for domesdcand commercial use, and Y 0.5/in for industrW and instittional ue). Sewera demand wabased on the assumption that: (a) 20 percent of the water supply available for sale would be lost

rough leakage, etc.; (b) approximately 6 percent of the water supply would be used inteallyIn the facflities; and (c) the ratio of treated water to water sold is 0.8. The resultant BERR wascalculated to be 23 percent.

6.9 Severa sensitivity analyses were conducted on each of the _ . Theseincluded: (a) a 10 percet cost increase; (b) a 10 percent cost increase accompanied by a10 percet benefit decrease; (c) two-year project delay; and (d) exclusion of the ind -valueadded* benefit for the water supply component The resutant ElRRs are shown as follows:

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102 Cost ExclusionCost Inereasee Two-Year of Industry

Increase 102 Benefit Project Value-AddedComponent by 101 Decrease Delay Benefits

Water supply 10 9.51 10.51 1.5Sewerae 211 18.01 22.02 -

E. AVORDAUY

6.10 The present tariff ace stll considered low for both residetia and industrial use,being less than I percent of avage monthly family income for residences. bIcomes used forthese calculations represent only cash income and exclude subsidies in kind. The averagehousehold income is at presen about Y 376 per month. Ihe average consumption of 410 lcdfor a four-peon household costs Y 2.46. Including sewerage, the average cost would be Y 5.0,or 1.3 percent of total income, still much lower than the 5 percent considered affrdable forwater and sewerag services together.

F. ENVRONMENTAL TIWACr

6.11 An Enironme Impact As (EA) for the project was prepared byconsltants and reviewed by Bank staff and.by Changchun Municipality. CangchMuniipalt and NEPA approved the repon, while the Bank considered the EIA to be accepablewith only mnor improveme nteomended on anMgements for Involunty restementresuting from the project (pm. 3.29). A final ETA incorporating the IDDA's rmmedahas ben prepared. A summary of the E1A report is provided in Annex 1.

6.12 The environm l impact of the proposed project was evaluated with respect toeclogy, agiclue, and aesthetics. The restant impacts have been idetffied as thoeoccurg primaly during the consuion and post-constuction phases of the project, and areas hullows:

(a) the ecological impacts identified concemed the flora and fauna along the pipelinroute, pecifically the Yitong River and transfaation between the SecondSonghu River and the Shikoumen Reservoir. Vegetation along the pipelineroute, which is damaged by construction equipment, will be restored byreplantng grs and trees in the diurbed areas. On hillside slopes low bemwM be consdtcted at reglar intervals across the right-of-way to preventexcessive erosion. There would be minimal impact on anima life In the area;

(b) the potenl for introducing algae from the Second Songhua River int theShI en Reservoir Is considered to be minimal. However, there isminiml potenti for the Intoduction of parsites, such as protoeans,flatworms and roundworms to the ShitoukomReservoir fishery, becase theYin Ma Rier and the Second Songhua River are connected at the covfluence ofthese rvs some 40 miles down from the Shitoukoumen Reservoir. Also, fish

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stocks in the Reservoir ae not native and are, in fact, introduced fom stockingponds located below the dam Therefore, the possible Impact of parasiticintroduction is expected to be minor;

(c) the withdrawal of water from the Second Songhua River at Maja wil reduce tamount of water available in the River for dilution and assimilation of rawsewage *om the City of Jilin 16 km downstream of the Majaintake. isanticipated deterioration in local water quity in the Second Songhua River tothe confluence with the Yitong River would be addressed thrugh theintroduction of improved sewage treatment within the City of Jilin within thenear future. Jilin Municipality has the responsibilty to effectively manage itssewage disposal so as not to discharge raw sewage into the river and to exceedthe assimilative capacity of the Second Songhua River;

(d) only minor agricultural impacts along the water smission pipeline route andconstruction site location of the treatment and pumping plant, are expected toaffect 300 area farmers, who will be compensated (para. 3.29). Ihe posiiveimpact on Changchun because of increased availabilit of water supply andsewage treatment should far outweigh the negative impact on agricultmalproductio..; and

(e) the aesthetic impact is expected to be minor because construction will take placemosdy in the rural countryside and will be localized and tempormy.

6.13 lhe project involves tributaries to the Songhua River, which eventually flowsinto an international waterway. The Bank staff has made an asessmen that the ProJect wouldnot cause any appreciable harm to other riparians.

6.14 Similarly, a draft TOR for a Haardous Wastes Management and Industrial ParkStudy also has been prepared (Anne I1). Assurances were obtaied aOtchangdunMunicpalty wUl engage consuitams and conplete the study by December 31, 1995 and Udllbthen eplanfor industrild relocaton. This was iitiated to assist Changdn Municipaityto better prepare itself to address environmental issues associated with adisng and andcipatnew industies and their waste, many of which may be toxic and/or hazrdous matias. Thestudy would include analyses respecting the feasibility of designaing a partlr pordon of thepark as an industrial economic zone. Worker housng would be excluded from this area witha plan developed for relocation of the worker population into a separate housing development,free from industral pollution, but accessible to the dustrial par

G. PtojEcr RIMS

6.15 Project risks, not including general risks due to policy and economic reforms,are mostly in the execution of the water pollution control worhm and regulatory reform andenforcement. Over the last two yeas, the local authorities have developed a much betterunderstanding of the consequences of the present domestic and indusria pollution in Changchun.Ihe strong competition for investment funds for directly productive puoes and the reform ofindustries using outdated production tehnology may affect the priority to be given by theGovernment to finding follow-p pollution control enforcement and investment. Water resourceshortages affect the living conditions of almost everyone in the urban and mru areas of

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Changdhun and therefore also the economy of Jii Province. As a resUt there a strongcommkment by the ProvincW and the Muniipal govrments to support propriat measuresto iprove the siuation.

6.16 Reforms In priciag are required to ensure that the desired benefits are generated.As these changes affect a wide range and number of provincial and municipal governmentagencies, difficulty in implementaon may be expected. Finally, there is a risk that delays mayoccur in Implementation of the physical works of the project because Changchun Municipality,CWSC and CSC have never taken up an investment program of this scale in the past; thus theagreed emphasis on a strong PMO, backed up by eperienced consultants.

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7AGREEMENTS REACHED AND RECOMMENDATION

7.1 During negotiadions, assurances we obtand t:

(a) Changchun Municipality wfll maintain a PMO wih staffing and f-aacceptable to IDA (para. 3.14);

(b) Changchun Municipality will: Q) cause the PMO to submit quartedy progressrepots to IDA; and (h) cause CWSC and CSC to submit an annual summaryreport and semianual reports on main develop and cdgs In thecorporate plans (para. 3.16);

(c) Changchun Municipality, with the asstce of CWSC and CSC, will resetflethe persons affected by the project in a manner and according to a schedulewhich is satisfatory to IDA (pas. 3.18 and 3.29);

(d) Jilin Province and the Changchun Municipality will maintain and reulalyinspect the Xnlicheng and Shitukomen Resevoirs respectively (pm. 4.2);

(e) CWSC will adopt a new organizatio-, and rpobiliesby December 31, 1994(para. 4.6);

M CWSC and CSC will contract consultants by December 31, 1993 to assist inimproving the management and operations of CWSC and CSC, on terms andconditions satsfactory to IDA and cay out an agreed acion pla and timngsatisfactory to IDA (pa. 4.9);

(g) Annual audits of (a) project accunt, (b) the CWSC and the CSC acoounts,(c) the Special Account, and (d) the Statmns of Expenditue (SOEs) wil becarried out by auditors aceptable to IDA and completed and sent to IDA widnsix months of the end of each fisca year. h formats of the accout andaudis also will be subject to IDA's review and agreemenL A sepat opinionwill also be given on the audit of the project accounts, Special Account andSOEs (para. 4.11);

(h) CWSC wil be responsible for water supply and sewerage billing and colectionto all water uses (para. 4.14);

O Changchun Municipality will cause CWSC and CSC to implement, by December31, 1994, a program for computrzed planning, billng and foecasig, andprovide by December 1 of each year one copy of the forecsti projecti to

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IDA, and wil implement by Deember 31, 1994, a In_m atiosystem, with monly nomaon an watr demand, revues and coo t devery six monhs provide an updated copy of such projections to IDA (pas.4.14 and 5.4);

(j) Changehun Municipality will, by December 31, 1993, tansfer ownsip of anpublic sewer asset owned by Changchun to CSC (pma. 5.6);

(k) Cgchu MunicipaltY wl conf Its agreement to (i) gradually end all=ommeral and domestic exemption from sewerage fees, and complely end

the practice by the time the project is completed; and (1) levy a charge of Y 10per squre meter on new construction (par 5.8);

(I) Chaugchun Municipalty will cause both CWSC and CSC, to genrat suffcietrevenue to cover operation and maitnace cost, excluding ihrest, plusdepreciion or debt service, whichever is the higher. Changchun Municpatywill ensure a CWSC and CSC will retai al profits during the couctionand debt repayment periods (pm. 5.9); and

(M) Changchun Municipality will eae consultants to conduct a sudy of toxic andhazrdous waste mavagement and indusi relocation, to be completed byDecember 31, 1995 and thereafer will implement the plan for industrrelocadon (para 6.14).

7.2 The following are condtions of effeaieness:

(a) receipt by I'DA of signed Subsidiary Loan Agreemens between ChangchnMnicipality, and CWSC and CSC, satisfatory to IDA (para. 3.13);

(b) State Couni approv of the Development Credit Ageeum and the twoProJect Agreements (pm. 3.13); and

(c) receipt by IDA of signed ageements between CWSC and the Shi n(Changchun Mlunicipality) and Xinllcheng (Win Province) RvoirManagements regarding water a ailabillty, pricing and facilities mainten6y'ra. 4.3).

7.3 On the basis of the above agreements and aunces, the proposed projectcontes a suiable basis for an IDA Credit of SDR 86.6 million ($120 milion equivale) tothe People's Republk of China, on standard terms, with 35 years maurity.

-32- ANNEX I

EXISTING WATER SUPLY AN SEWERAGE SYSTEM

Water Supply

1. The water supply and distribution system of Changchun is managed by theChangchun Water Supply Company (CWSC), and owned by Changchun Municipality. Twoconventonal water treatment plants (WTP) supply water to the system (see IBRD Maps 24063and 24064). WTP 1 was built in 1934 under Japanese direction. Its raw water source is theYitong River, downstream of Xinlicheng Reservoir and upstream of the city. Approximately52 million m31year is supplied to WTP 1. WTP 1 has very basic systems of chemical dosingand control and a poor level of automation. It has a generally sprawling layout and is highlyinefficient. It Is unlikely that WTP 1. could be upgraded to the level of a modern treatmentplant. WTP 2, with a production capacity of 250,000 m3/day, was built in the early 1980s withJapanese grant aid. Raw water for WTP 2 is abstracted from Shitoukoumen Reservoir on theChalu River, approximately 40 km east of Changchun. The quality of treatment from this plantis generally good. Anmual withdrawal from the reservoir ranges between 40 and 80 million m3.

2. The distribution system in Changchun Is a tree-like branched system instead ofa preferred closed-loop system. The system consists of two major types of main.:

(a) Feeder mains (220 kn) of 300 mm to 1,000 mm diameter, which form thesketon of the distribution system. They are located along the major streets andcarry water from the treatment plants to the smaller distribution mains; and,

3. Smaller distron mains less than 300 mm diameter branch from the feedermains and supply water to the service connections of the residences and other buildings, and thefire hydrants. In the past, the usual pipe material was cast iron, with a small portion ofgalvanized iron pipe. Recently, plastic pipes have been used in the construction of new systemsor for the replacement of old mains.

4. Site inspections and pipe friction measurements have shown that much of theolder cast iron mains are in very poor condition. The main reason has been identified ascorrosion caused by the distribution of aggressive water and the inadequate corrosion protectionof cast iron feeder mains and distribution mains. This is a general problem in China.

S. In 1990, 365,000 domestic connections, serving 90 percent of the urbanpopulation direcdy, were recorded, of which 60 percent were metered. Apartment buildingshave one meter and individual households in the building are not metered. There were about6,000 commercial connections, of which 40 percent were metered and 2,500 industrialconnections, of which 73 percent were metered.

-33 - ANNEX 1

6. Distribution ,zcring began in the ealy 1980s. Ihe present locallymanufactured volumetric water meters are do no guarantee reliable long 4enr recording and thenumber of cases of defective meters requiring replacement is increasing. The reasons for thepoor performance are the poor quaity of the meters, which have a life expectancy of about 5years, and the high pardtle and chemical precipitation because of ditribution system corrosion.Improvements In the domestic metering is necessary but can only be made gradually with theimprovement of the water treatment and new constuction and maintenance of the distributionsystem.

7. Because of the above circumstances, It is impossible to determine exactly theunaccounted-for water and the system water losses in Changchun. Leak detection activity is lowdue to the lack of advanced detection equipment. Comparison with other cities having similarsystems and conditions suggests that many leaks remain undetected in Changchun andconsequendy substantial volumes of treated water are lost. A disincentive to complete meteringis that China's central govermnent has set guidelines that water losses should not be above10 percent and in grading the performance nationally of the Water Supply Companies the waterloss data figure prominently.

8. Most valves in the system are operated mamnly. There are no detailed recordsof valve operations, repairs or maintenace; however, the same observations can be made as forthe distribution metering. Site investigation has revealed that there are insufficient valves in thesystem to control and regulate flow.

9. A total of nine manually operated pumping stations provide water to thedistribution system. The dischare pressure is maintained in the 5 to 6 kglcm1 range. Thereare no pressure relief valves installed in any of the pumping stations to protect the systems fromwater hammer, which may be caused by valve closures.

10. All reservoirs are underground concrete structures. The total capacity is about66,000 in3, which is about 12 percent of the maximum daily water consumption measured in1989.

Existing Municipal Wastewater Handling System

11. General. The Wastewater Master Plan for Changchun points out significantproblems with the existing sewage collection system, including: (a) poor materials andconstruction; (b) inadequate maintenance of the system (attributed in part to maintenancebudgets); (c) poor construction quality and inadequate coordination of design and construction;(d) sewers under buildings, resulting in maintenance problems; and (e) cross-connections ofstorm sewers to sanitary sewers.

12. ifiltration, coupled with partiy or completely silted up sewers, conlribute tobacking up of the system and flooding. Ihere are also major surface water drainage problemscreated by uncontrolled constrauction within the natura drainage courses in the city. The limitedflow emes made in November 1990 suggest that flow velocities in some sewers maybe insuffient to provide scouring under normal flow conditions.

-34. -

13. Sewage Collecdon system. mm city s divided into nine dria distrctsdeveloped according to the topogrphy and natural dinage cnels. The sewer systemIcludes both combined and separate sewers. Separate sewers carry both sanry and industWwastewa, ad run parallel to stowrm sw where hose eist. In he older diticts, combinedsewer systems, cveying saitary, industia and m flows, are more common.

14. During the development of the sewer system over time, the combined or separatesewers in the various drainage areas were constructed to dicharge via te shortest rute into hievaious natul streams, rvers, ponds or drainage courses witi he ciy area. Because thesewage collection system has many separate raw wstewar dischargo points trougou the city,there are severe eviromental problems in these water bodies.

15. Sewers were first installed extensively in the older areas of the city such as theErdaohezi district on the east side during the 1930s. The existng sewer system consists of abou324 km of combined sewers, 243 km of storm sewers and 212 km of sntay sewers. All newerconstuction has used separate sewers.

16. la 1988, ainterceptor sewer was constucted in the bed of the main waterCourse, the Yhong River, from Yong Bridge to Dongda Bridge (3.2 km of 1,800 and2,200 mm diameter concrete pipe). Access manholes protrude above the river level. At presentthe interceptor ends at a temporary lift station just downstream of a rubber dam at the DongdaBridge. After constuction of the interceptor, the dam was constucted to create an impoundmentin the river for recreational use. Ihe intent is to eend the itecptor firiher north to theproposed North Suburbs Sewage Treatment Plant The first part of this extension is now underconstction. The intceptor now discharges into the river thmugh an opening upstream of thetemporary lift station, which is to be removed upon completion of the intceptor system. Ihetemporry lift station is activated when the river water level is too hgh to pemit gravy flowin the interceptor.

17. According to the Wastewater Master Plan, approximately 40 to 50 percen of thecity is serviced by sewers. About 60 to 70 percent of these are in poor condition due to lackof repair. Many sewers are partiaUy blocked by silt and other residue. Ihe remainingunsewered parts of the city are served by private or communal dry latrns. In 1987, there werestll 2,875 dry latries in the city according to the Urban Consrci Bureau. hese latrinesare gradually being demolished as new housing, with sanitary sewer connecdons, replaces oldrow housing.

18. Stormwater in most parts of Changchun is usually combined with sanitary sewersexcept in the Southwest, Auto Plant and Rail West districts where stormwater is collectedseaely. There are also open channels within the city to covey strmwater dranage intocreeks and rivers during the rainy season. Storm sewers and combined sewers do not finctionproperly in the city and flooding commonly occurs durng rainy periods.

Constuction Meriasb

19. Sewer Pipe. Older systems are largely plain concrete structures withoutreioforcing steel. After 1950, reinforced concrete was used for pipe sizes of 300-2,200 mmdimer and unrenfbrced concrete pipes for sewers smaller than 300 mm diameter. Smalldiamete vitrified clay tile pipe wih bel and spigotpjots is used for service connections. Joints

-3S - ANNElI

are filled with a cement/sn mortar. Poe aro castr pipo with bl and spigot join.Joint can be eiher rubber or jute gasket with cement mortar packing.

20. All joinls are tested accodn to the Chinese National Sandard, which requiresa joint to withstd a 4.0 m static head without leaking. Th intration for concrete sewers isestmated to be 40 m/km/day at a pressue of less ta 4 m of groundwater (Wastwater MastePlan). A higher stadard may be needed in certain locations such as the inteceptor installed inthe Yitog River bed.

21. Manholes. The shallow manholes on small diameter sewers are of ccular,brick constructon, tpering towards the top. The manholes in the older areas east of the YitongRiver show sigps of penetraton by tre roots. On the larger diameter sewers observed, east ofthe Yhtong River, the manholes are of vatZ type, brick constuction to a depth of 1.S tD1.8 m. The base is a square ooncrete slab on which the manhole barrel is constuced.Conetons for sewers or storm pipes are constucted integrally with the base slab. Theseconnections appeared to be pofirly constucted instaled on an 'random' or 'as needed' basis,poorly instled and subject to infltratton. In some of the newer areas precast concrete manholesare being used. On the interceptor sewer the manholes are made of 4 m diameter precastconcrete iins.

22. Sewer ntalaon Practics. Under the Chinese National Stadad, pipegrdients are based on a miniwmm velocity of 0.7 m/sec. For pipes less than 250 mm diameter,gasdes are generaly between 0.004 and 0.005 m/sec (0.4 to 0.5 percent). The maximum sewerdepth in normally 4 to 5 m.

23. Wastewater and Stormwater ift Stations. Lift stations are used to transferwatewater from points where sewers are too far below ground, usualy 5 m. They also preventbawkp from sewers durng flooding periods. Equipment instaled at lift stations includes coarsescreens and pumps but no metering devices. Spare pumps are provided, but there are noaltene drives for use in the event of power failure.

24. Existing sewers in the Erdaohezi district are too low to permit gravity flow intothe main interceptor at the Yitong River. The water surface in the impounment upstream ofthe rubber dam is higher than the wastewater level in the sewer. The Fufeng Lift Station in thearea does not handle the stormwater effectively during rainy seasons and flooding of that areais reported to be common.

25. Wastewater Treatment and Disposal. Ihere is currenty no municipalwastewater treatment plant. In the late 1960s, a primar treatment plant (East Suburbs WWTIP)was built in the northeast part of the city with the intention of using treated effluent forirrigation. In 1980, aions (by the Changchun Agriculture Department) were stopped andthe fact is in tota direpair.

26. Both domestic and process wastewaters from Auto Plant No. 1 and theChangchun Tractor Plant are being treated. The watwater treatment plant at Auto Plant No. 1was built in 1987 and put into operation in 1989. The plant has a capacity of 25,000 m/day andtreat both domestic and process wtewaters in separate process trains. The secondary effluentqualit is reported at 50 mg/L BODs. The total plant flow including process watewater isreportedto be about 10,000 m3/day, or about 40 percent of plant descapacity. Faces have

-36 - AN 1

been provided for tertrey a by chemical clarification and filtrt at a capacity of5,000 miday. This tertiary stream I use for llmied recycling and ruse In the cooling watesystem of the auto plat and park Irrigat.

27. MBn Budget. A rview of the municpal sewer maintance budgetIndicats t ooly Y 3 mIllion have been aUocated for maintenance each year since 1987. Tisbudget insufficien to cope wih the rapid development of the city.

Exsting Industrial Waste Handlng Systm

28. General. Industi wawater discharged to munici sewage systems andsurface wa is a major concern t the reuatory agencies In Changchun. The toxiccOnStitun found in these waters have an adverse effect on the receiving water environment,partiularly the Xi and Yitong Rivers, and pose a potenal health thrat to residens of thecity and to downstream users.

29. Major Idustries. There were more than 1,600 individual factories inChangchun in 1990. The major industries in Changehun are atmobile, machinerylocomotives, trucks) and reiated equipment manufacture. These three Industia sectors

constite more Ohan half of the industrial output of the city in terms of eoonomic retr Theindusti mix in the city in 1988 is shown in Table 1. There currently are no major oilrefineries, gas plant, petrochemical plants or pulp and paper mills in Changchun.

Tabb 1: INDUSriAL Mix IN CHANGCHUN (1988)

2 of Total

Machinery Is 55Food 10Chemical 8Textile 6Electrical 3Construction Materials 3Metallurgy 1Miscellaneous 15

hA Machiry category includes automobile, truck, and relatedeipment manfactre.

Source: China Northeast Municipal Design Institute, 1988 data.

30. Changchun's indtrial base is spread throughout the city with no clearly definedIndustra areas. The power plant, coa gas plant an food indutries are located on the northside of the ciy, whffie the electronics and istrument fcties are located on the south side;txile mill and the Auto Pla No. 1 are in the wesL However, machinery nd equipmentfactores scatered throughout the city and are not conined to any one particular sector.Becau of ftis, it is not faible to charactfize the wastewaer in a particular sector of the city

-37- ANNI! 1

based on the preominance of one industry type. Based on wa_war data from industry (1989and 1990) collected from Changehun Environmental Ptection Bureau (EPB) fRes, the totalIdustrial daily wastewater discge was es ted to be appro y 120,000 m&Iday, about53 pecent of the total wast_wat loading from the city.

31. Several fautories in Cbangchun currently appear to have adequate facies totreat wastater. A smmary of the types of wavwater treatment used wihin the industriespresent in Changchun is shown in Table 2. There are some Installations that appeared to reqifurther impwovement, more frequent monitoring, and improvement to the controls system. ingeneral existing industi waste treatment fcidites at several fctories were found to either benonprational or poorly operated. The many small facores, classified as millano,produce a large quantity of wastewater that is preseny discharged to the envionment withoutany pretreaten.

Table 1.3: EXISTING lNDUSTRIAL WASTEWATER TREATmE2 PItocr&ES

Industries Facilities Sludge disposal

Automobile Screen, oilskim. primary Incinerationclarif., aeration, sec- Bric Manufacturingond. clarifler, chlor.and filltr.

Chemical Reactors, dewatering Incineratioz

Coal Gas Phenols extraction, aera- Incinerationtion

Pharmaceutical Phenols extraction lacineration

Paper Dissolved Air Flotation(OAF)

Textile Screen, electrolysis, IncineratIonflotatlon, Enlsand filter

Plating ion exchange, chemical Return to equipm. uppli-precipitation, electroly- r. Concentr. waste sentsis to waste treaoent center

Electronics Ion exchange, chemical Concentrated waste sentprecipitation, neutral- 'to waste treatment centeriSation

Machinery/Equipm. Sedientation, DAF, fil- Incineration, Reproces-tration sing In lube plant

Food Aeration, sdimentation, oerae As cattle, fishfiltration feed

Power Sedimentation/filtration Brick manufacturing

Miscellaneous Chemical Pracipitation Reuse In pigent manfac-(tannery, padnt) turing, Incineratioa

32. According to e Changch EPB, the pdrma contaminan of concern in theseindusta waters are a ianitrogen, COD, formaldehyde and phenols. Ihe EPB considersthat the heavy metals, oil and grea, and cyanide are bing contolled adequaWy and

-38 - ANA1

concenratins are within the National guidelines. Based on the 1989 water quality data obtainedfrom the EPB fDr the Yitog River, this is not the case.

33. As wae treant proces Increase In umber and improve in efficiency inthoe &te, mor wast sludges wiU be produced. Currently, there is no coordinst programin pla to hanfdle, dispose or reus and redlaim _ sludges, although som effort isbeing made (see para. 36).

34. Praazt Dschage Lmits. Industal waswwaters from Changchun aredischged into receiving waters, by means of surace dranage canals or through pipes to rivers.Auto Plant No. 1, for example, discges its wastewater to the Xinkal River followingtreamen New, or expanded facilities are governed by a more stringent set of wastewaterdiage stndards which reflect National govement (State) requirements for improvedindustal waste teatment technology.

35. Status of Edsting Facilites. In spite of the setting of these discharg limits,the majority of industries in Changchun do not have wasw er tret facilities alftoughwastewater at major fcilities are trated to some degee. In some fatories, teatment cilitiesae present, but are not operating.

Industial Waste Sludge Disposal

36. IndustrIal Waste. Sludge disposal in Changchun is only practiced on a smallsae at prese.L 'he majority of industries in the city do not treat their w _awr sfficienlyto create sludges. Sludge recovery is restricted to operatis dealing with heavy metals, powerplant scrbber water, some oils, and some of the food industries. The sludges being producedare parally used as a fuel source, along with coal, In boiler fines or in brkick kins. Othersludges are removed for use by farmers as fertilizer or are dewatered, and dried to form filtercakes which are eifter reused directly or reprocessed to remove valuable materis, such ascomium and other heavy metals. Agricu reuse of sludges is decreasig because of thesuspicion that these materials may be contamiated wit heav metals and phenols, which maybecome incorporated into the food crops. The quantity of industial sludges genated inChanghu is esdimated at about 9 tomes per day (3,285 tomnes per year). Ihis figure wasderived by asuming that only 13 percent of the total produced industia wastewater is cretyteated, and 0.05 percent of this actually becomes sludge. Sludge disposa technology inChangcn is in its infancy, primarily because of a lack of sfficient waste treatment technoogyand faciities, and not because of a lack of willingness to address the problem. Ihere is awiingness to reycle as much as possible provided the economics are appropriate. As themixed patter of housing and industries is the major imedme to industia waste collectionand treatment, during project preparation an industia zone was creaed and a study is includedin the project to examine in detail the problem of industi waste treatment (para. 6.10).

Monltorim_ and Contol

37. Or atio. TheEPB is the goverment regulaory body which oversees theprotectio of the envwinment from inuia sources. Ihere are three levels of the EPB thatar responsible fo renvironmeItal protectio and discharge limits-State, Provincial andMunicipal orgntions. The Municipal, or Changeun EPB is responsible for monitoringIdsr dishar within the city. It has three opaional units to deal with disdcarges and

-39- ANNEX

emissioks to water nd air, nd nois leves. Teo EPB requires indur to monito discagerates and the concentations of pollutats in the effluent a all exist faiities. t checks forcompliance by sampling once or twice per ye. If a particular indusr has a raed ofviolation of the discharge sanr, the EPB wfll increase its level of survaillane monitoing.At all large factorles an EPB office is maitained on site. The mandate of ths site offlce is tosupervise all matters related to the environment and pollution control.

38. It is reported in the Changchun Wastewater Master Plan (1990) that theimpI on of end _ental rgets set by the EPB in the most recent Five-Year plan(1985-90) has resulted in a sgnificaut reduction in disage volumes from industries asmeared by priority pollutant streogth. However, these reductions have not resulted in asignificant improvement in receiving water quaity based on 1989 field data.

39. As part of the Five-Year Plan currnty in effect, each industry was allocated atarget for water reuse (up to 20 percent in the case of Auto Plant No. 1). During thedevelopment of water demand projections, it was seen that these targets have nt been met, oreven approaced. In fiact, at some factories reuse is restricted to the recycling of cooling watersonly. Curryty a program is being conducted by the Water Consvation Office of Chagchnto promote the isllation of cooling towers in factories and to substitute air coolers for coolingwater systems as measures to reduce industral water consumption in the future.

40. All new industries and expansions to existing industrW facilities requireparticipation of the Changchun EPB in the design, construction and operation of in platpollution abatmnt tenologies including wastewater treatment and sludge disposal. Thipolicy, known as the 'hree Same Tune Policy,' was Introduced in the ealy 1980s to eNsuat industries were complying with current environmental guidelines and discharge limits. The

number Ibree' refers to the three levels of participation i.e., design, construction andopeation. The advantages of this policy are obvious if carried out, since it means that the EPBis involved in all facets of the pollution control programs built into all new or expandedfacilities. However, expansions and new facilities are often governed by economic demand, tothe exclusion of environmental protection. Given the low level of waste treatmea in Changchunat present it does not appear that the policy has been fully implemented.

41. Pealmty System. To facilitate the implementation ofpollution control objectives,a penalty system has been devised by the Changchun EPB to Aiscourage the disposal ofcontaminat to the sewage system. The money collected from penalties is alocated to a fnddesigned to subsidize the construction of pollution abatement facilities. Usualy a grace periodis allowed to those industries charged for noncompliance to allow them to either correct thesituation, or to constuct or modify their waste treatment facilities. The extent of the graceperiod depends on the exte of required modifications.

42. Loan and Tax 1cnves. Currendy, the Changehun EPB has avaiable a fundfor the Implementation of pollution abatement programs by industry. This fund is derived fromfines collected as a resut of Industry exceeding waste discharge limits. Eighty pernt of thetotal of collected fines are rearned to this fund. Individual factories can apply for a losa fromthis. fund if predetermined conditions are met. The loans, repayable over three years, areprioritized on the basis that factories have: (a) a deadline for the implementtion of pollutioncontrols; (b) operao that impact the environment of the nearby neighborhood; and (c)obaned up to 60 percn of the required funig from other sources.

-40.- ANNE 2

WATER DEMAND AND SEWERAGE FORECASTS j

A. WATER DEMAND

1. Where water h abundant, the tem wter dmand and water consmpdon haveoften been used interchgeably since spply is able to meet demand. However, a dstintonmust be made between the tems in instaces, such as Changchun, whee water is limited andthe avaiable supply is unable to meet the demand.

Projeted Consumption

2. Water supply will constrai consumption dtrough the period of the presentproject and beyond. Consequently the trend of water consumption will be decided primarily bythe avale treatmen car et of the eist and new water transmission and treatmentfcilities. The difference ' tween demand and the available supply will determine the rate atwhich consumption reaches maxdmum available supply capacity. When supply and demand areof comparable magnitude consumption wJll be slow to reac maximum supply capacity, but whendemand is much greter than supply, maxmum supply capaiy will be consumed rapidly.Consumption may then be predicted with a fair degree of accuracy based on the water availableunder the project.

Demand

3. Esimation and projection of demand in areas experiencing water shortage arecomplex ts. The major difficulty arises from the lack of historical data on which estimtmay be based. In water-rich areas this problem is not so acute since present consumption givesa solid indication of demand and many North American municipalties model future demand ona direct mathematical projection of historical con Ion. Tbis approach is invid whereconsumption is strongly restricted.

4. As an altenative, demand can be compared to other mnicipalities, at theirpresent or previous states of development. A paralel projection may then be prepared. Ofcourse, the concept of parallel projection wil be tenuous at best sinLce no two areas will besubject to the same economic or physical influences and will not likely respond in a similarmanner.

11 The following analysis of water and wastwater demands are a summary of forecasts madeby UMA Engineerng, Ltd., of Calgary, Canada.

-41- ANNEX2

5. Under these circumstances, demand estmates and projection must rely stronglyon the judgment of the team making them, on the prevous experience available and on whatappears reasonable. The experience of local officials must also be strongly relied upon. Thisessentily describes the siaon in Changehun which has been water starved for most of itsrecent history. Estimates and projections were therefore made on the basis of previous outsideexperience with consideration to the advice available from local technical staff.

6. Projected demand holds more relevance the closer it is to the base year, sincethe formulating assumptions will be modified less. As projection moves farther into the futurethe defining conditions may change due to unpredictable influences and the accuracy of theforecast is less assured. For example, the prospect of supply limitations may force the adoptionof more water efficient industrial practices. Also, as demand approaches saturation level thegrowth rate will diminish. At this stage, however, the influence of these factors cannot bepredicted. For this reason constant growth rates have been used for the demand components.

7. In keeping with the classification system under which the Changchun WaterCompany maintains its records, demand was estimated for residential, institutional, commercialand industrial categories. The individual estimates were te totaled to give overall presentdemand.

8. Since 1989 was the last year for which complete data were available, in termsof production and consumption categorization, this was used as the base year for projection.

Distribution System Losses

9. Accurate analysis of water leakage in older distribution systems is often difficult.Infuences such as nonsealing valves, unmetered connections, and uncertinty as to the totalnumber of connections may reduce the accuracy of loss surveys. Historically these factors havefrustrated efforts to quantify losses from the Changchun distribution system. In an effort toestimate losses international consultants compared production and consumption volumes reportedby the Changchun Water Company.

10. The results of the comparison are provided in Table 1, which showsunaccounted-for water data ranging from 3 percent to 12 percent. When the age and generalstate of repair of the distribution system components are taken into account, it is felt that thisrange of losses are unreasonably low. In the United States, where resources for distributionsystem maintenance and construction are more readiy availle, system losses for cities with inexcess of one million population average about 17 percent.2/ Even allowing for the relativelylow system pressure and the impervious soil found in Changchun, it is esdmated that losses inthe Changchun system are in the order of 20 percent.

2/ The Water Encyclopedia, 2nd. Ed. F. van der Leeden, F. Troise, D.K. Todd, LewisPublishers Inc. (1990).

-42 - ANNBXZ

Table 1: WA1ZR PRODUCtON VERSUS CONsuNFO

Year Total Lose 6s Reported Unmccounted- Z of distrib-Water Intake In-Plant Consump- for water uted water('000 u'Id) Use tlon ('000 tuld) unaccounted for

1981 236.59 222.39 216.00 6*39 2.91982 249.51 234.54 224.80 9.74 4.21983 254.02 238.78 226.90 11.88 S.01984 289.83 272.44 245.40 27.04 9.9198S 314.88 295.99 261.80 34.19 11.61986 319.53 300.36 272.20 28.16 9.41987 329.23 309.48 28S.40 24.08 7.81988 373.35 350.95 331.70 19.25 5.51989 425.07 399.57 380.60 18.97 4.7

Average 7.6

Source: Changchun Water Company.

11. Figure I and Table 2 show the historical values for water use in ChanghbmL

Residentl

12. Residentia consumtin, as reported by he Changchu Water Company for theyeamn 1981 to 1990, is likely to be ovrsted sie they are based on a system loss ofapproxImately ll perent If tue loss exceed the estimated value and if meter readings aregeneraely comcl then the lost volume is included in the allowance for unmred consmtdoSince the biggest unmetered volume falLs in the rednal category most of the loss will beincluded in this estimate.

13. Geneeally residenti consompdon has ineased as soon s more wat becameavailable. This may be seen between 1984 to 1990. Dung is period two phases of WaterTreamen Pan 2 (TIP 2) came into produci I addition , wih ving levels of service,many residental uses of water which had previously occured in the workplace (such as batg,cooking, etc.) began to take place in the home.

14. Residental consumption was invesgated wihin vaious service categodries.Demand estmates were then made on the basis of how consumption would most likely incteasewithi the categories, if more water were avallable.

15. Average day residential consumption records for 1989, divided into servicecategories, are dso in Table 3. These figures were provided by the Changdmn WaterCompany and are based on records of metered consumption. The percentage of consumerswithi tee categories is shown in Table 4. These figures were also provided by the CbangcnWater Company.

Changchun Water SupplyHistorical Consumpton

160 _…- 160

140 r -140 Legende- 120- L __ _ __-_ nL_ lsuional

120- -- 120 -4Cmecax Commea. /_dC

t 1X X 00 100 A Industa-SC -' ConstMx:ion

0~~~~~~~~~~~~8

§40 _31t_ _ -40t20- <___ ; -200

1982 1984 1986 1988 19901981 1983 1985 1987 1989Year

Figure 1 Historical WaterConsumption In IChangchun (1981 - 1990)

Table 2 Historical Average Day Consumption (x 1,000 m3 /d)

Residential Total 28.8 28.7 28.3 29.4 61.3 7S.0 82.7 103.0 124.3 145.6Metered 12.6 12.4 12.5 15.1 35.6 50.7 53.1 62.7 72.9 90.6Unmetered 16.2 16.3 15.8 14.3 25.7 24.3 29.6 40.3 SI.4 5S.0Institutional Total 78.3 86.0 88.S 96.2 72.3 69.3 76.1 81.3 9.2 100.3Metered 64.4 73.4 76.9 83.2 65.9 64.0 66.8 74.0 87.7 93.1Unnetered 13.9 12.6 11.6 13.0 6.4 5.3 9.3 7.3 7.5 7.2Connercial Toal 6.9 7.5 7.2 9.0 12.2 11.1 10.7 12.9 14.8 17.1Metered 3.8 S. 1 6.0 7.5 9.0 8.8 8.4 9A 1O.5 13.1Unmetered 3.1 2.4 1.2 1.5 3.2 2.3 2.3 3.5 4.3 4.0Indusrial TotaI 100.2 100.9 101.8 109.7 114.7 116.S 113.2 126.6 136.S 140.7Metered 84.6 89.4 91.8 98.8 10S.5 108.2 106.7 111.0 130.6 133.9Unmetered 15.6 11.5 10.0 10.9 9.2 8.3 6.5 9.6 5.9 6.8Construction Total 1.8 1.7 1.1 1.1 2.3 0.3 2.7 7.9 9.8 12.2Metered 0 0 0 0 0.5 0.2 0.2 0.9 0.7 0.2Unmetered 1.8 1.7 1.1 1.1 1.8 0.1 2.5 7.0 9.1 11.9

TOTAL 216.0 224.8 226.9 245.4 262.8 272.2 285.4 331.7 380.6 41S.9Population Served 1,079 1,123 1,154 1,189 1,252 1,409 1,415 1,502 1,551 1,586(thousands) _

- -~ ~ ~ ~ ~~n -wc - l5iELijaui wale

-45- ANNEX 2

Tabb 3: R WATER COMUMPON BY SERVI CATEGORY (1989)

Average DayNo. Service Category Consumption

(Licd)

1. No water supply or sewer plumbing. Water fromstandpips 47

2. Water supply, no sewer plumbing 523. Water supply, sewer plumbing, no shower 784. Water supplys sewer plumbing, shover 1195. Water supply, sewer plumbing, shover and central

hot water supply 205

Source: Cbangchun Water Company.

Table 4: YEARLY PERCENTAGE OF DWELING CATEGORY SERVED

1984 1985 1986 1987 1988 1989

service Factor (X ofDwellings served) 77 78 85 84 88 89

Dwellina Categorv.Z BreakdounWater supply, no sewer

plumbing 39 37 34 32 31 30Water supply, sewer

plumbing, no shover 18 18 18 18 16 15Water supply, sewer

plumbing, shover 33 35 35 36 38 40Water supply, sewer

plumbing, shower andcentral hot watersupply 10 10 13 14 15 15

Total 100 100 100 100 iO 100

Source: Changcn Water Compy.

16. If sufficient water were available to meet demand, the per capita consumptionwihin the categories shown In Table 3 would incease as determined by the potential for wateruse within each category. Since water supply will soon be virtually universal within the city,Category 1 is unlikely to remain in exstence. Within Category 2 (water supply, no sewer)

-46- s

residen tend to be small apartmet and while oumpion wodd be expected to i e thiswould be limited by th physical space availablo waterug appliances, bahubs, etc.

17. For Cate 3 (water supply, sewer) preset demand wi1 also eceed prestonsuon. Since the potential for water use i greater In this categoy the dispaity betwee

cosumptn and demand will be greater. 'he greaest d be n cumptin anddemand is found in Cagory 4 (water supply, sewer, show). Consption in withese facilities is generaly limited only by supply; ther is eough spa avlable for water-using appliances. Within Category S (water supply, sewer, shower, centr bot water sfpply)most residences are In the vicinity of the Auto Plant and are In an area of good wate preuand supply. For this category it is unlikely at demand will be much gr than supply.

18. Based on ftis logic and on discusions with ofcs frm the North EastMunicipal Del: Institue and the Changchum Waer Company, and drwing on westerexperience, the prcentage differen beween prese consmption and preset demand, for eachservice category, was estmated as shown in Table 5.

Table 5: CATEGORY PER CAPiTA DzMAq ESflATE

Ratio of estimated Demand estiateService category demand to consumption (L/cld)

1. 0 0.2. 1.15 603. 1.20 944. 1.25 1495. 1*10 226

19. These per capita demand estim were multiplied by popuation percentageswithin each category, as supplied for 1989 (Table 4). For demand est_imon, completepopuaton service was assumed.

20. Residential watr consumption has icreased rapidly as more water becameavaiable over the past six years. The expected poput increase (1.5 percent per annum)combined with improved accommodaton and a more widerad availability of water-usingappliances wil increas the residen demand during this perid. The standard of livig afd

on improvement are estimated to cause demand to inre at ately4 percent per anim. The reidentia demand projectiom in Table 1 assume a 4 percen percapita increase combined with a 1.5 percent population increase.

Institutional

21. Instittional consumption is not projected to greay exceed presfet consmption.Ihis ir based on examination of the gen trend of con on over the last tea years. Dudrgthis period conmption remained relatively coStant, even when grater quantites of waterbecme availe through supply and teatment expansions. Sin lutltuna consmption often

-47- AbM 2

coain a resdential clemen origiat from on-site living ac ation (apartm , etc.),which is conected to a common suWly conneon, a lO prcent differeal between presedemand and cosmto wa estimated.

22. It is considered likely a exstng ident use of Institutional water will becurtailed in response to the higher tauf applied to insonal conumption. in recogition ofthese faors the rate of institbuonal demand icrease was estiated at 2 perce nstitonademand projecdon is also shown in Table 2.

Jn1ustl

23. Industrial consumption increased by approximely 50 percent to 141,000 mnYd,between 1981 and 1990. lbis was due to increased industrial producton and expansion overthis period. Significant ompdon Icreases fbllowed the expansion Of pla capacity atWTP 2 althoug, as would be epected, the time taken by industry to respond to greater wateravailabiity was longer hn that shown for residential increase.

24. Of all the categories analyzed the data available for this category is the mastrliable. Apoxim y 96 percen of industW consumption is metered and additional demandis based on requests, recorded by the Changchun Water Company, for more water. In 1989 thetotal average day industri consumpdon was 137,000 m3Id. Additonal idendfied industriademand is sbown in Table 6.

Table 6: ADDmOAL INDuMRA DEMAD iN CHNGCHN

Industry Water Volume Requested(m31d)

Coal mine 10,000Central Heating and Power Plant 60,000No. 1 Auto Plant 40,000No. 2 Gasification Plant 20,000100 miseellaneous factories 36,000

Total 166.000

Source: Changehun Water Company.

25. Changckun has become one of the major mufig centers of China,parculay for the ao bile, truck and rail industies. Other lighter industies have becomefirmly established and are likly to expand operation as more water becomes available. Eventhough watr availability will always limit industril expansion within the city the establishedindusti base is too strong tD make drastc reduction in demand possible, ather than byinceased use efficiency. The ccrasultants esimated that industrial water demand wil increaseat approximaely 4 percent per ann Inheret in this estimate is the assumption of moreefficient water use and rause as industry modenie.

-48- EX2

CommercdaUConstruction

26. Both commercial and construction consumptions are small relative to the othercomponents and have remained reasonably constant over the record period. Both are consideredunlikely to change within the near fiture.

27. Commercial consumption has remained constant over the last ten years and isnot considered likely to increase appreciably in the future. Since the volume of water consumedwithin this category is small the demand and consumption will not have a noticeable impact onsupply. Therefore, demand and consumption ae considered the sanwe. A 1 percent annualincrease was considered the aimum which would occur.

28. The above is summarized in Table 7, Water Demand Projection and in Figure 2,Supply and Projected Conumption to 1999.

Implications of Projected Demand (1991-2000)

29. The most immediate implication of water demand as calculated for Changchunis that it will not be satisfied by the implementation of the present water transmission project.

30. Because the city has been undersupplied for so much of its recent history, waterdemand now greatly exceeds supply, with the result that expansion of supply to meet thisdemand completely, within the near future, would be extremely costly.

31. It is critical that the present supply scheme be completed as soon as possiblesince it will reduce the discrepancy between supply and demand and will be the initial steptowards releasing the present bounds placed on industry.

lmplications of Projected Demand (2000-2020)

32. If demand continues to grow at the present rate it wil be almost impossible tomeet it. The present demand structure must therefore be changed. This requires that existingand future industries be made -ore water efficient. By adopting more water conservativetechnology, industries wiUl be able to maintain or increase production while using less water,i.e., reduce demand. In addition, more recycle and even reuse of water should be promoted.

B. WASTEWATER DEMNDS

33. According to the Wastewater Master Plan, approximately 40 to 50 percent of thecity is serviced by sewers. The remaining parts of the city not sewered are served by communaldry latrines.

34. Although there is a steadily increasing number of households having shower andhot water facilities, there is a decline in the percentage of households with sewer connections.This may indicate that the sewerage utility is not able to cope with the demand for newconnections as the population increases.

Table 7 Water Demand Pmjection

I~~~~~ ~ ~ ~~~~~~~~~~~ . _ PO

w1:t t!n'l ,iS1t 'tt:SS'B1w d io n (thound) 1__1 1_73 1,762 1,788 1.81S 13.82 1.870 .9 1,2 3I,95 3,198S 14 2,07S 7J06 Z138 2,370 2.0 237 2.556 2,754

Polslon Inrease(%) = .5 1.5 1.5 1. 1.s I 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1'5 1.5 3.5 1.5 I-S| .5 15AVERAGE DAY DEMAND I I I IResletial Demd (z 1,000m03Ad) 218 230 243 256 273 286 302 318 336 355 374 395 417 441 465 49 S18 679 890 ,167

resential demand groth rte (%) 4.0 4D0 4.0 4.0 4A 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4A 4.0 4.0 4.0 4. 4.0 40histiiona Demand (z 1,000 mn3 id) I= S 107 109 ll 114 33 118 121 123 125 128 131 133 136 139 141 144 IS9 176 194

insluta growth rate (%) - 20 2 .0 2 .0 2.0 2 .0 2.0 2 .0 2.0 2 .0 0 2.0 2.0 2.0 2 2.0 2.0 2 .0 2 21CAmme Demaud (x 1,OO m 3/d) i5 15 is IS 16 16 16 16 16 16 17 17 17 17 17 37 18 38 19 20

_omer deaudc po4 h raate(%) 3.0 3.0 3.0 I* 1.0 3.0 1.0 3.0 3.0 1.0 1.0 3.0 l I 1 .0 1 .0 - .0 1.0- I* A *IoNdaasustemaud ( .OO om3 d) 303 315 328 341 354 369 383 399 415 431 449 466 4as 50S 525 546 568 650 840 2

industriW owth rate (%) 4.0 4.0 4D 4. 4n 4.0 4. 4. 0 4 .0 4* 4 4.0 4.0 4* 4D 4D 4* 4D 4.0 4*

- = === = = = ===== = =======-

MisceUaneous (una0 16tedor) 160 67 174 181 189 197 205 213 223 232 242 252 263 274 286 29 312 387 481 60i% msseflanceasdemand 20 2020 2 20 20 20 20 2 0 2 0 20 20 20 20 20 2 0 20 20

WrllIn-plant demand (6%) _ S 535 58 60 63 68 71 74 77 8t 8 88 93 9 5 00 123 154 192

WTALAVUMIM4

3 - -..

WAT!M _ _ _ __U_

Note Matimum d to a dveragedaydem ratio is sued to be .1 for establsing future madmum day demand rates. his antio was daebFd fom bsal WSWr OnmPln rcordt

Changchun Water SupplySupply and Total Consumption to 1999

900 - __ _. _ -900Legend

800-__Is - Supply

2 700- W g _ -- 700 Consumption

x, 600W _/_0

E 4- _ - 4-00

300-- ----

200 - ---- 200

o 01991 1992 1993 1994 1995 199. 1997 1998_1999

Year FIure 2 Supply and ProjectedConsumpdon to 1999l , ~~~~~~~~~~~~~I

35. k 1987, ther oweroe y-S 750,00pecpe, abouthalf hpoplatlominte city eved by dry atrie accodn to th Urbangraully being demlished, nw constuction vplaces old row housing.

36. Stomwate in mt pas of Changchun I usually combid wit sanitary sewsexcept in te Souhwest, Auto Pla ad Rai West disticts whr sormwtr I coletdsepa ly. T are lo open chamels within he ciy to cne ormwate droag intcrks dn river during the rainy sao

37. Both domestic and process wastewas fm Auto Plmt No. 1 and ChangchunTactor Plat are beig reated. Th domesc watwae fow at the auto pla ad the tracwplant are approximately 4,000 r/Iday each.

38. Waswaerda fom Indusy for t 1989 and 1990perod wercoected fomhaungchun EPB files. Based on this data, tie total industria daRy wastewater discre w

estimated tbe aIproity 120,000 m'/day. This is Amaely 53 perc of ietowastewater loadig from the city.

39. Mm qantiy of ndustril sdges generated. in Chgcu is a mated at about9 tn per day (3,285 to per year). hi fi was dered by asming thatly 13 petrenof the totl produced dusal wastewater is curraldy treated, ad 0.05 perce of tis acYbecom sudge vaiusprocsuse by industytohndlethese l amounof dudgeae outlined below by industry sector.

40. As part of the Five-Year Pan cuntly in effct, each iutry was alsoallocaed a urget for war reuso (up to 20 perc in the case of Auto Pla No. 1). As shownby UMA in te deveopmet of watr demand projeon, hes rges bav not boee met, oreven adp ed. In fact, at some ce, reuse is rescted to the recyling of col wtesonly. Curreny a program is being conduced by the War Conerson Offlo of aagdmto promote ie iallin of coolig toweas in ficdes and to stitt air coolers for coolingwater sysm as measures to reduce industri water comptin in th fietre.

-52- NNEXB3

DESRIIPION OF COMPONENTS

go. Ceonst_ La sction Dsptacty I use ltlom

* MVVAllU

I ntebe suld Till City on taha etrestue and gzeStf d 0.475 Wl|d To abettat no Water Stea

CCOWUS FISM 0t te . 0.975 13 t 4 ee tap etat teteo of bee",cs.tanout epeed). a" meter1omen teeat r

a taemebe"nu S tmenl A reinforoed 4conrete stsuctuwe. 0.473 S tIE Dostft ug tag to inlat of

wt_11- _tonsr61 a bead. custoot tpad rtthsurg protectionM and oo

S keuths PS hsee). A # iOrCed aconcete Strctre. 0.95 * tiE Uooetin wt? to Chan Itwer* t f e1 S each11 0.4) o tiat

b~~~~~~~~~~~~~i. fi g nt *0et te} tge r

40m bead. ioitant see5 withaurse protection etnd v aw

4 eatan foe

I- Uslelas U.

a. ton preseure Vale =nteb t sage" concrete 1w pres- .12.lU t tuIf Cov= 4tr o VJ* t,t ae nth P ure conduit bsone nlta kt mS

tb.9S V tIe)

b. T l t aS.1 to * e ter I ienebenabl t 0.26 t t/4 tebeasbaVsi 40 c, St la V to a . 1.

(L~t.er.s (0.9 1 tI ello)0. Pipeline Pf*auo a UPree n ti 0t d Da S?."be1.4 4 S Cney w teQWron asuibs Pe

4 X lle. 1 ChaIn Liver eteel p10.a0t/d conrete M- 1.. 2.4 la te atile io seolected by tendegeg)sod 1* In acee. oad.

£ X_its~ I$ 2 dent- bitting Psaa to be 0.246 V tId S .o od to moiteritnet by 1dee t at

SOM eab 0. ~T. etact *on

s ~~~~~~~~~~eac 0.8 3, t *1., ro weer Dfrom Shi 14X^teubma*a

wt " lot (v) (it 1.

4 NDenU. *11 chag_. City oen Ztriujoi. eah03 0.000X tId S tranfrwtr to .

du!, a'Ie. SOn * constrnt 7 eaedlVIP t

mte

2 Zinwhiobe M N IolibNgO. Reinfored conrte trotugtu, 0.2*3 tIE .tk ao fo tglh

WaVter iens- Ch_Angh Cityl Preeme pipeline, ustar ate 01.100 16.6 be0 ZAitgliobe to .*51vd*141 94o1F sWteel ditil lOni Of Pne- 94 100.6.14 be3Is It

eomtged concretedb teelacted (tIn-- pielines)so

=tenpd tetsn e E

7 Uo*WP ~ ngbanCit Conanluorned treatent plnt 0.21 M tld To taupltrae wato 1iglerto"" a "d.consnt beet. mmtg 3 i. ewobwmp protect duel Umedato

a watw TC&Uo- chmeam no =nptreatment and chRlaome.aetoP.IIausim oloool 6.tio0

-S3- &WIL

U..~ ~ ~ .~.m ..ia _a.pta CaoSyIIi. 1aIlo. C40pm=t Lot. C. Dt

8200. 1.0e v"

DMO 5.0 t

a 500. 1:. Is825-75. n5 o

9 Zbangau 18 Chasuba Ci_ty 4 ta*rifgal pow. _b 0.2 sWe. 0.-00 a tId lontiallybee.ttq to we". d60 ahead with euqe pmntetio M r ole,au.and 11a _to

c I

T una ste:- ohnton City tagnad nomt pipe and DM 10 in To collast weee and _ dawe*ePMe 6omw culvez 81006 1.25 In to aba= gej 1 atmna -i

DUaGo. I.44 in an th abagMbo82100 1.52 la an the Iia Uves..20D", 1.0 Xt XS.4x2.b. S.7? In

2 V"atete: S-at. Chanlun city teatm plant M Sid nat etop of odew eni_It eat,,ien$* A N l Mm;) facility poua

at 110406 Sities yaai

8~~~ 0,

Coinniati.n ill. and Kiarowa, osttia1 e.&I - ~ Co *aS . cI.gM3 ten-lan SC" Chagbou i_ te d e

2 Pm: Supply Jun and SatJiinSa and paWe lbne a. a _asebta. To Sepy pin to sat atCbhoaug-o City h. tiass 4opOnas

145.4 km3 QuArtet. and Alto and 31.50 up

Offia Ch _gba City

4 N -ecellema Jun and te 1 -el" tog ," r y etw m

Pipe *'"un an e lp aa

qatpos - ad apatlin~Ient azias cabI eqimn

CHINACHANGCHUN WATER SUPPLY AND ENVIRONMENTAL PROJECT

Poct ImpmIo Schedule

__ , * *4 * am. Una * aM* tS

TMN 0001' *NAU* * S ASO* * MAUiS ASOSO IHAOS S *M MAMI# AS0301 -SAMIIASOA NAMISASOMB

in.Waaain a~~~~so 30 .A ....... ... its * .* * . *s~~~~ ~ ~~~ ae _

- a-* *.--- u-------c

so u A . . .

* .ptbI MS 3U * *.*-|**--* aC..t...aa..a.......a.a.OcM

* .* . afl * *..a.a.aa. .. ... . .a. . . .. ...* -- - **. * *..a.C..A. .. . ......... . . ..

* aa.~Te.S 3n Su** *. 8aS -- ..Ca ... ..... ... .... O--.. *

Is __ , WOT,§"Vo No .96 . .......... .

as *o* . a . .*.61 .a._ * . . . . .... a.... ..... CO"* -a3 - * -----PA*.a . . . . .. .. . ... O .

* uJ. so. o..a.a.....u..* ..--. *..-*-...,*0*--oM .*

in SU* * . . . . a

SW. ,^e,._ . . . . . .

_||_;|_SX ~* a a a a *

__ f|S, * * * . S * .gca* * w ' *I* * ""^*-^C^*------ -------- .a-...A.............................C.a.0C.- - . *l* _1- MS aa *.-*.a.a..*.... * .*.. *.--.. .C** .. a *avaab * * - a* a . .. a S @* . * , oS

_t m01 * *aa ... . .. aS .$ as *e MS Md..S. . .A..E c ...... a.*.O con *_ _ a1b 33 Sa"* -.-a. -.Sa---.-.-.a -- oo. .a.... *-.aa. .... COU

~uaWI~** . . *a0~~ ~ ~~ ~~~ a * . .

_,~ pm sa . .eU *aA .a ....... Sa.. S.a CM .t>@ * *1 *-***..tS Aaa *-C*---.-a------------aoC*** _ _ * * *aaaaA.aMa a..-...a..aC*fl--------------o .

" ~~~-WW t"~~* a * ||.*-¢ a ^ -*-* ao * . aingt * -- -g - - . - . az - a _-<_, lll.t ~* * . . . .

S-a

if3 .tga .C..eaa.aa.aaasa.O a . aaa.* *a.esa0..Oaa.taa..O

$-Wae*4*

ScIIEUI or CONmtAcr PAcUCAGUQse Cost)

CoOltect Prcurement Toe cost

I (a UwaiUi:t 1 B C 16.0 2.; 4.0 0.7 2000 3.?2 n~~q 4.cXIc 31.2 5.7 1254.8 22.8 156.0 2854 le lig44unnel 1.9 52.9 9.7

5 GIVU WoM ~ ~ ~ ~ ~ ~ ~ XIc 20.9 3.8 5.3 1.0 26.2 4.86 )Civil mied usI 20.9 SR9 5.3 1.0 26.2 4.07 (cPie C 7.1 1.3 28.0 5.1 35.1 6.4* (414 cI 7.1 1.3 28.0 S.1 55.1 6.4

9 mik W 6.7 1.6 2.1 0.4 10.6 2.010todu XIc 6.8 1.6 35.2 6.4 44.0 8.0

la1a GIkJiII1i XIc 31.3 5.7 7.6 1.4 39.1 7.112 lbi Pipe XCI 11.1 2.0 44.5 8.1 55.6 10.113 Water Treatmuit Plant. XIc 45.5 8.3 45.5 8.3 91.0 16.6

~~LjI~~~~gazm

S~~~t,m &,,ft Stain

14 (a)L XC 34.0 6.2 6.9 1.3 40.9 7.515 (b) tCS 3.6 0.7 14.4 2.6 IS.0 3.316 ViiPu,n Station LCn 1.0 0.2 4.2 0.8 5.2 0.917 vo tons pumpng tation XCI 0.6 0.1 2.2 0.4 2.8 0.5

18lat&pipn station XCI 34.7 6.3 23.0 4.2 57.7 10.519 a t a t tIc 57.7 10.5 57.7 10.5 152.4 21.1t0 Ve:.w. A 24.3 4.5 36.4 6.7 60.7 11.121 Icac i CI 0.0 0.0 25.2 4.6 25.2 4.622 t LCB 15.0 2.7 3.8 0.6 16.6 3.523 a equipment & vehicle *Ic 0.0 0.0 10.4 to9 10.6 1.0Total oStru t LC. 8T 1.6 2.1 U. VIA 2.0

PaOwr Cost TAUBI

Coutract £991 1994 £093~ ~~ ~~~~~~~~~ ~~~~~~~ 5 1"9 199 taluao: ~~~~~~~~~~~~~Local tlo. otlLocal for, Total Local foe. Fol.a Local Iog TotaIlLoal for. TtaM Local lor! Vo. Lcl o. oa

1la)a UntA* S lmsia Statics. 1uamobmana"lotin Statics. Daeedba "USn Stattics

I (a) Civil work 0.0 0.0 0.0 0.0 2.0 10.0 3.1 1.3 6.4 2.9 0.? 3.6 0.0 0.0 0.0 0.0 0.0 0.0 £4.0 4.0 20.0I (b) t.ip.at 0.0 0.0 0.0 11.3 S6.1 101.6 9.1 50.? 44. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 31.112. 114.0 u

2 Zen C1ohot 0.0 0.0 0.0 9.8 2.S 12.1 6.8 1.6 1.9 35S 0.0 4.4 0.0 0.0 0.0 0.0 0.0 0.0 £9.6 3.0 24.6

4 Laoaliag IM1ail £2.? 3.2 £3.9 £0.2 2.5 12.7 10.2 2.5 11.7 9.3 2.3 11.6 0.0 0.0 0.0 0.0 0.0 0.0 42.4 10.5 53.9

54.p*.l o OalS (a) Civil Vwork 3.1 0.8 3.9 6.3 1.6 ?.0 6.3 1.6 7.9 4.2 1.0 5.2 1.0 0.3 1.S 0.0 0.0 0.0 20. 5.3 26.24 (8) civil 10:1. 3.1 0.6 3.9 6.3 1.6 ?.9 6.3 1.6 7. 4.2 1.0 5.2 1.0 0.3 1.3 0.0 0.0 0.0 20.9 5.4 26.27 (a) lip 1.1 4.2 53. .1. 10.6 13.1 2.1 9.0 £1.2 £.1 4.2 3.3 0.0 0.0 0.0 0.0 0.0 0.0 7.1 28.0 15.2* (dl Ps" 1.1 4.2 3.S 2.7 £0.6 13.8 1.2 9.0 £1.2 1.1 4.2 5.3 0.0 0.0 0.0 0.0 0.0 0.0 7.1 28.0 15.1

PM"o Suppy 0.0 0.0 0.0 7.0 10.5 17.5 3.6 6.4 14.0 1.4 2.1 3.3 0.0 0.0 0.0 0.0 0.0 0.0 24.0 22.0 15.0CommlcotionaISVAM 0.0 0.0 0.0 0.0 5.3 5.S 0.0 3.2 3.2 0.0 1.6 1.6 0.0 0.1 0.5 0.0 0.0 0.0 0.0 10.6 10.6Woailoqlofice 0.4 0.1 0.5 0.9 0.2 1.1 0.4 0.t 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 0.4 2.1

vioacllomoou lqo4.oot 4 V.24.3. 0.0 0.3 0.3 0.0 0.4 0.6 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1Land Acquisiltos £6.6 0.0 £6.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 £6.6 0.0 I6.6Total lamo Coat 5.1I 15.6 51.7 73. 134.1 209.5 54.1 77.2 151.3 21.7 10.0 45.7 2.0 1.1 3.1 0.0 0.0 0.0 197.5 244.0 441.3lkyaicl Coat£ngoacy (152£ 3.? 2.0 7.7 11.J 20.1 31.4 $.I1£1.6 19.7 4.2 2.7 6.9 0.) 0.2 0.3 0.0 0.0 0.0 29.6 M6. "6.Total 3ame Coat * Pyiclt Contingency 43.6 15.6 59.4 66.? 154.2 240.0 62.4 MS. 151.1 31.0 20.7 52.6 2.3 1.3 3.6 0.0 0.0 0.0 221.1 200. 507.7Poc0uresut Cool 1t .1 3... Coata 0.4 0.2 0.6 0.9 1.3 3.4 0.6 0.9 1.5 0.1 0.1 0.5 0.0 0.0 0.0 0.0 0.0 0.0 2.2 2.0 5.0Wri ct. ooigoacy 3.6 0.4 4.3 10.4 7.1 17.7 9.6 5.9 15.5 6.0 1.5 7.8 0.5 0.3 0. 60.0 0.0 0.0 30.4 £3.6 4460

Total coat - Valor Tras"1iaaic 0t4. 16. 14.1 394 1163.0 3134 lid 95 165.1 58. It.1 6-0.9 3tej Li !a 94- 9.1 0.0 259.7 fl4 M3.?

Itat** "upngstaiSbtcaobu.moa lumping Static. lqlnc

lumping Station. Ziaglisbeng lutako)9 (a) Civil Mingl 1.3 0.3 1.6 2.6 0.6 1.2 1.5 0.9 4.4 1.3 0.1 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.7 2.1 10.8

10 (b) Sysipmat 1.S 5.3 6.6 5.3 21.1 26.4 0.0 1.8 4.4 1.1 5.3 6.6 0.0 0.0 0.0 0.0 0.0 0.0 0.8 13.2 44.0

c*ty suppl mainI£ I a) civil locke 0.0 0.0 0.0 14.1 3.3 17.6 14.1 3.3 17.6 3. 0.6 3.9 0.0 0.0 0.0 0.0 0.0 0.0 31.3 7.8 20.1I2 (8) lip 1.7 6.7 0.4 4.4 17.8 22.2 2.9 15.6 19.3 1.1 4.4 5.5 0.0 0.0 0.0 0.0 0.0 0.0 11.1 44.5 33.6

£3 later Treaatw lUst 3 9.1 9.1 10.2 15.9 13.0 31.0 15.9 13.9 31.8 4.6 4.6 9.3 0.0 0.0 0.0 0.0 0.0 0.0 43.3 45.5 81.0

King main 6 Olotr£lstio. Iaproveostot(lipelina. Ml? I lming status,.Diotribstios $rate. luspn Statical

14 (a) Civil laok 3.4 0.7 4.1 6.6 1.4 8.2 10.2 2.1 12.3 6.6 1.4 3.2 5.1 1.0 6.1 1.? 0.3 2.0 34.0 6.9 40.9is (b) Zquip.amt 0.7 2.9 3.6 1.1 4.3 3.4 1.1 4.2 3.4 0.7 1.9 3.6 0.0 0.0 0.0 0.0 0.0 0.0 3.6 14.4 10.i6 VIP I Pumping staticn 0.1 0.4 0.5 0.4 1.7 2.1 0.4 1.7 2.1 0.1 0.4 0.3 0.0 0.0 0.0 0.0 0.0 0.0 2.0 4.2 3.217 blatuibutics ?mpig Static. 0.1 0.2 0.3 0.2 0.9 1.1 0.2 0.9 1.1 0.1 0.2 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.6 3.3 2.8

oner Supit 0.0 0.0 0.0 4.7 7.0 11.7 .1. 2.6 9.1 0.9 1.4 2.1 0.0 0.0 0.0 0.0 0.0 0.0 9.S 14. 22.3

Ooinnicgatiosa 0.0 0.0 0.0 0.0 6.0 6.0 0.0 3.6 3.6 0.0 1.8 1.8 0.0 0.6 0.6 0.0 0.0 0.0 0.0 22.0 12.0

Dozaitoqyl0liice 2.5 0.6 3.1 3.6 1.4 7.0 2.4 0.6 3. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.3 2.6 13.1IWiecellanmacu tquLpmam & V.13*100 0.0 1.6 1.6 0.0 1.6 5.8 0.9 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.1 6.5

Contract 199 1994 995 MO9 1997 l99 Totaltawbar Local for. =totl Local fee. Total Local for. Total Local for. Tot;al Local for. total Local for. Totel Local for. Total

Lead Aoqutalttoo 22.0 0.0 22.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 22.8 0.0 22.6Total so"e Coat 43.0 27.6 70.6 61.1 85.4 146.S 56.3 59.I 315.4 20.0 23.5 43.5 54t 1.6 6.7 1.7 0.3 2.0 187.2 197.7 364.9"Y~etcal Coattagoeay (151) 6.5 4.2 W0.7 9.2 12.0 22.0 8.4 8.9 17.3 3.0 3.5 6.5 0.8 0.2 1.0 0.3 0.0 0.J 26.2 26.6 57.6

Total $sa. Coat + PSyoialcCoatlugeac? 49.5 5 11.5 70.3 98.2 168.5 64.7 68.0 132.7 23.0 27.0 50.0 5.9 1.0 7.7 2.0 0.3 2.3 215.4 227.3 442.7

ft.cagaaaat Coat It of Usaa Coat. 0.5 0.8 0.7 1.0 1.7 0.8 0.7 1.3 0.3 0.3 0.5 0.1 0.0 0.1 0.0 0.6 0.0 2.1 2.3 4.4Utica Coutlagancy 4.3 . 5.2 6.5 4.6 13.1 10.0 4.5 W4. 4.3 2.3 6.7 1.3 0.2 1.5 0.5 0.0 0.5 28.8 12.6 41.5

To-tal Cost - Urban Watw LSUPoly 54.3 07.5 79.5 103.S 183.3 75..3 73.2 148.5 ILL.. 29. 57.U2 L _3 2.0 I 34 2j S 3.0- MA6. 242.2 448.6

Togtal Water 102.3 49. 131. 177.5 266.8 444.3 147 9 M66U 316.7 65.8 52.3 ANI16.14 125 . 0. L 33$". 541.2 . 2

17 loterc.ptoz $e,er 0.0 0.0 0.0 10.4 6.9 17.3 10. 6.0 17.3 10.4 6.9 1.3 3. 1. 5.6 0.0 0.0 0.0 54.1 23.0 57.7

I6 Vetwaft"a Treatmeet Plant 0.0 0.0 0.0 17.3 17.3 34.6 17.3 17.3 34.6 I 17.3 873 4.6 5.6 5.8 81.6 0.0 0.0 0.0 57.7 57.7 115Atoast SuP9l 0.0 0.0 0.0 0.5 0.7 1.2 0.4 0.6 1.0 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 1.0 8.4 2.4COMIMUL*otIOa1863*4 0.0 0.0 0.0 0.0 1.3 1.3 0.0 0.6 0.0 0.0 0.4 0.4 0.0 0.1 0.1 0.0 0.0 0.0 0.0 2.6 2.6somit"1to~02191 0.7 0.2 0.0 1.3 0.4 1.9 0.6 0.2 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 0.0 3.6stacalleameae lpQeaat & VebLclee 0.0 0.6 0.8 0.0 1.9 1.0 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.8 3.2LeW ad£qaslttoa 14.7 0.0 14.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 24.7 0.0 84.7Total Bse" Coat 15.4 1.0 86.4 29.? 20.5 58.2 28.7 38.3 55.0 27.8 24.7 52.5 9.2 6.2 17.5 0.0 0.0 0.0 120.9 6".I 19"APbyleatl CoutIegeec1 (151) 2.3 0.2 2.5 4.5 C.3 6.6 4.S .9 8.2 4.2 3.7 7.9 1.4 1.2 2.6 0.0 0.0 0.0 16.7 13. 28.0Total so"e Coat + Vbyataal

OCatlaeac 17.7 1.2 16.9 24.2 32.6 67.0 33.0 30.2 63.2 32.0 28.4 60.4 30.7 0.4 20.1 0.0 0.0 0.0 127.4 102.0 229.6Proermauot coat 11.8t Ieee Costs 0.2 6.0 0.2 0.3 0.3 0.6 0.3 0.3 0.6 0.3 0.3 0.6 0.1 0.8 0.3 0.0 0.6 0.0 2.2 2.0 2.2PC"*c ootlageacp 1.3 0.0 1.6 4.1 1.5 5.7 5.1 2.0 7.1 6.0 2.5 6. 2.3 1.0 3.3 0.0 0.0 0.0 09. 7.2 26.1

Lot*l Veastaater 19.4 0i M St2 3 1Z..3 fl. 34.6 73. _34 325l.4 L ZL iL bLJ* L tL 0.0 LL 147.9 1L0.1 !LTeoatel eeateceand Tralasu

Detaile powip"4CMOOtmuctlsaa9twtioBm 8.2 5.5 15.7 8.2 5.5 13. 4.1 1.1 6.8 4.1 1.7 6.8 1.4 0.9 1.5 1.4 0.9 1.3 17.4 19.1 43.A

Vits6clal Uaosega.ao Leeleteae 0.0 0.1 0.1 0.0 0.2 0.1 0.0 0.1 0.2 0.0 0.8 0.1 0.0 0.1 0.2 40.0 0.0 0.0 0.0 07 0.7VWi..Ioa11tsi0peret. Sufpot to

0601000 0.0 0.0 0.0 0.1 1.5 1.6 0.1 1.3 1.4 0.1 1.3 1.4 0.0 0.8 0.0 0.0 0.3 0.2 0.3 5.2 5.5Toatalea"rd. West a luadut.

tarkt Ottd 0.0 0.0 0.0 0.3 1.9 2.2 0.3 1.9 2.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 3.0 4.4Training 0.1 0.3 ' .4 0.1 0.5 0.6 0.1 0.6 0.7 0.1 0.5 0.6 0.1 0.5 0.6 0.0 0.0 0.0 0.5 2.4 2.9Total ftee Coat 8J 5.9 14.2 8.7 9.6 18.3 4.6 4.7 11.3 4.3 4.6 6.0 1.5 2.3 3.9 1.4 1.2 2.6 28.0 W0. 59.1Ibyaloal Ccaciageac (802) 0.8 0.6 1.4 0.9 1.40 1.9 0.5 0.7 1.2 0.4 0.5 0.9 0.2 0.2 0.6 0.3 0.3 0.2 2.9 3.1 6.0Total Base Cost . ibjelca

Cootiagaopq 9.1 6.5 15.4 9.6 10.6 20.2 5.1 7.4 12.5 4.7 5.1 .6. 1.7 2.5 4.2 3.5 1.3 2.6 31.7 33.4 65.8Pro"cresant Coa t 13of 3ae Coat 0.1 0.1 0.2 0.1 0.1 0.2 0.1 0.1 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.4 0.7Price Courluepacy 0.8 0.2 1.0 1.2 0.5 1.7 0.6 0.5 1.3 0.9 0.4 1.3 0.4 0.3 0.6 0.4 0.2 0.5 4.5 2.1 6.4

Totatl Tacbaicel &aatataaelTretaiat 1MAL 44 16.8 10.9 11.2 22_.1 6. 8.0 J14 bi5 L 6 11.2 LI 3, ~j. jUj a. 3j SS. 133

Total Coat 131.8 57.4 189 2 227.0 312.6 539.6 192.3 209.4 401.6 1097 69.1 98.6 naJ 25I 3 1 4.34 3 1 O"36902 687.1 1-277.4

Puoona COST TAhUB

.30., Local POt, t~~~~~~otal Local for. Voaal Lole" .toa L..l ot total UK"l t,toa Loca"l low.T tal ocl .Toa

I Ca) ciii Woika 0.0 0.0 0.0 b.5 *.4 81.0 0.0 0.2 1.2 0.5 0.1 0.? 0.0 0.0 0.0 0.0 0.0 0.0 2.9 0.? 5.?I Sb) RSpiusa 0.0 0.0 0.0 5.3 IS)1 84 1. 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 S-? 22.0 20.5

5Sm us Iwoit 0.0 0.0 0.0 1.0 0.5 2.5 1.5 0.A 1.0 0,0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.4 0.0 0.5

4 1.aop.lit TWO"l 2.8 0.4 2.0 1.9 @5S 2. 1.J 0.5 2.2 1.1 0.4 2.1 0.0 0.0 0.0 0.0 0.0 0.0 7.? 8.0 0.

Ppeihe to 60.1*.S (a Civilw NatO 0.4 0.2 0.1 1.2 0.3 1.4 1.2 0.5 1.4 0.8 0.2 1.0 0. 0.1 0.2 0.0 0.0 0.0 54 2.0 4.00 (0) CIVil Ustk 0.4 0.5 017 1.2 0.5 1.4 1. 0.2 1.4 0.0 0.2 1.0 0.2 0.1 0.2 0.0 0.0 0.0 8. 1.0 4.0I (el fpi" 0.2 0.0 1.0 0.5 8.0 2.4 0.4 1.0 2.0 0.2 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 5.1 4.0* Sd) ftp. 0.2 0.0 1.0 0.5 1.9 2.4 0.4 1.4 3.0 0.2 0.6 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 5.1 .4.

Pow. suppI 0.0 0.0 0.0 1.3 1.9 5.2 1.0 1.5 2.4 0)3 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 2.0 8.A 4.4CUMAieatio.aIntOM 0.0 0.0 0.0 0.0 8.0 2.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.2 0.0 0.0 0.0 0.0 2.5 1.900031017150i0 0.1 0.0 0.1 0.2 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.4Hiscalluo"s Spip.mt 0 *ae 0.0 0.1 0.2 0.0 0.1 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2Land AepIaitcs 5.0 0.0 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 0.0 3.0Ttotalso" Coat 7.0 24S 0.5 85.0 20.5 30.2 9. 14.2 24.0 2.8 8.5 0.4 0,4 0. 0.4 0.0 0.0 0.0 3.0 40.S 00."rqol"eai Costipo 1852) 1.0 0.4 1.4 2.1 S.? S.? 1,5 2.1 3.6 0.6 0.5 2.5 0.1 0.0 0.1 0.0 0.0 0.0 5.0 4.1 2U.2Total Sea" coot 9 """a Ccmttlawi 0.0 2.0 10.0 1I.0 20.1 44.0 11.4 14.2 21.4 5.0 38. 9.6 0.4 0. 0.4 0.0 0.0 0.0 41.0 51. 02.Afteacrommot coot Is of soa" costs 0.1 0.0 0.1 0,2 0J40.0 0.1 0.2 0.5 0.8 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.5 0.0fig Coo .. isg.aov 0.? 0.1 0.0 1.0 1.5 9.2 1.0 1.8 2.0 2.8 0.2 1.4 0.1 0.0 0.1 0.0 0.0 004 5.4 2.0 0.4

Total Cost- at ?taamteel IA IA Md IL! ELa HA I HALZ I IL . RA 9 A 2 g9 %4 DAIA-

late" P tatin . ilo.g11.

* to) CVil Voeda 0.2 0.1 0.5 0. 0.A 0.A 0.4 0.2 0.0 0.2 0.1 0.5 0.0 0.0 0.0 0.0 0.0 0.0 1.4 0.4 2.010 (b) S"pipset 0.2 ,1.0 1.4 1.0 1.0 0.0 0.2 0.0 0.0 0.2 8.0 1.2 0.0 0.0 0.0 0.0 0.0 0.0 3.0 94. 0.0

swLE usla gia)05huo 0.0 0.0 0.0 2.4 0.4 5.2 2.4 0.4 5.2 0.4 0.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 5.1 1.0 1.112 Sb) ftp 0.5 1.8 2.S 0.0 1.5 0.1 0.7 2.0 5.4 0.2 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 0.1 10.2

Is Wateg Treece"m lnt" 8 1.7 1.1 5.2 2.0 2.9 5.0 2. 2.0 5. 0.0 0.0 1.4 0.0 0.0 0.0 0.0 0.0 0.0 CS5 0.8 1U.

Ri%g31 OklaA t,ibuti.s tuptoammotaSpiolin.a VW? I lumpin Stacs,oDl.tab" stlc.Spte Psping Sttics)

10 (a) Civi lodk. 0.0 0.1 0.0 1.2 0. 1.2. I.0 0.0 2.2 1.2 0.8 1.5 0.0 0.2 1.1 0.2 0.1 0.4 4.2 1.5 1.5i5 Sb) squiaset 0.2 0.5 0.? 0.2 0.0 1.0 0.2 0.0 1.0 0.8 0.5 0.? 0.0 0.0 0.0 0.0 0.0 0.0 0.2 2.4 8.814 Mi? I Patin station 0.0 0.1 0.1 0.1 0.5 0.4 0.1 0. 0.4 0.0 0.1 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.011 Oiatgul2sm 1oing Stogie 0.0 0.0 0.1 0.0 0.2 0.3 0.0 0.2 0.8 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.5

Powot WoppI 0.0 0.0 0.0 0.0 1.5 2.1 0.1 1.0 1.1 0.2 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 2. 0.SComicssltow 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.? 0.1 0.0 0.8 0.8 0.0 0.1 0.1 0.0 0.0 0.0 0.0 2.2 2.OormitoxygOtelca 0.5 0.1 0.6 1.0 0.5 1.5 0.0 0.1 0.4 0.0 0.0 0.0 0.0 0.0 0.40 0.0 0.0 0.0 1.0 0.5 2.4

Wlacliios. U"p8.s S 1.0.0)0. 0.0 0.5 0.5 0.0 0.? 0.) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0. 2.3 1.2

aUd 4ciito .2 0.0 4.2 0.0 0.0 0.0 0. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 4.2I

C~~~vaot 1992 104 1002 iOU ~~~~~~~~~~~~~~~~~~ p00 Jf1~~~~og ~~~~~~~Local tow, tot"l Local for! foM alocal Iow Tatal Lowa VoT toMa o.aI for. Ttoed Local t.V Su"O Low* low. toAl

Total Be" "oa 1.9 S.1IM1. 11.1 15.4 2417 10. 10.0 21.0 2.1 4.2 6.0 0.9 02S 1.2 0.5 0.1 0.9 U.S2 36.1 10.229qaLal comt2voq~o (aM 12. 0.0 a.0 1.1 2.2 4.0 1.2 1.4 2.2 0.6 0.e 1.2 *.J O.o 02 0.2 0.0 *.1 S.2 S., ao.stotal Be" Cost * ftbps1ol conetIogo 9. S.0 14.9 12.0 11.9 30.2 H 11. 2.4 24.2 9.2 4.9 0.2 2.1 0.2 2.4 0.4 0.1 0.4 29.3 42.5 00.0hoog*WOOes COs" Ax Of Sea Cost 0.1 0.1 *.1 0.1 0.2 0.2 0.1 0.1 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.0iti ca oSSinoSoO 0.0 0.2 1.0 1.2 0.9 2.4 1.0 0.0 2.1 0.0 0.9 2.2 0.2 0.0 0.8 0.1 0.0 0.1 .3 52. 1.6

talCo"t * LAose Vat*c $waell 1*1 W4 ALA Atl MA AL A E I A MAI h LAIJ UAl AA gs LZ 9*1 *4 *4 IL lIt 3.

""o 1K IIaBL IA ILZMAAU H ILIAli HA ELIELILIL AU1 LI A LiId34*4Li Ad ILilti

11 IsewospcGamew 0.0 0.0 0.0 1. 1.3 S.2 I.9 1.2 2.2 I.J 1.2 2.2 0.6 0.4 1.1 0.0 0.0 0.0 4.2 4.2 ao.5is Vestantof tosatao oleat 0.0 0.0 0.0 3. 2 .2 4.2 8.2 .2 4.J 2.2 2.2 5.2 1.1 1.2 2.1 0.0 0.0 0.0 10. W0.2 22.1

ownson"991 0.0 0GA 0.0 0.1 0.1 0.5 04 0.1 0.2 0.0 0.0 0.0 0.0 0. 0.0 0.0 0.0 0.0 0.2 .2 O.ACmOoWtoooll*SM 0.0 0.0 0.0 0.0 0.2 0.& 0.40 0.2 0.2 0.0 0.2 0.1 0.0 0. 0.0 0.0 0. 0.0 0.0 0.2 0.2oo.ttoqiOUla 0.1 0.0 0.2 0.) 0.1 0.2 0.1 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.1

Uaaolaooomo 5wiosm A Vabolao 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 . 0.AIriLoad gaitto 2.1 0.0 2.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2?1 0.0 2.1itotalsee, Coat 2.0 0.2 2.0 2.9 .2 10.6 S.2 9.0 20.1 2.1 9.2 * .42.2 1.S 2.2 0.0 0.0 0.0 29.2 162 264SPitloalt Costtagsss (12*) 0.4 0.0 0.2 0.0 0.0 1.4 0.0 0.? 2.2 0.0 0.1 1.2 0.9 0.2 0.2 0.0 0. 0.0 2.1 2.4 $.STotal Saso Coot # lbpatal C.otagsoqy 2.2 0.S2 .5 4.2 4.0 1234 4.0 2.2 8. 2.9 2.2 11.0 2.0 1.1 .? 0.0 0.0 0. 22. 10.1 42.0hoOOUgaog Coot 12 Of Bas" Cmest 0.0 0.0 0.0 0.1 0.1 0.2 0.1 0.2 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0. 0.2 0.4firta costtags0 0.2 0.0 0.2 0.0 0.) 1.0 0.0 0.4 1.2 1.1 0.2 1.4 0.4 0.2 0.4 0.0 0.0 0.0 2.2 2.2 4.0

!MeaL Won at LA Rd Id LI HA 33 WI LI A LIA Ul A! Id LI bl Ad Id W aI ML ALUtoaolAdaiaaao "ad 4wo4l

Motanla ON lAIcossme"W Suowvslam 8.5 1.0 2.2 1.5 1.0 8.2 0.0 0.2 1.2 0.0 0.: 1.2 0.2 0.2 0.4 0.2 0.2 0.9 2.0 2.3 0.2fiSoasejl Usasomoa £sltaote 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 I'1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1ftttIl,t*tIpcVtt. so99Owt to Oci@ac 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 6.. W.2 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.2 1.0 2.0 ITto.sIAkegd. Vtoot IIstudt. isAk 6tut 0.0 0.0 0.0 0.1 0.9 0.490.1 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.0Twatalag 0.0 0.1 0.2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.2 0.4 0.2to"ta so" Cost 2.2 1.2 2.4 1.4 1.0 8.3 0.0 1.2 2.1 0.0 0.0 1.6 0.2 0.4 0.1 0.2 0.2 0.2 2.2 2.2 10.01bftoal Cootlr.osao (102) 0.2 0.1 0.2 0.2 0.2 0.4 0.1 0.2 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.2 1.1total tao" Cot + lhjaloal Oitopaebp 2.1 1.1 2.0 1.0 2.0 2.1 0.0 2.2 2.2 0.0 0.9 1.0 0.2 0.9 0.1 0.5 0. 0.5 S.9 6.0 11.lgetooagss Cost Is GI sao" Cos% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.1PCs"ca otitosaoo 0.2 ',0.0 0.2 0.2 0.1 0.5 0.2 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.1 0.0 0.4 1.2

Total Tacheleal £OalataaootnaiaiaIaI I 34 id I4 LA 14 3 4 II L-Id3 At! LI Li LI L- id! LI LI Li AA A

total Cost W13 AL! 31A ILA Ut!n Ad. 313. iLl III Al W ALI Li *1* Ull 2.13 LAlt I A LIt 31A

-60- AN A 6

ESTIMATED CREDIT DISBURSEMENT SCHEDULEJ

IDA Disbursement Disbur_emeatFiscal (S million) profile (2)Year Semester Ending Semester Cumulative China Project

1993 June 30, 1993 la 7.2 7.2 0 6

1994 December 31, 1993 10.0 17.2 7 12June 30, 1994 12.0 29.2 16 24

1995 December 31, 1994 12.0 41.2 31 34June 30, 1995 20.0 61.2 48 51

1996 December 31, 1995 20.0 81.2 61 68June 30, 1996 10.0 91.2 69 76

1997 December 31, 1996 8.0 98.2 76 83June 30, 1997 7.0 105.2 83 88

1998 December 31, 1997 6.0 111.2 89 93June 30, 1998 5.0 116.2 94 97

1999 December 31, 1998 3.8 120.0 100 100

/a bnludes the initial disbursement of $7.0 million for the Spea Acoun

-61- ANNEX7

SuSION

Bank Supervsion laput

lTe staff input Indicated in the table below is in addition to regulr supervisionat he for poureme review, correspondence, and review of exports which isestmated at 15 staff-weeks during the first to third project years and about 10 staff-weekshereafter.

Approx. Staff-dates Activity SkllM needs weeks

Apr 93 * Expedite start-up * Water Supply & Sewerage 6* Reiew1 tender documents Specialist

c Give project implementation * Fi4ancial/lastitutionalvorkshop Specialist

0 Procurement Specialist

Oct 93 * Review project implementation * Water Supply & Sewerage 6and procurement specialist

* Revlew progresa in recruitment * Utility Management Specialistof managemet TA C Financlal Analyst

= Review finanecil accounts WaterSupply Compan

- Revlew commercial operationWater Supply Company

* Recruiltment of consultants forRiver Basin Study

Bar 94 * Revie project implementation * Water Supply and Sewerage 6and procurement Specialist

* Utility Management Specialist* Financial Analyst

Oct 94 Supervision misslon * Water Supply and Sewerage 4Specialist

* Utility Managemnt Specialist* financial Analyst

Mar 95 Supervision missiou * Water Supply and Sewerage 4Specialiat

* Utilty Management Specialist* Financial Analyst

Oct 95 SuperviIon mission * Water Supply and Sewerage 4Specialist

* Utility Management specialist* Fiancial Anslyst

-62- ANNEX7

8taff-datesi Activity Skil neoeds veks

Nor 96 Supervioul misi * Water supply 8_d s.vems 4Speciait

* UttlUty if_imt Specalist* Finanial Analyst

Oct 96 Sup8evision mssion 0 Water supply and swerage 4Specialst

* Utilty n t Speciaist*F Analyst

ar 97 Supervision Umion * Water Supply and SeWra 4Specialit

* Utility linag_ment Specialt* Fin1acia Analyst

Oct 97 Servsiou missin 0 Water Suppy ad Seweraee 4peci1lst

5 Utlity managemt SpecialistF Analyst

98 Last supetvision mssin and PCR * Water supply ad Sewera 4mission Specialist

* Utty' Fiacal Analyst

-63 - ANN

PROPOSED WATER SUPPLY AND SEWERAGE ORGANIZATIONS

A. CHANGCHU WAMR SUPPLY COWANY

Organiatn

1. The proposed revised organizaion of the Changdhun Water Supply Company(CWSC) as agreed during appraisa of this project in May 1992 is shown in Figure 1. TMeorganiztion consists of six departments, three of which form part of the Operations Division.In addion the Gene Maag of CWSC has a Planming see reporting directly to himL

2. is w oa structeprovides for stengenigof CWSC in severalareas:

(a) All operatal responsblities as well as coordinan for dt watertnsmision and supply bIne wors, pumping sta, treatmnet plans, andwater supply to the distibutionsystem is under one administratve and operating

(b) The Company has is own planning group to carry out long range strategicplanning for water supply, water rate adjusments, special studies and internal

(c) There wi be jint bfllig of water and sewer chges. A computerd billingsystem wi be instled.

(d) Personnel management and employee training is consolidated.

(e) Design capability for minor works for water main replacement and etensios,pumping stations and related apurtenace is enhanced.

(f) Record keeping is improved.

(g) Constuction sevi capabilities to enable CWSC to respond to pnori issuesare improved.

(h) The operatin of the water source works, the distribution system and waterproduction depame wM al report to the manager of the OpetionDivision. Ihis wil provide CWSC with more flexibilty and control over keycomponents which wil enable the Company to be more responsive to systemdemand.

-64 - A=

3. The CWSC Manager should involve his Depatmet Heads in the decision-making process. This can be achieved through the formation of an executive committee whichwould undertake reviews of current opations and mak reco ons relative to annualbudget preparations, new projects, utility rates and other matters requiring a senior managementdecision.

4. The following principles should be adopted by CWSC and approved byChangchun Municipality for implementaion:

(a) CWSC should operate on a full cost recovery basis with revenues generatedthrough water rates.

(b) Costs should be paid by users in proportion to the service they receive and theirability to pay.

(c) User fees should address both operational costs and debt retirement of capitalexpenditures.

(d) Water metering should be universal and the company should work towards theimplementation of this strategy. Water metering is essenial to fair cost sharingand to water conservation.

(e) CWSC should have the authority to make the operational day-to-day decisionswihin the approved budget and staff levels during the fiscal year.

(t) Operator and employee trainig and development should be given high priorityand the Company should encourage and facilitate exchanges at the intrnationallevel.

Responsib ilties

5. The responsibilities of the restructured CWSC have increased and are describedbriefly in the following text.

6. Planning Service. The objective of the Planning Service is to provide directsupport services for the General Manager. Jt includes Long-Range Planning, Legal Services,Internal Audits, Special Studies and Reports as well as Periodic Reports, Public Relations andinter Governmental Affairs. Long-Range Plamning includes: preparation and updating of theWater Supply Master Plan with the concept planning and preliminary studies for majorprojects, coordination of inputs to the master plan with companies and government agencies, andthe approval of all projects for compliance with the Water Supply Master Plan. Legal Serviceincludes: provision for in-house legal advice on matters concerning the operation andmanagement of the CWSC. Intenal Audts includes: making financial and operational auditsand assistfng the outside independent auditor. Special Stjles and Reports includes: carryingout studies and preparing reports for which there is no experdse or capacity in the operatingdepartments, at the requet of the senior managemen For example, long-range planning forrate increases in advance of future capital expenditure, to minimze the impact on water users,examine water rates with the purpose of recommending tariff action by CWSC to maintaineconomic viability, economic and cost/benefit studies, financial analyses and reports,

- 6S5- ANNEXB

organAzational studies, response to vaious governent queries, initves and activities,providing the Municipal Govermnet and other levels of government the necessary infonationand reports and, last but not least, public reladons (press, general reporting to the public, etc.).

7. Corpmte SevIces Department. Ihe objective of Corporate Services shouldbe to provide the working toos (staf, equipment, offices, etc.) for the company to be able toachieve the purpose of the Company. It Is a support service for the opeating departnents andthe managemen of CWSC. Corporate Services Department incldes: FTnndal andCommcal Servies (registry of customer accouns, meter reading, billing and revenuecollection for both water and wastewater service, gerl accounting and financial reportng forall cost centers,capital assets accounting and depreciation rates by types of assets, anmnuaoperating and capital budgets, monthly budget performance reports); Personnel Mnagament(maintain personal files, recruitment, posiion descriptions, salary admn n, addresshousing needs and beft of Company employees, employee relations, worker safety; raiing(staff development, preparation of mamns and procedures, etc.); Matias Mwaagensn(manage supplies stores); Central Epume SerWces (purchase and supervise mobile and heavyequipment for operatng departments as tractors, backhoes, loaders, other heavy specalizedequipment, trucks and autos); and Ionnadon Systms (plan for computization and supply andprovide ma _nten support for computer equipment).

S. EgeI Department. The duties of the Engineering Department wouldinclude: preparation of construction plans and budgets for capital projects; approval of projectdocumentation of other agencies; issuance and updating of water proJect standards andspecifications; supervision of capital projects for compliance with specifications and costs;provision of assistance to other branches of CWSC in solving problems of an engineering nature;maintenance of engineering records; computerization of CWSC records into GIS format;mainenance and analysis of data base for system operation for use in long range planing andoperation requiements.

9. Capital Construction Deprtment. 1Tne duties of the Capital ConstructionDepatent would include: Project Management (cost esimaing, materias requitoning/procurement, project scheduling, cost accounting); Constnucon Cews (construction of projects;supply of manpower and materials, safety program and public relations); Equipme Operaion(ease heavy equipment/trucks from Corporate Services; and, Small Equipment Mainennce(repair and supply small equipment and work tools to crews).

10. Source Water Department. The Source Water Department is responsible forthe source works (Songhua, Shitoukoumen and Xinlicheng supply systems) including waterintakes, pumping stations, transmission mains and appurtenances. It is planned to contract theO&M for the Maya-Shioukoumen works to the Water Resources Company.

11. Water Production Department. The Water Production Department would beresponsible for the water atment plans and wells, clear water pumping stations and reservoirs.Tasks would include facility operation and mantenance (process standards, water quality control,operational logs).

12. Distribution System Departmet. Duties of the Distrbution SystemDepartment would include: opetion of a 24-hour emergency response and dispatch office(handle emergency calls, maintain emergency crews); customer complaint desk; water metering

-66- ANNE:

(supply, in and servloe water met, calite eters); ep_met opation (lea oftucs). Ditrct ofice would bude: routine i_ o£ , vaves andstops leak detecton and repairs; installtlon of now service connections; preventve mitnnerecords mainteance, and nmpe program for relcenit andlor rbabiltaton ofdeteriorated wae mains.

13. Staffing of the restructured CWSC to memt the objectives and challenges formanagemnt ad opeaaon of dte wat utity mut be a piority for ChOgun Muidpalty.Selection of the ms capable pesonel fom witi CWSC to heod up eac of the d epand the opeatg diision i th firstep th at must be take.. Then a complee appra of thedministati, technical and labor oriented staff must be made to fill posii based on

qualcaions required for the position Cuetly CWSC employs 2,400 p ent and 700tmporary employees. On the basis of discussions held with CWSC peaonnel, it would appethat, based on consultants' asessments in 1990-91, some of the staff are not required becauof the requmnt to hire unemloye relatves. he estmaed staff requeme to addressproiect pImpi o b 1,370 an the basis of Iratonal Stat hing policies. Th total staff

comlemntrequired i sum b as follows:

Ltem Peranent Staff Temporary Staff Total

Current Operation 2,400 700 3,100

Stage I Implementation ProgramDistribution System 100 - 100Treatment Plants 0oo - 800Supply and Transmission 470 - 470

Total Current Plus Stage 1 3,770 700 4,470Staff Requirements

14. No increase in temporay staff is projected as it will take a few years for the re-srucred orgaizaton to get propery oriented and assess staff capabilities in relatiom to positonqualifications.

B. ClANGCUUN SZWELAGE CONMANY

15. Ihe objectve of the Changchun Swerag Company (CSC) is to collect, treatand dispo of all santy sewag in Cangchun, and to olect and divrt I-nsr he Changchun draiage basi away fom developed ars, thms preventg flood damagL eTheabo sould be acomplis by meeting the st a uatr by XEnvironmtl Pmrot Bureau and the policis of the Municipal OvanmenL Th financpolicies shoud alow dte Company to raise fmds hough usr fe and raes to cover al currentand captal expeses and to apply adeque to all its assets.

-67- -itmz8

16. Us amgchm Sew Compa (CSC) is bein acea and is panedoraizatio I provided tn FIgure 2. 7his orAWn wil eventually consist out of sevm

tee of which form part of te, WwarO peratio Diviso. The orgniztinand stffig ar oy indicative and wil ole with tm

17. Tho formAtn of CSC is a major strengthening of the watwat utiliy imof meeting requhapb vfor uility management, decsio makin opeton and maintenanceof th wastewater systm Othe are of stengein are as foLw: all operatgd q wil report to one Division Read who rqor to tho CSC Manager District offices

cootdi1sto their opwation od maintenance actvities through the Division Head; see_udateam crews shodd be devoted fUlly to the checking and reng of sewea facW

in eir disticts; agred flusdhig and bucket rodding schodues should be followed to asprper pefomane of sewers; and each disict should be epped with video nsetoeqipme to examine tOh state of repair of the sewer lines in order to determine repairpriories.

is. CSC will have its own Planning Service to undertak special studes and toupdae long range strategic planning. CSC mWll now geerate rvenue ch will be colectedby CWSC thoug a omprie joi blng proess on a Pee jfr swe bas. ThengineeDritg wil be able to carry outdesis of minor work. Drawing recordswill

be updated by this goup on a reuar basis (not done curny). CSC will have Its ownCpliance Moniorig Diviion to cary out mnitorn of industrial efflues dischaged tosews and receving stream to ass compliance with the sewer use by-law.

19. As in CWSC, the Mana of CSC must invlve his Depatunent Heads In thedecision-maki proce. is can be achieved through the fmation of an executivemanagement_committee comprised of the D epa nt Hexds which would meet monthly or onsom ohnergula basis to discuss budget prpaton, system opeaons view, sweragetarifti, industrial waste management, enronmental protecion measures, new projects and otemajor issues concerning the managemen and opaion of CSC.

20. Plannng Serice. The objectiie of the Planing Sei i to provide directsupport sevices to the Gener Manager. It will include Long Range Planning, Legal Sevies,Intern Audks. Specia Studies and R qs and Public Relations and In ve en Affrs.Lon-Range P g incudes the planming and coordination of the and updating ofthe Waswater and Stomwater Master Plams as well as concepul plans and prdiminay studiesfor major projects. Legal Serws provides for m4iouse legal advice on matters concening thoperton and mangment of te Company. Interna Asds is respoible for internal financialand audit and spport for eer audts. Spedal S e and Reporw this. srvicwill carry out st and pepa repor for whic there is no expro or capacity in the

wating departments, at the request of the senior for exaople onomic andcost_ed s_,l rate and cha saes. I o noa studies. PAlbk Relad odIrer wr mata 4hl is responsie for respose to various govepnmnta initiatives andacttes, submisions to Micipal GovNmet ad othr lvels of gov reqigcordnatio of multiple reprts, preaation of the Anmual Report frm te matedal smtted

-68- A8

by al dpm , preparation of normation releases on the company's activities and plams,prepton of pblc Ifrmation brochres on various wastewater issues, conducting seminarsand lectues for scool and geneal publc on wastwar, publWig the emloyee newsetterwith topics of nterest to the employees and tte managemen.

21. Corrate Sevice. Me objctive of Corporate Sevies should be to provideeffective service and support to the operating departmens and to the sior management of CSC.It inuludes: P cal Servces with regisy of customer accounts, gene acoung andfancal eotig for all cos ceers and companies, capital assets aountin and depreciationrgister, annual opeat and capitad budgets as well as monthly budget performanc reports;

onwaed YMme Is reponsible for staffing, scenig of applicant and hiring personnel,mai_daIng persona files, admi ting the salaries and pay scales, maintag cur positondesciptins,addressing housing needs of Company employees, employee rltions andadm I the Company's discipline policy, payroll and employee benefits administtion,timekeeping recording, including vacations and sick leave, staff training and development.Mastes Management involves materals evaluation and purchasing, supplying materia throughcent stores to all operatig departmens, maintaining materi inventoies appropriate for thelevel of anticipated actviy to prevent shortage of supply as well as ovesocking. CentralEqu4pen Servces: purchasing and keeping mobile equipment and heavy equipment for rentasO to the operating depE. qwpment would iclude tractors, backhoes, loaders, other

heavy seiized equipment, trucks and auos, servicig the equipment, training and cerfyingequipment opeators. brma Systems: for speciaized assisuance and advise to the usersof computer equipment, evaluation and selection of appropriate computer system, computersystems ifican, acquisition and commissioning, systems servicing, program development,stff trinig and assistance.

22. eelg Deprent. The objective of the Engineering Depatment is toprovide desig services fr the operatig and constructon departmen. It has three units;Desgn to prepare contruction plaos and budgets for capital projects, approve designs undertaknby other agencies, issue and dates ds and specificions for wastewater and stormwaterdesg and constuctin, provide assisance to other branches of the Company in solvingprobems of egieern nature; Engineering Records to main accurate egieaing recordsfor aU capital asets, make correcons and updates as necessary and computerize watwatercompany records ino a GIS format; and Systems Perfonnce Analysis and Ew lon: toanalyze the sewage flows, caractercs, infitration, pipe breaks, and energy consumption ona reguar basis, industi waewater maagement practices and water consevon measures atreguar intervals to assess bylaw compliance, penalty structures and overall wastewater treatmentand management practices, to analyze perfonnance of municipal wastewater treatment plants tomeet receivg waters standards established by the Environmental Protection Bureau.

23. Capital Consrunton Department. Ihe objective of the Capital ConstructionDqntmem is to built new wors by contractg and supervising the construction of major newworks and constuct themselves emergency works. It includes five units: Project Managemenm,for contract prepaation, management and construction supervision, E:stalng and Accountingfor constucting cost esdmatig and accounting, onsrxtion Crew for minor construction,Equpmet Opffalo to opete heavy equipment and trucks; Equ Maenan,repak and supply small equipment and work tools to the construction crews.

-69- AnKJ

24. Wastewate Coleeion Sstem Departmet. he objectiv of the Wa aterCollection System Depm t is to ensure tha all exting sewer work are well maitaed andkept in optmal operatng condidon. t includes a number of serices for exaple 24-HourEmergency Response and Dispatch Office to receive and log emegey caUs and coordinate andass standby crews to address emergency investaons and repas, follow up on complaints,keep operati and repair statstics. It has district offices which perfom regular ispections ofsewer sysem compones, operat and maintain pumping station, cay out video Inspectinprogrm tD detme seawe system repair and rehabilitation r e , replace deriratedservice connections, investg and eiminate cross-connections from he stormwat system andmaitain accurate records.

25. Stormwater Drainage System Deparbnt. Ihe Stormwater Diage SystemDepartment has similar responsibilities as for the Wastewte Collecon System Dep , butspecifically fbr the drainage system Iitialy can be envisaged that both depaents arjoined.

26. Munidpal Wastewa Treatment Department. The Wasta TreatmentDepartment has very difeen staff from the other two opeating d as opeatingtreatment plants asks for highly specialized knowledge in chemical and biologia processe. Thestaff will have to operat the plant and continuously evauate the process and system peon cein relation to effluent discharge standards. Staffing and tining of dis demnt wMi takeplace during construction of the treatment plant.

27. Complan Monitoring tmeD . TIhCompIianceMonitoringDeD_rtmentwill have to work closely with the other opating d In ensurig that industrdischarges to the sewer system comply with the sewer use bylaw and effluent dischagestandards.

Shaft

28. Fromtihestandpointof staffing, CSC Ismore critical CWSC sincepersolwith appropriate qualifications may not be milable from within the exit wastewater utiliyto fill key positions for the proposed Company. It may be necessary to eamine the tot seniorstaff requirement for both CWSC and CSC in relation to senior staff availability from theexsting organizations. The transfr of some of the experienced employees from CWSC to CSCmay be necessary in order for CSC to get a good start ChangChun Municipality will need toaddress this issue as soon as an agreement is readced on project impl n.

29. Curendy the Construction Bureau employs 330 people involved with thesewerage system. Consutas have esdmated that an additional complement of 670 people wilbe required by 1996. The staffing reqireme are smmarizd as follows:

-70- ASB18

Item Peznanent ftaff

Current Operation 330

Stage I Implmntation ProgreNorth Suburb WITP 200Collection system Operation & Maintennce 320Collection System Rehabilitation/Rlplcsment ISO

Total Current Plus stage 1 staff Requirement. 1,000

30. mem reiement for tempory staff cut be dfine at is time sie the neworganzato can only deemin th ne for temporary employees when CSC has beenesblied and in operation for a piod of time.

-71- AWU

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Changchun Wastewater Management Company

. I~~~~~~WASTEWATER COMPANYI

PLANNING SERVICE* LONG RAN PLIM SPEC1 STUDIES. LEOGN SERYlCES AN REPORTS* SEWER RATE .NA N

SCiEOLE WPllT .lo .TO WATER COMPNAY 31TWOBI

* IMTERNAL AtIITS 'E,O, ENTAA'FAIR

WASTE WATER

CO-PORATE EIQfiIWQ WASTEWATER STORMWATER MWICL CAPITAL CIWUANCESERVICESu CLCT DRAKACE WASTEWATER CONSTRUCTION MOMTORtOEPART#1T S PARMENT SYSTEM SYSTEM TREATMIENT CWTIIENT OEAMTET

.I .M DEPMEN OEPARTMENT OEPARTMW

. FPSANCIAL . DESKO ISTRICT OFICES DISTRICT OFFICES * PLANT OPERATION | PROJECT * SANITARYSERVICES * RECORDS * OPfRA~TIO AND * OKf5ATIDN AND AM UA4AW4ANAC MANAGEMENT * CO1MNE

* PERSONE * SYSTEM MAINTANANCE OF MINTAWACE I BLDUTS AND * ESTRATWO & | INDUSTRIALMAEIMENT PER FORANCE SEWERS AND * EQUPNENT COSTS ACCOII INTO - STOMWATER|

*MANGERMS ANTELUATION P1W STATIONS OPERAtIR0 * REPORT | CON * INDTRALN"QEIGNT EVALUAT *REGULAR * RtEGULAR PREPARATION CREW IESN

* CENTRAL INSECTION JSETU PROCESS AND * EOLeIENTLIESNEOUPUEN * VVO I SYSTEM OPERATIN

* CENtR,".IN * VDEO NKCtl0N # CROSS PREFORMANCE *a SA EOW'UENI

: SILI *lT l MA |4TERIALS MO |-

COPRECTION |N* EFCTT IrOCOT CONTROL* PSS COT

* RECORDS |

-73- ANEtX.9

ASSUMPTIONS FOR FINANCIAL PROJECTIONS

CHANGCHUN WATER SUPPLY COMPANY (CWSC)

Tariffs Tariffs increase by the following percentages. Increases are effective inDecember of the prior year to slow for a full year's biling at the higherlevels.

1993 68%1997 17%1998 6%1999 1%2000 3%2001 3%

Tariffs cover aU operading costs including depreciation and interest.

InfLation Infation is 6 percent In 1992 and 5 percent thereafter.

Operating Costs An cost except interest and depreciation increase at the rate of infaion.

in addition, 1993 power and chemical costs are adjusted by thepercentage increase in production.

Incremental COSts for 1997 are based on estate by CWSC and itsconsultants adjusted for inflation.

Supply and transmission costs are inclwfed in CWSC accounts eventhough these wil be contacted to the Water Resources Bureau. CWSCwill pay all of these costs.

Sales An additional 27 mld of water is avaiable for sale in 1993 to bedistributed in the same proportion as esting sales.

An addional 380 mld is available for sale in 1997 as the result of thisproject. It is distruted to residential and nonresidential users in thesame proportion as current sales.

These are conservative assumptions as it is likely that indusies will geta larger share. However, in the first year domestic sales may be higheras industry may take more time to adjust to the increased supply.

-74 - ANNEX2

Unbfled Water Uibslled w 1s20 pecent of production eacept in 1997 when it Is25 percen and 22 per in 1998. The hier pec ges rflect thetime necsy to deal with leaks caud by higher pressures.

Capital Spending The only capital program is the project.

Lending Teram hnterest is S.5 percent with repyme over 10 years begining in 1998.

Local Fhnndyg The Goverment of China provides Y 180 mIllion; Jin Provinceprovides Y 300 million; Changchun Municipaity provides all fundsneesary, not provided by CWSC. CWSC's contribtion b lited tothe amount available from the assumed tariff nase. ADl state,provincial and ciy funds are equity conrut.in. Equity conbutionsare cncntated In the early years to meet cash flow reqeuim .

ProJect Compleon The proje is substantally completed and opational in December 1996.

Staffing Staffing increases in 1997 from 3,100 to 4,470, as estmated by CWSC'scotsulants.

Profits All profits are retained by CWSC.

Account Recivable Accounts receivable are equal t thwree weeks' sales; this is the 1990level.

Accounts Payable Accounts payable are adjusted for increases in operating costs oter taninterest and dep on.

Inventory Inveory is adjusted for increases in chemicals, repairs, andmaintenance.

-epredation Depreciation is 2.5 percent of gms fixed assets.

Replacement Reserve Transfers to the reserve equW epedtur. Ihus, thereis no net impact on cash fl*w.

Opeat interest The cuet level plus the project. The project loan conmmtent fee isincluded wih operating inters

Capitalized Iterest All interest is capitalized through 1996.

Fixd Assets Fixed Assets increase by half of 1990 work in progress in 1991 and1992. In additon, they incres by Y 167 mIllion in 1993 bece of thecompletion of cur work on WTP 2. They remain constat until1997, then increase by the amo of the project expent, Includingcapitized Inees

-75- A

CmN

CICANGHUN WAT1ER SUPPLY AND ENVIRONMENTAL PROJCProet FanoImg Sum-m

Yuan USS(Million) (miion)

Total CIAi 1,450 266PrOJet 1.323 241Capitalized interet 82 1SLand 54 10

Watotal 1,203 219Prject 11093 199Cayitalized Interest 70 13Laud 39 7

Wastewater total 269 49Proect0 243 44Capialied intst 11 2Land 1S 3

IDA Shae (Not including land cost or- -de

Water 49 %Wasteuwatr 49%

Loa termsAmortition 10 YamBegins 1998Ifnt rastem 6.5%sCo _nmibacat foe 0.75 %

Lo AmountWater 538 98Watwae 120 22TOal 658 120

Annual Ddat Savice PWaer 7SWastwte 17Total 92

Local Share of Project CostWater 665Wastowater 149Total 814Les St" & Prvino

GOC Aocation 180 33Provica 300 55

CMG Share 334 61Finane Bume 179 33CWSC 1SS 28

CHINACHANGCHUN WATER SUPPLY AND ENVIRONMENTAL PROJECT

Waw Demand and Sales Proas

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001<- Actul <- - Projed

Pop"UliOn (000's) 1,736 1,762 1,788 1.815 1,842 1,870 1,898 1,926 1.955 1,985 2,014 2,045 2,059Incres 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 0.7%

Water Dend

Resddent 218 230 243 256 271 286 302 318 336 355 374 395 417InstItiona 105 107 109 111 114 116 118 121 123 125 128 131 133CommIal 15 15 t5 15 16 16 16 16 16 16 16 17 17IndurIl 303 315 328 341 354 369 383 399 415 431 449 466 485Total 641 667 695 723 7SS 787 819 854 89a" 927 967 1.009 1.052

Watr SalesResidet 0 100 100 91 91 97 97 97 97 97 97 97 97 97Instowna 0 90 90 82 82 88 88 88 88 U U 88 88 88ComercIal 0 IS IS 13 13 14 14 14 14 14 14 14 14 14Indust 0 137 13? 124 124 133 133 133 133 133 133 133 133 133Total 0 341 341 311 311 332 332 332 332 332 332 332 332 332

Percntaep ChangRdenald 9% 0% 7% 0% 0% 0% 0% Os 0% 0% 0%lnsitludo. -9% 0% 7% 0% 0% 0% 0% 0% 0% O% 0%C _mmrcI -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0%Industrl -9X 0% 7% 0% 0% 0% 0% 0% 0% 0% 0%TOt -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0%

Wte Sales (Lcday) 246 250 251 253 268 273 373 373 373 m 373 373 379

Wa Sals (Lpcaplday)UMA S1 0

Consuer Cateor

Ixncease) 0 0% -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0%310 310 310 333 333 333 364 480 601 631 63. 63S

Rtaw wr w ales 46 46 46 46 46 46

Demestl Wae Rate 0.10 0.10 0.20 0.20 0.34 0.34 0.34 0.34 0.39 0.42 0.42 0.43 OAS(Yuala3) 0.20ndcionmo.lbult. Rate 0.30 0.30 0.50 O.S0 0.84 0.84 0.84 0.84 0.98 1.04 1.05 1.08 1.12

0.50Averag Watr Rate 0.23 0.33 0.38 0.38 0.64 0.64 .4 0.64 0.7S 0.79 0.80 0.82 0.85

Cumulaive 1096% 17% 22% 29% 3S% 42% 49% 56% 64% 72% SIs

Cimagciun Watw Suly & Envirormental Ptoject

Caucl2mn Watr SupplV CommanvProliected Incom Statem

000's Yuan

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 ooo 2001REVENUE Actu P- - Projeted - _l-

Domestic 6,318 10,525 10525S 18,907 18,907 11,907 18,846 40,661 46,094 47,276 48,221 50,150hutituional 13,278 18,093 18,093 32,501 32,501 32,501 32396 69,899 79,237 81,269 82,894 86,210Commerca 2,194 3,337 3,337 S,994 5,994 5,994 S,97S 12,892 14,614 14,989 IS,289 IS,900Industrial 25,681 26,404 26,404 47,431 47,431 47,431 47,278 102,007 115,635 118,600 120,972 125,811Odler 2,129 1,719 1,719 2,888 2,888 2,888 2,888 3,466 3,777 3,777 3,853 4,007

Toal watr reve 49,600 60,078 60,078 107,721 107,721 107,721 107,383 228,924 259,357 265,911 271,229 282,078

Co.noloRepairs 80 64 64 108 108 108 108 129 141 141 143 149

OPERATING REVENUE 49,680 60,142 60,142 107,829 107,829 107,829 107,490 229,053 259,498 266,051 271,372 282,227

EXPENDffURE

Salaries 4,920 S,632 5,970 6,268 6,582 6,911 7,256 14,949 15,696 16,481 17,305 18,171Power 11,322 16,081 17,046 19,138 20,09S 21,099 22,154 63,037 66,189 69,498 72,973 76,622Cemics 9,749 13,147 13,936 15,646 16,428 17,250 18,112 38,508 40,433 42,455 44,578 46,807Maindmance S,975 5,744 6,089 6,393 6,713 7,043 7,401 14,534 15,261 16,024 16,825 17,666AdinIovorhead 3,768 4,539 4,811 5,052 s,305 5,570 5,848 19,682 20,666 21,699 22,784 23,924Sals Tax 1,619 1,965 1,965 3,523 3,523 3,523 3,512 7,391 8,374 8,585 8,757 9,107Rotirement 1,265 1,379 1,462 1,535 1,612 1,692 1,777 1,866 1,959 2,057 2,160 2,268Major Repir S,565 7,110 7,S37 7,913 8,309 8,725 9,161 9,619 10,100 10,60S 11,135 11,692Interest 218 IS 20 969 2,707 1,218 355 34,191 34,176 32,371 29,611 26,671

EXPENSES 44,401 55,612 58,835 66,437 71,273 73,036 75,576 203,777 213,454 219,776 226,129 232,928

INCOME BEFORE DEPR 5,279 4,530 1,307 41,391 36,556 34,793 31,914 25,276 46,044 46,275 45,244 49,300Depreciation 3,020 5,451 6,012 8,117 10,218 10,218 10,218 25,175 40,210 40,287 40,287 40,287TOTAL EXPENSES 47,421 61,063 64,847 74,555 81,491 83,254 85,795 228,9S2 253,664 260,063 266,416 273,215

-__… -- … _ _ - _- - _- - __ ___ _- - -_ ____ ----- - - _----- - _ --------

NET INCOME 2,259 (921) (4,705) 33,274 26,337 24,574 21,695 101 5,834 5,988 4,956 9,012

Changobu Wate Supply A Evlrownesta Projec

C uachn Watr S= om vPriected Ble S

OOO s Yuan1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Asss Astuel - -' - - Projected-Grossfixed met 134,323 240,312 240,666 408,727 408,727 406,727 406,727 1,605.291 1,611,491 1,611,491 1,611,491 1,611,491Accumuldod depreciaion 34,847 40,29 46310 54,428 64,646 74,864 6S,082 110,257 150,67 190,754 231,042 271,329N1t fixmd ase 99,476 200,014 194,356 354,299 344,081 333,863 323,645 1,495,034 1,461,024 1,420,737 1,360,449 1,340,162Workin prgm 708 1,415 1,061 170,666 653,634 1,014,007 1,178,264 (0) (0) (0) (0) (0)

Cas 7,860 11,745 14,522 14,2 14,522 14,521 14,522 31,464 33,252 37,324 37,702 38,mAcOunt evablems 3,007 4,752 3,466 6,215 6,215 6,21S 6,19S 13,207 14,963 15,341 IS,648 16,274Othereeiiabhs 779 1,560 1,S60 1,560 1,S60 1,S60 1,560 1,560 1,560 1,S60 I,60 I 5w1nvma 4,471 3,787 4,014 4,363 4,581 4,810 S,050 9,126 9,53 10,062 10,565 11,093 °LO tesm lavtme--I 226 326 326 326 326 326 326 326 326 326 326 326ToWl "N 116,527 223,599 219,305 S51,9SI 1,024,918 1,375,302 1,529,562 1,S50,718 1,520,706 1,485,350 1,446,250 1,4.0,347LisbW

Awoomspqabh 7,733 7,100 7,511 8,361 8,756 9,172 9,606 21,657 22,818 23.933 25,096 26,340Slaoattwa be*lam 1,800 1,S74 1,574 1,574 1,574 1,S74 1,S74 1,574 1,574 1,574 1,574 1,574Tae MINb 610 150 ISO 150 150 ISO IS ISO LSO O150 I0 ISORVp*r 3,402 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775( s a (2,419) (2,792) (2,792) (2,79 (2,792) (2,7 (2,792) (2792) 7M (2,794 (2,72 792)Toal e t 11,126 11,807 12.218 13,066 13,463 13,87 14,313 26,364 27,S25 28,640 29,803 31,47

MDA 0 63,566 295,446 460,660 S25,702 534,706 497,701 455,241 410,022 361,863TOWal lim 11,126 11,807 12,218 76,634 308,909 474,539 540,01S 561,070 525,226 483,61 439,62S 392,909

1quty IOS,401 211,792 207,067 475,316 716,009 900,764 989,S47 969,648 99S,481 1,01 1,006,425 1,01,S437

TalduIq 16S721,0 SI9I1041 1,7,0 1S952 ,S,1 1,07814S5 l,4,5I

Cani.Water Suppily & Envirmmitl Prjoect

Clunon Wabt Sply CSbouce and Awlication of FBuds

ODD's Yuan1990 1991 1992 I993 1994 1995 1996 1997 1998 1999 2000 2001

Adua C- -.- - Projec --ted SoownNA Io n. 2,259 (921) (4,705) 330274 26,337 24,S74 21,69S 101 S,834 S,988 4,956 9,012

Deprecition 2,809 S,451 6,012 8,117 10,218 10,218 10,218 25,175 40,210 40,287 40,287 40,287

Sitae contnrnltion 17,447 66,677 44,798 10,587 0 0 0Povhincia ontition 29,079 111,127 74,664 17,645 0 0 0 0 0Cb=nrA=un mounicial gov. (1,981) 107,312 18,430 36,S51 40,718 38,856 0 0 0 0 0IDA Craeit 63,566 231,880 165,214 6S,042 9,004 3,050 0 0 0

Tol sour 3,087 111,842 1,307 339,913 482,791 360,187 164,044 34,280 49,094 46,27S 45,244 49,300

Use:Worig capil (900) 1,261 (1,470) 2,247 (177) (186) (214) (962) 1,051 (257) (354) (89)Amortizaion 0 0 0 0 0 0 0 0 40,055 42,460 45,220 48,15Capitad speg 853 106,696 0 335,600 471,300 335,800 132,200 18,300 6,200 0 0 0Capitized inst 0 2,066 11,668 24,S73 32,057 0 0 0 0 0

Tdal us (47) 107,9S7 (1,470) 339,913 482,791 360,187 164,043 17,338 47,306 42,203 44,866 48,070

Chap incash 3,134 3,88S 2,777 0 (0) (0) 1 16,942 1,788 4,072 378 1,230Cash b_aa 7,860 11,745 14,522 14,S22 14,521 14,S21 14,522 31,464 33,252 37,324 37,702 38,932

-80- ANNEX9

Changchun Sewerage Company

Ei; IncomeSat

1999 12

OPERATING REVENUE 69,554 72,337 74,191

EXPENDITURES

Salaries 9,295 9,777 10,259Power 5,787 6,076 6,380Maintenance 5,812 6,102 6,407Admin/Overhead 3,499 3,674 3,858Sales Tax 2,274 2,365 2,052Retirement 1,859 1,955 2,052Sewer Cleaning 3,645 3,827 4,019Interest

EXPENSES 39,197 41,558 42,602

INCOME BEFORE DEPRECIATION 30,358 30,779 31,590Depreciation 17,414 17,414 17,414TOTAL EXPENSES 56,610 58,972 60,015

NET INCOME 12,944 13,365 14,176

Amortization 8,912 9,491Assumptions

Water Sales (000 cubic meters per day) 596 619 635Percentage Charged 80% 80% 80%FenperCubic Meter 40 40 40Cumulative inflation since 1992 35% 42% 49%Fixed Assets 696,544 696,544 696,544Depreciation Rate 2.5% 2.5% 2.5%

Operating costs are based on engineering estimates adjusted for inflat.

-81 - AANE lo

ENVIRONMENTAL IMPACT ASSESSMENT

Introduction

1. Changchun is the capital of Jilin Province, located in the northeast of thePeople's Republic of China. It is the center for political, economic and cultural activities of theregion. The city has experienced steady growth In the past and is anticipating contued growthin the foteseeable future. However, throughout much of its recent history, Changchun's watersupply has been unable to keep pace with increasing industrial and domestic demand. 'Me watershortage has now reached such proportions that it threatens to suppress further industrial anddomestic developn2nt within the city. Also, Changchun currently has no wastewater treatmentother than the 6,600 m3/d treatment facility at Auto Plant No. 1. Many areas of Changchun relyon creeks and open channels, which pass through residential and industrial areas, to convey rawwastewater to the Xinkai and VItong Rivers. This exposes the citizens of Changchun tounacceptable health risks from disease-csing organisms and toxic chemicals. The ecosystemsdownstream from Changchun also suffer from these conaminated wastewaters.

2. The water supply and environmental project for Changchun is aimed atimproving the existing water supply and wastewater management systems. The existing watersupply capability will be expanded from the present 438,000 m3/d to 794,000 m3/d at thecompletion of Stage 1 (1996) of the project while wastewater treatment systems capable ofproviding primary treatment will be constructed for the city.

3. For the water supply portion of the project, in addition to transferringapproximately 450,000 m3/d of water from the Second Songhua River to Changchun, a numberof other components necessary for the treatment and delivery of the treated water wil also beincluded:

(a) water transmission via the Chalu River and the Shitoukoumen Reservoir to thecity,

(b) water treatment plant construction and upgrading,

(c) water distribution system analysis and improvement, and

(d) water utility reorganization to streamline the existing structure into a moreefficient and effective operating company.

4. The proposed wastewater management project will construct a primary treantplant (North Suburb Wastewater Treatment Plant), that will treat 368,000 meld wastewater fromthe Yitong river drainage area collection system and remove about 50 percent of the pollutioncharge.

-82 - ANNEKI 10

5. The wasewater management plan also nudes:

(a) etnion of the exng watwater collection system, and

b) foration of a wastewater utlity company.

6. A Candian consulting firm, UMA Engneeing Ltd. (UMA), was retained byChangchun Municipality to develop a strategic plan for augmenting water supply and addsingenvironmentl protecton to the year 2020. The plan was developed in August 1991 as part ofthe feasiility study in accordance with the World Bank's eiements.

7. The World Bank's policy for investment lending requir that an eonmalimpact _asm (EIA) be prepared for large-scale water supply and wastewater managementprojects to ensure that the development options considered are environm y sound andsustnable. bis report presents the baseline as well as the predicted status of the projectactivities during the pr uction, constuction and operation phases of the project. Anenvironmenta management plan fc: mitigating adverse Impacts and maimizing beneficialimpacts has also been outlined.

Policy, Legal, and AdmInistrative Framework

8. This environmental impact assessment is prepared in accordance with theequirements of the World Banks Operational Directive 4.01. ne national, provincial and

local enviromental laws and regulations were also referenced.

9. Ihe Chinese National Environmental Protection Agency (NEPA) is the highestauthority on environmental policy but shares authority with the Ministry of Construction and theMnistry of Water Resources on the development/utiation of the Songhua River waterresources. Similarly, Jilin Provincial Eavironmental Ptecton Bureau (JEPB) is the highestlevel of authority on environ l policy in the province. JEPB shares authority withPrvincial Bureau of Constuction and Bureau of Water Resources on the provincial waterresources. The Song-Liao River Basin Administration is also responsible for and coordinatesthe water quantity and quality of the Songhua River.

10. During the enviromental data collection and impact assessment stages, severalmeetings were held. Representtives from different local, provcial as well as national agenciesparticipated in these meetngs along with UMA and the World Bank staff and consultans.

Analysis ot Alternadves

11. Several alternatives concning the transport of water, the water treamentsystems and the wastewater management schemes were examined in the feasibility study. Thosealtenatives included a direct pipeline from Maja to Changchun, pipeline instead of unnelelement, different intake locations, etc. Based on the overall considerations, but primarilyeconomic, cost and enviromental fctors, one alterative was selected. lhe following sectiondescribes the recommended alternative.

- 83 - ANNX 10

Ptojec Descriptn

Water Supply

12. Ihe watr upply portion is the main objecdve of this project. Therecommended water supply altetve provides for the trasmison of raw water from theSecond Songhua River tO Changhn via the Chalu River and the Sh u Reservoir. Ihewater intak from the river as well the fist of three new pump stations will be located at Maja;the other pump stations will be located at Tunshasi and Dasui. Tle route of the tserredwater wlll take it from Maja tO the Tanshansi pump staion, trough te 7.9 km Laoyedingtune, to te Dasul sation and into the Chalu River. At the north end of the Sho nReservoir an equal volume of water will be withdrawn. The Sh men Resevoir intakelpump sto will move the water to the Fanguguo booster pump station where the supply willsplk between th rutes to the exst Water Treatmet Pln No. 1 (T 1) nd WaterTreatment Plant No. 2 (WTP 2). All of the raw water supply for WTP 1 and some of thWpply for WTP 2 will be provided from the Second Songhua River. The balance of the supply

to WTP 2 (220,000 mP/d) will come from the ShooeChalu basin In addWon,apprximaty 20 percent of the supply for the new Water Treatment Pla No. 3 (WIP 3) wilbe from the Second Songhua River. The remaining 80 percent will come direcdy from theXinicheng Reservoir through twin pipelines.

13. After frs stage construction (1991-9) the daily withdrawal rate from the SecondSonghua River will reach 450,000 m3Id. After the second stage of invetment and construction(1996-99) the withdrawal rate wil increase to 950,000 m&Id. Since the city wil be in a constanstate of undersupply it is likely tat the withdrawal rate will continue to increase in the earlyyears of the next century. Further expansions of pumping and trent capacity may becomenecessay.

14. As additional water tetment capacity wil be required a new 220,000 m'/dplant, referred to as Water Treatment Plant 3 (WTP 3) will be contructed. Also, rather thnexpanding the old and inefficient WTP 1, a replacement plant referred to as WTP 1 ReplacementPln (WTP 1 R), wil be bult at a later stage. Upon completion of tds planthe originalWTP 1 will be decommissioned.

Mundelpal Wastewater Man It Stratea

15. The wasater management portion of this project is provided to improve thecurrent and anticipated wastewater conmin problems in Changchun. The maincompoents for the proposed municipal w ater management stategy are:

(a) Establish a new Wastewater Company to manage and oversee all areas of themunicipal wastewater system;

(b) Initiate a citywide waswater monitoring program to accurately deterine thevolumes and ch cs of wastewater flows in the various contribut areasof the city;

(c) Complete construction of the Yitong River intrceptor sewer to conveyw _stewae to the site of the Nordh Wastewater Iem Plan his will

- 84 - ANNE la

include 3 km at 1.0 m diame, 1.9 km at 2.8 m diameter and 4.8 km at 3.0 mdiameter concrete pipe;

(d) Constuct a 368,000 m3/day primary wastewater treatment plant at the NorthSuburb Wastwater Treatment Plant site. Plant facilites will include inletworks, lift station, preatmen (screening and aerated grit removal), primaryclarification and sludge pumping and anaerobic sludge treatment followed bysludge dewatering; and,

(a) Implement a staged rehabilitation program fr the exisng wastewater collectionsystem. Ihe objective Is to upgade the lateral, trunk and interceptor sewers toreduce inflow and infiltration.

Indutil Waste Management

16. Currenfty Changchun has a diversity of industries but without an agteedindustr waste management strategy. Each factory discharges or treats its own wastes with

minimal overall envionmental consideration. The main components for a future industrial wastemanagement project are as follows:

Institutonal Reform

(a) Concurrent with the establishment of the recommended Municipal WastewaterCompany, implement a sewer use by-law and attdant regulfions for industriwaste discharges into the municipal sewer collection system.

(b) Expand the responsibility of the present Song-Liao River Basin Adminisionto Include ambient water quality management of the Second Songhua Riverbasin. This nsration would revise ambient water quality guidelines asrequired and undertake regular monitoring of the rivers and streams within thebasin. A draft terms of reference (OR) for the improvement of the Song-LiaoRiver Basin Adminisation has been prepared.

(c) Form a planning advisory group composed of State, Provincial and the SecondSonghua River Basin Adminitation to advise the Wastewater Company and theChangchuw Environmental Protection Bureau (EPB) in the formulation andreview of standards for effluent control.

(d) Establish a Provincial Authority for Industrial Standards and Approvals. ThisAuthority would establish minimum discharge standards to be adopted withinJUin Province.

(e) Establish a Compliance Monitoring Department within the proposed WastewaterCompany. This department would be responsible for approval and licensing ofall industrial wastewater dischages within the boundaries of Greater Changchun(Six Counties). This Department would adso conduct compliance monitoring ofall industrial discharges to the municipal sewerage collection system.

-85- AN= XO

(t) Changchun EPB would be responsible for compliance monitoring of industrieffluents which discharge dkety to a reeving wat orse within te city.Industrial discharges outside the city limits (Six Counties) would be Iheresponsibility of the Provincial Auhiority.

Industrial Parks

17. Currently there is no industrial park etablishment in Changchun. It isrecommended that an industrial parks be established in the northeast and southwest secions ofthe City to ensure proper management of the numerous industries. A first site was aleadyselected by the Changchun municipality. The project includes -Changchun ToxicdHardousWaste Management and Industrial Park Studies" for which a draft TOR has been prepared(Annex 11).

Toxic/Hazardous Wastes Tramportation and Treatment

18. Changchun Municipality reported that currently the city generates about 5,000tons per year of cyanide from the No.5 Chemical Plant, about 40,000 tons per year of boronsludge from No. 1 Chemical Plant and approximately 5-10 tons per year of nitrobeee eherand aminobemzene ether from Changahun Pharceutical Factory. Landfil and inceaton arebeing used to dispose these toxic/hazardous wasts. it is anticipated that after the completionof the Changchun Water Supply and Environmental Project, new industries and factories willbe established and additional toxic/hazardous wastes will be generated. During projectprepration, a centralized collection area was aready selected by the Changchun municipality.

19. Ihere is a need to develop a toxic/hazardous waste ortation andt mstraty for the City. The above-mentioned TOR for the Toxic/Hado Wastes Managementand Industia Park also describes the details of this strategy (para. 17).

WatS Conservation Policy

20. Currently Changchun has no set water conservation policy although it is awareabout the need and potential benefit for such a policy. The ETA recommends a comprehensiveindustrial water conservation program be established to reduce water consumption and wastegeneration. Elements of this policy would include recycling of wastewater strams withinindustries, reduction in water requirements per unit of production, employee trainin progmsin water conservation and waste reduction. The TA included in the project focuses on thisproblem.

21. To further encourage water conservation, the Water Company wiU graduayimprove with the help of TA, accurate water metering, and charge industil conm on anwincreasing block" rate basis. The price of supplied water should increase as the consumptionincreases, rather than remain a fixed price per unit of water.

Envronmental Baseline Data

22. Changchun Municipality is located in northeastern China at proximately43°55'north latitude and 125°18' east longitude. The centra service area of Changchun has apopulation of 1,762,000, as detmined by the most recent census taken in 1990. The

8-A I

taphy of the Province comprises the Song-Liao plain in the certral part, the lower grasslandregion in the west and the Canai mountaim which dominate the landscape in the eastern part.

23. Chang ihns inthe cent of the Song-Liplain. The genera relief of te cityis unlatng with the lowest elevation being 194.0 m above sea level datum and the highestelevation at 247.8 m. The lowlying area is aong both sides of the Ytog River. The highestelevation is on the ridg sching fiom the universiq area in Zhaoyang district aong therailway tD the southwestem part of the City.

24. Changchun has a contnenta climate; the wir are long and cold and themmers are hot and humid. Low winter t etu can be -40C and high summertemeraturs have reached 39C. The average annsal precipiation Is approximately 600 mm.

25. The Ytong River flows from south to north through Changchun. A secondriver, the Xial, is a tributary of the Yitong and flows from south to north outside the westsuburb of the ciy. Flows in these rivers are nomaly low and receive the watewatersdishaged from residendal, institutional, commercial and industrial development. These tworivers discarge to the Yimma River which subseentlydcharges to the Second Songbua River.

26. The main crops in Changchun area are corn, soyben, rice and grain. 1dustriproduction in Changchun Includes automobile, machinery, chemicals, pha cal producs,pape, textiles, elecunics, plating, food and others.

27. Chang bun is siated in a wae-short region. he small river bsin andgroundwater yields are unable to provide sufficient water for the city. Ihe present sources ofsupply are the Ximlicheng Reservoir on the Yitong River upstream of Changchun (184,000 mIday) and the Shoomen Reservoir which is fed by the Yinma and Chalu Riversapproximately 40 km to the east of Changchun (220,000 m?/day). Grounwater wells within theCity contribute 34,000 m?/day. Currently the water supply works are admistred by the WaterSupply Company which repots to the City Utility Bureau.

28. Wasewater treatm and e protection is viruly nodstent inChangchun. The bulk of the wastewater is collected by sewers and discharged directdy to theYitong ad Xinai Rivers without treatment. An excepon is the No. 1 Auto Plamt which hasa treatment plant (25,000 mOld capacity), but its perfrmance is questionable. The presewamwat_ collection system i8 not sufficient to serve the demand for drainage. Average sewercoverage is 40 to 50 percent of the city area, and 60 to 70 percent of the existing sewers are inpoor condition.

EnvIronment__ Impacts

Water Supply

29. Eoviromental impacts for the proposed water supply project activities have beenevaluated with respect to five categories: ecology, agriculture, aestetics and human interest andpublic health. These impacts occur primarily during the construction and post-constructionphases of the project.

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30. The ecological Impacts are concerned with flora and fauna along the pipelieroute, and transtlon betwee th Second Songhua River and the Shitouomen Resevoir.Vegetaton on the pipdine route wDI be impactd by constuction on the construction right ofway. Very little impact wil ocr to animal iUfe.

31. Both Fengmn and Sh ereservoirs appear to have an ample supply ofmajor nutrients, phosphorus and nitogen for biologia growth. Sh komn conts morephosphorusan Fengman. Based on field observations of the high suspended solids loadingwhich appars to be princpally colloidal days, it is probable that nuch of the phosphorus loadis inorganic and bound up in the sediments and not avaable for biological production. Basedon phosphorus avaitility, Peagman would be classified as being mesotopic ari1 Shitas eutrophic. Suspended solids loading in Fengman appears to be low and oveall water clarityfar exceeds that of Shtouloumen during the open-water season. Ihese factors suggest that thepotential for Introduction of algae from Second Songha River water into ShitoukoumenReservoir would be minimal.

32. There are nine families and 48 fish species in Fengman Reservoir, of which 42are native apd the other 6 have been introduced. The Second Songhua River has 64 species.No information was avaiable on their disbtion or relative abundace. The one exception isAcanthobrama simoni, a member of the dace cup family. Ths species is exotic to the FengmanReservoir, intoduced by accident, and now is very abundmt in the reservoir.

33. There are seven families and 46 fish species in the Yinma basin includingShitoukoumen Reservoir. Acanthobrama simoni i not among them. Early life stages of thisfish species could survive the transmission fiom Maja and become established in the reservoir.The potti exists for transfer of one or more of the 18 additional fbh species intoShitoukoumen Reservoir via the proposed transfer line. The potential for the introduction ofparasites such as protozoans, flatworms and roundworms to the ShitoukoumenReservoir fisherywas possible and probable. If this occurred, the potenal exists for losses in the Sh umenfihery. However, fish stocks in the reservoir are not native and are in fact introduced fromsocking ponds located below the dam. Iherefore, the impact of parasitc ioduction isexected to be short term (five yeas) and relatively mior.

34. Lpreys have been in the Fengman Reservoir, Second Songhua River and theYima River but were not found in the Shitoukoumen Reservoir even though it is part of theYinma River. The arctic lamprey is a fish parasite. Although'not considered as serious apotential pest as the accidental introduction of the sea lamprey to the North American GreatLakes, introduction of the arctic lamnrey to Shitoukoumen Reservoir will very likely impact thecommercial fiheries. Although not expected to have a devastating effect based on a lack ofrecords in other parts of the world cnceng significant impact on freshwater fisheries, theexact level of impact canmot be predicted. However, if the arctic lamprey were a highlysgnificant fish parasite with regard to impact on wmmercial fisheries, there would be a long anddetaied literature base concerning its impact on economically important fish species. Since thisis not the case, the potendialimpact i threfore considered to be low. Also, both rivers, theSecond Songhua River and the Ylnma River are connected at the confluence of these rivers some40 mils downstrem of the Sht Reservoir, and the absence of lampreys in thereservoir may be due to the commerciday intoduced fish.

- 88 - ANNEX lO

35. Ahe withdrawal of water from Maja will reduce the amount of water availablein the Second Songhua River for dilution and assimilation of raw wastewater from the City ofJilin. Inially 450,000 m3/d (1996) and ultimately (2020) 1,137,000 m3/d will be withdrawn forthe city of Cbangchun from this source. The ultimate withdrawal is approxnimately 10 percentof the recorded low flow (95 percent probability of occurrence). At the present time, the SecondSonghua River upstream of Jilin City is a Class 11, while downstream of ilin City a Class Vriver based on the BOD5 load (see full EA for data). Class V is the worst classification in theChinese National Standard GB3838-88. It is estimated that approximately 25 percent of thecurrent river flow under average river flow conditions ia comprised of wastewaters from JiimCity. The implementation of effective wastewater management for the City of Jilin is planned,in order to restore this river to a healthy state and to elevate its classification to a higher gradethan Class V or IV. A TOR has been prepared for the study of the overaU Songhua river waterqwity.

36. Agricultural impacts along the pipeline transmission route from Maja to the cityare considered to be minor. Loss of one crop year may occur in some areas during constructionfor which owners are well compensated. Disturbed soil along the route will selectively bereplaced in the trench in order to maintain agricultural productivity after construction has beencompleted. Loss of agricultural land at water treatment plant No. 3 will impact a few areafarmers as the total land requirement is estimated at 10 hectares. However the positive impactson the City of Changchun because of increased available water should outweigh the negativeimpact on agriculturl production (para. 3.29).

37. Aesthetic impact will be minor because construction occurs in the ruralcountryside for the most part. Water Treatment Plant No. 3 is located in the southeast extremityof the city in a sparsely populated area. Therefore, there would be no impairment in aestheticappearance subsequent to construction completion.

38. From a human interest point of view, the increase in available water supply ofgood quality will improve the standard of living and social well being of the citizens ofChangchun. Availability of water to residents who have very little water at the present time willimpact positively on personal hygiene standards which will reflect in improved public health ofthe overall community.

39. The water supply project is essential to the City of Changchun in order to sustaineconomic prosperity and to improve the stndard of living of the citizens. Both the short- andlong-term impacts resulting from environmental factors are minima! in comparison to the benefitsto be derived from providing additional water to the city in which consumption presently lagsdemand by approximately 50 percent

Wastewater Management

40. Wastewater management is a key component in the implementation of theproposed water supply project. The essential elements by which environmental impacts havebeen evaluated are ecology, health, recreation, aesthetics and agricuture. The ecological factorsconcerned are river water quality, flora and fauna.

-89- ANNEX 10

41. The Yitong, Ximkai, Yinma and Second Songhua rivers are presently pollutedbecause of the lack of wastewater treatment by Industries and cities. The City of Jilin has amajor impact on the Second Songhua River as does the City 3f Changchun.

42. The staged implementation of pollution control for the Yitong drainage area willremove from the receiving waters the majority of the waste loading contributed by the City ofChangchun. The primary water resources affected are South Lake and the Yitong River. Thesecondary water resources affected are the Yimna River and the Second Songhua River at theconfluence and downstream. Initially the Yitong interceptor from south to north will becompleted together with a primary wastewater treatment plant at a capacity of 368,000 m3/d.This will eliminate the discharge of setdleable solids to the river which has a major imract onboth the Yitong River fishery, water quality and public health. The ultimate goal for thewastewater management project is to elevate the river classification of the Yitong to Class m orH.

43. At present the Yitong River (35-390 mg/l BOD5) is biologically unproductive interms of fish, benthic organisms and other aquatic life. In most instances the assimilativecapacity of the Yitong River and its tributary, the Yinma, appear to be exceeded most of the yearfrom downstream of Changchun to its confluence with the Second Songhua River. Within thecity, South Lake is heavily impaLted by wastewater discharges and exhibits poor water quality.

44. Following the implementation of full treatment, establishing of industrial zonesand an effective industrial waste treatment program, the river eventually will still requiredredging in selected areas in order to remove toxic components such as heavy metals andorganics that have accumulated in the bottom and bankside sediments. For some time in thefuture concern will remain over the consumption of fish because of the potential for bio-accumulation in fish tissue which could pose a treat to public health. Similarly body contactrecreation is not recommended in the Yitong River or South Lake because of the concerns overpublic health due to the gross pollution level.

45. The rivers, streams, South Lak!e and other small ponds are aestheticallydispleasing from the standpoint of appearance and odor. Wastewater outfalls currently dischargedirectly to these waters without any form of pretreatment.

46. Although the health effects of utilizing Yitong River water for irrigation are notknown precisely, they can be inferred based on water quality information reviewed to date.During May, when the irrigation season commences the Yitong River carries an enormousquantity of industrial and domestic contamirants. The withdrawal of these waters for irrigationuse poses a high risk for the transfer of potentially toxic materials onto land and subsequentlyinto the food chain.

47. The program proposed in this project for environmental protection in the first-stage investment program (1991-95) is part of a realilic long-term strategic plan forenvironmental remediation. Full implementation in the context of China's development is notlikely to succeed within a decade. Many other far-reaching measures and culture changes willneed to take place gradually. The program proposed includes the formation of a WastewaterCompany to address effective management, operation and control of the municipal and industrialwastewaters generated within the City of Changchun. Other measures proposed include (a) theconstruction of the Yitong interceptor and North Suburb Wastewater Treatnent Plant (WWTP),

- 9 - ANNEIC

(b) mplemenaon of a ser use by-law and relao to regulat and contol the dscrgof industria ffluens to the seweage collection system and wat courses, (c) the WastewaerCompany would handle appr and licensing of all industriial efflut discharges in the sixcountes administered by the City of Changchun, (d) revitalization of Changchun EironmentalPtection Bureau to underta compliance monioring of industrial effluents not serviced by thesewerage collection system, (e) the formation of indusrial parks and IndustW treatmet centersfor small and medium size industry widtin the parka, (f) the impl tin of a toxic andbazadous waste study to address bandling, treatment and disposal of toxic and hazadous wast,and (g) to promote ambient water quality management of water bodies and rivers by the Song-Liao Water Basin Admin in i order to assess perfrmance of environmental protectionmeasures implemented.

48. Althtough it is recognized that a primary wstewat treatment (30-35 percentBOD removal; 50 percent SS removal) will not completely correct the pollution problems in thereceiving waters downstream from Changchun, it will minimize the negative impacts. It is theintention of the local authority that after a few years of operation of the primary wastwaerplant, a secondary biological wastewater treatment facilities will be constructed to fiuther treatthe wastewaters from the city. This staged approach seems to be a reasonable way to solve thecity's wastewater problem because it will mimize the financial burden for the city and alsoobtaining necessary experiences on how to operate and manage a wastewater treatment network.However, since the second stage of the wastwater management is beyond the scope of thiscurnt, Xk. detailed EA was prepared. It is likely that this second stage wiUl be financed bybilateral donors.

Enifronmental Management Plan

49. The proposed activities during the preconstruction, construction and operationalphases result in a number of impacts on environment components. An appropriateenvironmental management plan including a "resettlement action plan' has been Identified forthe mitigation of these potential adverse impacts. The major recommendations are summarizedin Table 1.

Relocation and Resettlement

50. Chinese government policy on resettlement is, covered under national andpovincial laws and regulations. The policy provides for. social and economic reestablishntof communities, with living standards the same or better; resettlement within the same county,and if possible, the same township; resumption of original employment or taining foralternatives; compensation for property; and reconstruction of public facilities. It was estimatedthat a total of 345.15 hectares of land will be affected because of this project. Of this, 55,25hectares are permanent and 289.9 hectares are temporary. About 850 people are affected by theproject, about 550 persons will be resetled and about 300 persons will be losing famland. Ihetotal cost is estimated t- bk Y 54 million ($10 million). A OResettlement Action Plan" has beenprepared by the Changchun City goveent (Appendix K in the full EIA) to address this issue.In-depth consultation with the affected people has taken place and the resettlement andcompenlsaton appears to be well done.

*1

DY' a.}iiiIit( 7W

a'ifti.|9I['IoE$4

-92- AN=

Table 1: MTATION/ENVIOnMo AL MANAGEMN PLAN SUMMARY

PROJECT PASE ACTIVIT VROTL NxGATION MEASURES BY CWSC uMD/ORPARAMSTER OF CONCEON CSC AID HEIR CONTRACTORS

1. WATER SUPPLY

1 1 Preconstruct 4 on Land Acquisition 0 Reimburse and reemploy farmers forluA acquired for acces roads andpUmp stations ad water treatmtplant No. 3.

* Relocate farmers displaced by WaterTreatment Plant No. 3 to New Parmsite.

1.2 Construction Change in Land Morphology and * No cbange along pipeliae route.Aesthetics Excavated area to be restored to

original conditions.* Changes at Treatment Plant and

Pumping Station sites wll1 betemporary. Restore disturbed areaswith soft landscaping (traes,shrubs and grass) around buildings.

Flora and Fauna * Restore pipeline transmission routeto original grade and plant treesand grass to restore surface.

* Construct betms perpendicular tosloped surface to minimize soilerosion.

Dust/Nolse/Traffic Congestion/ * Apply water and dust retardingHealth Hazard agents to road surface and restrict

speed of vebicles.o Provide traffic control persoanel

at coastruction sites to regulateflow of traffic.

* Use mufflers on all engine-drivenvehicles.

* Regulate hours of work.

Fisheries * Construct coffer dam at Maja tocontain suspended solids in waterto construction zone.

Change In Land Use/Disruption * Restore 6arface of excavatedof Agricultural/Loss of Material to original state.Natural Tratla Selective placement of soil.

* Reimburse farmers for loss ofproduction during constructionperiod.

* Restore wildlands to natural stateas close as possible along pipelineroute.

1.3 Post- Alteration of Second Songhua * Construct intake to minimize anyConstruction River Flow Regime--Less change in flow pattern at NajaOperation Dilution Water Zn Second site.

Songhua River Below Jilin City * Implement effective wastewatermanagement proposed for Cbangchun(1991-95) to miuniize pollutioload for asimilation.

* romte effective wastewaterumnagement In Jilin City to reduceimpact on river between Jilln andthe confluence of Songhua/YinmaRivers (Jilin province and city).

-93- ANNEX Q1

PROJECT PHASE ACTIVITIERVlRO MITIGATION MEASURES BY CWSC ANDIORPARAMETER Of CONCERN CSC AMD THIR CONTRACTORS

Increased Water Supply to * No mitigation required.Changchun--oc"I Vell4eiz/1Improvement In Living Standard

Reduced Nature Vegetatio * Plant trees and graos to re-Growth on Pipellne Route vegetate the disturbed areas.

Intrabasin Transfer of Aquatic * Withdrawal of water from Fengman atSpecies mid-depth. Probability for algae

transfer is low because bothShitoukoum.n/Fengnan have snmilaralgal specles.

No mitigation necessary--continuewater withdrawal at Fengman at samedepth.

0 Lamprey/fish transfer control atBaja Intake If required (utilizingelectromechanical barriers).

Sludge Generation at Water * Dewatering of sludge by gravity/Teatment Plant mechanical equipment. Disposal of

usutral pH supenataut to farmland.

ncreased Availability of * go mitigation required.Saleable Water to Consumers;increased IndustrialProductivityt CustomSatisfaction; Improved WaterQuality; Improved DistributionSystem Pressures

Watershed Protection * Implement completion of 100 mbuffer zones around reservoirs andlakes and 50 m buffer zone on eachside of river/stream and dischargecontrols (Jilin and ChangchunReservoir Management Companies).

2 gftast.artHana_eat

2.1 Preconstruction Land Acquisition * Reimburse farmers for land used forNorth Suburb WWTP.

2.2 Construction Aesthetics * Restore disturbed areas with softlandscaping (trees, shrubs, grass)upon completion of construction asrequired.

Dust/Noiae/Traffic * Apply water and dust regardingCongestion/Health Hazard agents to road surface and restrict

speed of vehicles.* Provide traffic control peraonnelat construction sites to regulateflow of traffic.

* Use mufflers on machines andequipment.

* Regulate hours of work.

Change in Land Use--Loss of * Reimburse farmers for land used forAgricultural Income. North Suburb WWTP.

* Relocate farmers to new farm sites.

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PROJRCT PU:SS ACTMTZI IROMOMMlaTIGATIGE IASUIES I (MC AND/ORPARS Of CONCM R C8C AND TO OTATR

2.3 Pot- Improd Vater ^ Costrctio of itoug "verConstruCtioo QUltyl/aned Rereeati Interceptor and Worth SuburbOperation Capabiity/Ehaned Irr toPriy v .

Capability/1edue l ealth * plmet sewer use by-law andRisk/Reducton In Wast regulatlon.Loadlng to YTtong River/Tiame * Construct Iadustrial park andRiver/Second Soughua River. cooperative wstewater treatment

center (Changohun munIcipality).* Implment study to prowide strategy

for toxic wast bandlag,treatmsentand disposal (CangohunwAnicipality).

* Promote pollutio preventionconcept (Changchua municipality andCSC).

REn=nce Capability for Treated * Locate industruil park near Sorth8ffluent Rouse Suburb WPT (Changehun

mniecipallty).

Generation of Sludge Requlring * Dewater digested sludgeDisposal * Disposal to land, monitor for heavy

metals and other prioritypollutants.

* Establish guidelines for sludgedisposal to land.

Potential for Odor Genaration * Monitor for hydrogen sulfidecompnts, wind speed oandirection.

o Impl^em odor control facilitieIf odor levels offensive to farmersand housebolds In vicinity ofplant.

- 95 -ANNEX 11

TOXIC/HAZARDOUS WASTE MANAGEMENT ANINDUSTRIAL PARK STUDES:

DRAFT TERMS OF REFERENCE

Backrud

1. Changchun Municipality, located in the northeast Province of Jiin, consists ofthe City of Changchun, which is the seat of the Provincial govement, and five rural counties.The Municipality has an area of 18,880 ka2. It has a population of 5.8 mfllion, of which 2.0mmion are urban. The area has a temperate, continental monsoonal climate, with cold, longwiters, and warm, short, rainy summers. Mean annual precipitation ranges from 400 to1,000 mm; the average amual precipitation is 700 mm. Jilin is one of the breadbaskets ofChina. Agriculture is well-developed with large parts of farmland served by irrigation systems,incorporatng several regulating and flood control dams. Changchun is also an industrial citywith ominanl metal-worling facories and has a relatively large number of highereducation establishments. Currently, over 3,400 factories and enterprises are spread over thecity, including tractor, bicycle, railcar and instrument factories.

2. Changchun Municipality reported that cwurenty the city generates about5,000 tons per year cyanide from the No. 5 Chemical Plant, about 40,000 tons per year of boronsludge from No. 1 Chemical Plant and approximately 5-10 tons per year of nitrobenzene etherand aminobenzene ether from Changchun Pharmaceutical Factory. Landfill and incineration arebeing used to dispose these toxic/hazardous wastes.

3. It is ticipated that after the completion of the Changchun Water Supply andEnvironmental Project, new industries and factories will be established and additionaltoxiclhazardous wastes will be generated.

4. Changchun Municipality recently commissioned the Changchun Urban ResearchInsute to conduct a Changchun City Industrial Hazardous Wastes Management and DisposalSite Selection and Feasibility Study. The Research Institute recommended Sandao, a locationabout 6 kilometers east to the city with a disposal capacity of 315,000 cubic meters, to be thetoxic/hazardous wastes disposal site.

5. angchun Municipality also commissioned the Changchun Planing DesignInstie to conduct a Changchun Area Relocation Plan for Industries Generating HazardousWastes. That study recommended relocation of electroplating, metallurgy, cement, tanning andchemical industries to a common designated location outside the urban area. The recommendedlocation for these industries is in the north corner of the East Suburb indusil park, east of theOuter Ring Highway and north of Shilibao. The proposed industrial park comprises

-96- A X 11

79.5 hectares, which is sufficient area for the existing 30 factories and allows room for fiutureexpansion.

6. There are many uncertainties concerning the accuracy of the above two studies,including: (a) only two sites were selected for comparison for the toxic/hazardous wastesdisposal study; and (b) the classification of toxic/hazardous wastes were not well defined-onlythree types of wastes, cyanide, boron sludge and nitrobenzene ether and aminobenzene, wereconsidered in the study while other pollution generating industries such as electropladng,metallurgy, cement, tanning and chemical industries were not included. During appraisal of theChangchun Water Supply and Envionmental Project it was determined that a comp--.hensiveToxic/Hazard Wastes Management and Industrial Park Study should be carried out.

Objectives

7. The objectives of the study are to:

(a) study the quality and quantity of existing and potential industrial toxic/hazardouswastes in Changchun;

(b) formulate a toxic/hazardous waste treatment and disposal system, includingcollection, segregation, transport, and disposal of the wastes;

(c) prepare a feasibility design and implementation program of the toxic andhazardous waste treatment and disposal system;

(d) describe and define roles for the governmental agencies and industrial bureausand enterprises in the establishment and operation of the toxic/hazardous wastereatment and disposal system;

(e) describe the organization responsible for the management of the toxic/hazardouswaste treatment and disposal system and the definition of responsibilities ofparties within that organization;

(t) establish an appropriate training program for management staff of the toxic/hazardous waste treatment and disposal system and for government staffresponsible for the supervision of the system; and,

(g) study the feasibility of creating a "special industrial/economic zone."

Scope of Work

8. The scope of work will include the following:

(a) Hazardous Wastes in Changchun

(i) survey existing and predict future industries in Changchun;

(ii) obtain information on current and predict future toxic/hazardous wastesgeneration in Changchun;

97. AN 11

(ill) study current practee of toxic/hazardous wastes management indudingsite selection and means and routes of transportation in Changchun.Reommmend ways t improve these practices;

(iv) sudy laws, regulations and the govertnent agencies responsible fortoxic/hazardolus wastes management. Recommend amendmenu oradditional laws and regulations as well as the organization, fnction andprocedures of the toxic/hzadous wastes management agency;

(v) develop comuter software and data management systems to manage thetoxic/hazardous wastes in Changchun; and,

(vi) develop and conduct short courses and workshops to train the staffdealing with toxichazardous wastes mnagement.

(b) Industria Park and "Special Development/Economic Zone"

(i) conduct alternative sites study and recommend the best site for theindustrksa park;

(ii) conduct ecncomic analysis and feasibility study including the policies,laws, and regulations on the establishment of a "special developmert/economic zone"; and,

(ii) ff feasible, recommend best approac'hes to create the "specialdevelopment/economic zone";

Work Organiptlon

9. The work would be carried in teams composed of staff from ChangchunMunicipality, a local consulting company and the international consultants selected for thiscontrcut. It is intended that the local team members wZi gain experience from on-the-jobtraining by workdng with the international experts, as well as from overseas and in-countrytraining coures, which will be funded under the consultants' contract. The proposed trainingcourses and schedules will be specified by the consultants in their proposal. The consuttants wiltdesgnate staff from their organization who wiU be their represenative for each of the aboveproposed study components.

10. The role and responsibilities of the international consultants are to:

(a) assist the local staff to develop and manage their various activities;

(b) assist in preparing and revising work programs;

(c) provide advice on assessment and survey methodologies;

(d) review and appraise the outputs of the various study teams;

(e) provide outline and framework of interim and final reports;

'98- ANNIX11

Mt prepar summary report In Englsh and

() prepare ining matial and carry ou overseas and incounty iig

Proposed Work Schedule

11. I he overall ime required to complete the varis sui and swve is xpectdto be one year. The osuants sh prepare a detaied shdue with ther proposia, afterdscsion with the counterpart tea.

Rpw

12. -be consuls shall pr e an inception report aer two months and midemprogress port after six months. Draft linal and flnal rports shall be submitted at the end ofthe study period. Ihe Ine iona consultants wil prpre wumY prges repoI Englishafter six months for submiion to Changhu Municty and IDA. At the completion of thestudy the intea onsultat wil prepare a Final Report executv summary containing theman findin and conclusions of the study and recomme for follow-up acdons.

Budget

13. The cost of the proposd study is d to be $800,000.

99 ANM 12

MANAGEMENT ANID OPERATIONAL SUPPORT FORCHANGCHUN WATER SUPPLY COMPANY:

DRAFE DESCRIPTON

1. There is a rewgnized need to manage in an optmum way te scarce waotsuply available for Cbanghu City ad to operat at a minimum cost the highly negyo tive Insalflations of the Changcm Wat Supply Compay (CWSC), while providig

an efficient, leastco serice to the people and industry of Changchun. With Increasing watersarcity and having to transport waer over long disancs, improvemn of technology andefficiency Is necesy to provide a service at the lowest cost both in tem of energy and money.

2. Water loss and energy wastage in water supply comanies is due to a highycomplex number of fctors. System w losses ar often given as the main indicator ofeffiency in operaons. However, ner losses are not only associated with water losses butao with ate design, poor-alty matis and conruction pracdees, andInapproate oprtg pmcedure for pps, teatment plan and distrbn su stt-all ofwhich result in higher ta neesa energy cost For example, poor and lack ofa railitation program often rests in corrosion of water mis cau incrased frtion andreWting In higher energy cost. The process of opersating a wat supply system efficienly startwith desip and is a continous process of diligent management of construction, operaons and

Modern computeized management of adminIsae and commercial opeaois a basic necessity. Equally, water companies must contiuosy plan for the future, to meetth ip osed by the grwth of an industrialized city such as Changchun, whichrequires high quality utility sevices for its Industrial development well as for Is populton.

3. During the recent decades, as cities have grwn, manageme and techologyof agendcies providing municipal services have become more sophisticate. As a *asult,opeaiona and financial management, and many differe technologies used in watr supplycompanies have become specialties In themselves. What used to be a relatively simple sernieof providing water now demands well educated and tained people with many differet andhighly speciized skills. Those specialists should aso be trin sotat they understand andtake account of the cost implications of ther actions.

4. Woddwide, th urban water utility sector ffers from resice to change andadop of modem _manament practices and sat-of-the-a techology. However, with thegrowing peeptn of the problems of watr shoa, water polbion and related healthhazards, tee is a growing reognition of the need for change. The cultural cbhn fm abasicaly rura-*iented operaon hito a modern water utility for a large idustrial city i oftena difficult undaking. Iherehre, a major goal of tis support palcage is to achieve atudo

- 100 - 1i

changes of both the utility staff and mmuiipal managers. Urban water supply in par ar hassuffre fom the Intevenons in the daily opeaons of utilides by local govenment andpoliticians, uig water supply and sewage operationn for emplome craion and patonedeals. Efficient, cost_efetve utility operation cnt condone such practices.

Objetves

5. The main objective of this proposed Technical Assistance (A) is to upgradeth managemet planning, operaton and m tenance capabilities of CWSC to eonsur it iSopaed in the most efficent, cost-effective manner possible, using consultants speciized inthe management, commercial and finacial adminisaon, and operation and mantenance ofwaer spply seces.

6. Th following specific objecdves are:

(a) Trang

to) Leadehip Traning. Select a smal group (3 to 5 people) to work inan overseas location to learn advanced management skils. The trainingwould include proper organization of a water utility, motivationaltecique, financial management, public relations, etc. The traingwould last about six months. Tbis task would, in effect, train themagers and trainers of the CWSC.

(3) Operator Trainig. Establish job classifications and certificationprogram. Provide a training program so that water system opators canadvance to higher levels of sks and responsibilities.

(b) Water Management

io Optimize Water Resources. Develop a program that will optimie theuse of wat resources. The program should meter the water productionas well total customer metering, together with a comprehensive approachto reduce water losses and use.

(ii) Water Diribution. Review of the present distribution faciliies andprovide a system operations and maintenace program, with the purposeto improve the quality of the services provision of providing highqualitywar (pH contol and particulate matter) at adequate pressures,responsiveness to customers demands and complaints, distibutionsystem maitenane. Develop a progrm to increase awareness of theimportnce of efficient wat use, which incudes water qaity, waterdistibution material standards and m nce practices, pntinusmonitoring of water losses and unaccound for water, plumbingstandards for interior plumbing and water efficient equipment, both forindustry an domestic use. Particular attention should be given to theupgrading of the dirict offices, which are the direct contact point wihthe customers.

-101- ANNEZ 12

(c) Energ Management. Review all water produeton aidities and propose andguide implementation of operaions and manteace stregies that wil optimizetbe use of the water resources, minmize the use of energy and reduce cost. Inpartilar the use of high cost produco facilities of the Maya-ShtoukoumenTransmisin fcilities shoud be opt4mized and coolled. Wator treatrlant opeaions should be optimized and watr quAty (mate meing) adquality control (corrosion and pH control) improved.

(d) Flnandal Management and Comme l (Bilng and Collion) Sstem.Review the company's requirements, provide a plan and guide theimplementation of this plan, to graually computerize the company's financialand commercial accounting systems. This is a particular opportune tim asChina is adopting commercial accounting systems. The TA should camine thepresent Chinese system and, taking account of this initiative, prepare a computersystem design initially based on desktop computers. I should provide a plan tocomputerize fidly within a two year peried the commercial system Opeaonalcost control and stock accoundng is ancidier priority Item.

(e) Mainteaance System. Develop a computerized sysem for preventadvemaintenance. A routine should be developed for cleaning water lines, servicingpumps, pressure testing, etc. Data wi}l be recorded to determim, down time andto make improvements for better water service.

Exection of the Technical Assistance

7. Assistance would be provided in the form of a small core team which wouldmake periodic (about six-month intervals) visits. The initW visit would be about two montis,

rng which the core team would work closely with CWSC management and agree on an iditiassessment and set out a flexible implementaton plan with ded TORs for intervins ofspecialists. These speciaists would have the appropriate expertise and tensive experience toprovide operationa and management advice in their particular field of expertise. Progress wouldbe reviewed annually in cooperation with IDA and the implementation plan would be adaptedto changing circumstances and progress made to date. The whole process of TA and insttutonlchange is esdmated to take place over the five-year project Implementtion per'od (1993-98),including the initial phase of commissioning the new facilities

8. The management of CWSC has committed itself to change the aizationalstructure of CWSC to a new structure better adapted to the needs of the future. The TA wouldassist in developing the job descriptions for the new institutonal argement. CWSC basagreed with IDA on an implementation of the new instituional arrangements by December 31,1994.

9. It is intended that CWSC, including its training facilities, will serve both as anexample and as a training ground for the Northeast of China. Participation of the China WaterSupply Associadon in the above proposed TA is also recommended.

-102- ANN1X

10. Th emate minimum labor equiment for the TA am:.

Labor. manogatbgIn China 1sa Offic. Total

23 1 24Watar E.na.ment 11 1 12tnrey Managmet S 1 6

Financial mnam .n.nt 17 1 18v .nt¢nce system 5 1 6

Total 61 66

- 103- EX 12

MANAGEMENT AND O-PF4TIONAL SUPRT FORCHANGCHUN SEWkAGE COMPANY:

DRAFT TERMS OF REFERENCE

ntrodueion

1. A simdlar Techical Assistance program as for the Water Supply Companywill be needed for the recently fomd Changwn Sewerage Company (CSC), which s anewly created compay. Patiar attenton shuld be gien to design, conoucdon andO&M of sewerap collectn systems becas excessive infiltrtion result In additonalenergy costs at pumping statin and at the treamnt plant. The control of poluto, inpaicular domestc and industri poluion, is the principle purpose of CSC. Water is scaceand is brought at high cost to Changcu As a result, (a) water use is a cntint and Ob)the absorpiv cacity of the its water courses is very limited. Watet downsteam ofChang8iun is reed by agriculture durng the crop growth peiods ad, therefre, toxicwaste disosa in the public waterus dws d be controlled severely.

2. The purpose of his TA is ta at the end of the project Imdlementation CSC,together widi the Changchun Ptection Bureau (CEPB) will be able to:(a) operate ad maintan the Changchun sewage collection and transmission system,(b) opae the nwly conshucted pdmay treatnt plant and monitor its peform ane inview of the design of the secondary reaent stage, and (c) together wih CEPB setdischarge lim, grant dsg permi and effectvely control the water qualy of theindustrial disrges inothe sewerag system.

Objectves

3. The main objective of this proposed Techical Assistance (A) I to upgradethe operaon and m_e capabilities of the CSC to ensure it is opeaed in the motefficien, cost-effecilve mamer possible, using consultants specialized in the management,fnanci administtio, and opeation and maitnc of muncipal wastewater managementsystem.

4. Ihe following specific objectives are:

(a) Industa waste dsdargs, permits and qualty contol of pointdisdwggw

(i) Deveop a data base to identify all industri discbarges. ITis willidentify the type of idustry, c s of waste dicharge, toxiccoi s, etc.

-104 - ANE 2

(i) Develop criteria for pretreatment of wastes prior to discharge into thepublic sewerage system. Permits would be issued for discharges.

(iii) Develop a munitoring system to randomly sample the discharges forcompliance.

(iv) Develop laboratory capability to test for industral waste dischargecharacteristics. Training aministars and laboratory technicians isan integral part. This is a joint venture of CSC and CEPB.

(b) Sewage collection system

(i) A program should be drafted and guidance provided on ksimplementation to modernize maineance and rehabilitation of thesewage collection and transmission system. Particular attentionshould be paid to groundwater infiltration in view of the addedexpense of pumping. Modem inspecdon, repair and rehabilitationtechnology should gradually be introduced.

(ii) Develop a program to monitor dry and wet weather flows.

(iii) Detailed mapping of the existing system is a priority item in view ofthe large extensions to be added over the next decade and thenecessary rehabilitation of the sewage system. A graphic informationsystem (GIS) should be developed to map the exising system.

(c) Sewage Treatment Plant. Sewage treatment plant operation is asophisticated process, more so than water tement plant operations becaseof the highly variable flow and quality of the sewage, which easily upset thebacteriological processes of a modern sewage treatment plant.

(Q) Prepare an operations and mnance (O&M) manual for the plant.Develop an organization chart, job classifications, and a certificationprogram for the operators.

(Hi) Train a core staff to operate the treatment plant. Develop anorganization chart, job classifications, and a certification program forthe operators.

(iii) Develop a monitoring program to check the efficiency of thetreatment process. Included would be:

* Influent BOD, suspended solids, pH, tempature* Sediment tank BOD and suspended solids removal* Sludge production* Effluent BOD and suspended solids, pH* Digester performance

-105 - ANNEX 12

(d) Financial management system. Review the company's requirements,provide a plan and guide the implementation to gradually computerize thecompany's financal system. This Is a particular opportune time as China isshifting to commercial accounting systems. The TA should examine thepresent Chinese system and tacing account of this shift, prepare a computersystems design initially based on desktop computers. Operational cost controland stock acounting is a priority item.

(e) Personnel management and training. Review present practices andrecommend improvement of the present system. Particularly important is theprovision of assistance in setting up a training program and design of trainingfacilities for the company staff which will go hand in hand with the changesresulting from the above-mentioned specific actions.

Execution of the Techical Assistance

5. The assistance would be provided in the form of a small core team whichwould make periodic (about six-month intervals) visits. The initial visit would be about twomonths, during which the core team would work closely with CSC management and agree onan initial assessment and set out a flexible implementation plan with detailed TORs forinterventions by specialists. These specialists would have the appropriate expertise andextensive experience to provide operational and management advice in their particular field ofexpertise. Progress would be reviewed annually in cooperation with IDA and themplementation plan would be adapted to changing circumstances and progress made to date.

The whole process of TA and change is estimated to take place over the five-year projectimplementation period (1993-98), including the initial phase of commissioning the newfacilities

6. The management of CSC has committed itself to adopt an organizationalstructure adapted to the needs of the operations. The TA would develop job descriptions forthis institutional arrangement.

7. The estimated minimum labor requirements for the TA are:

Labor.' man-monthsIn China Home Office Total

Industrial Waste Discharge 5 1 6Sewage Collection System 5 1 6Sewage Treatment Plant 3 1 4Financial Management 3 1 4Personnel Management & Training 8 1 9

Total 24 5 29

CHINA

CHANGCHUN WATER SUPPLY AND ENVIRONMENTAL PROJECTEconomic Rae of Retum

Water supply

TOTAL INCREMENTAL INDUSTRY TOTAL TOTAL TOTAL TOTALCOSTS COSTS WATER SOLD WILLINGNESS TO PAY VALUE BENEFIT NET NET NET

Year -w- ADDED WATER IENEFIT BENET BENEFITConst. Land/ Op. & Resident Inetn Resident Iinslt BENEFIT WATE SEWERAGE PROJECT

Resetmt Maint. Comnerm. Commetc.(mHiion yuan) (Tmilion cu.m.) (milUion yuan) (milln N)

1993 136.60 39.40 175.00 -17.00 -16.30 -191.301994 444.80 444.80 -444.80 -61.40 -606201996 318.80 318.80 -318.80 -6.80 -377.I0im 8.800 86.8 -6.80 -72.70 -158.60 A1997 1.11 1.11 49.28 23.3 19.71 18.69 138.76 176.15 174.04 63.76 237.701993 1.11 1.11 27.3 34.31 10.6 27A6 130.76 176.16 174.04 63.75 287.791909 1.11 1.11 27.38 34.31 10.95 27.46 138.76 176.16 174.04 68.76 287.792000 1.11 1.11 27.38 34.31 10.96 27.46 136.75 176.16 174.04 63.5 237.792001 1.11 1.11 27.38 34.31 1o0s. 27.46 136.75 175.16 174.04 63.75 287.792002 1.11 1.11 27.38 4.31 1O.9S 27.46 138.76 176.16 174.04 63.75 237.792003 1.11 1.11 27.38 34.31 1O.0S 27.46 136.75 176.16 174.04 63.76 287.702004 1.11 1.11 27.38 34.31 10.06 .46 136.76 176.16 174.04 63.75 287.70200 1.11 1.11 27.38 34.31 10.06 27.46 1t8.75 175.15 174.04 6876 287.702006 1.11 1.11 273s 34.1 10.s 27.46 136.75 176.15 174.04 676 237.702007 1.11 1.11 27.38 34.31 1 2O7S .A6 136.75 175.16 174.04 68.76 287.792008 1.11 1.11 2738 34.1 16S 27.46 136.76 176.16 174.04 6376 287.702009 1.11 1.11 27.3 34.31 10.96 27.46 138.75 176.15 174.04 6L.7 2S7.792010 1.11 1.11 27.8 34.31 10.t6 27.46 136.75 176.16 174.04 6375 287.7s2011 1.11 1.11 27.38 431 106S 97.46 130.76 5 17.16 114.04 6&7S 2a7.79

1111% 226% 13.3.. . E~~~~~~~~

CHINACHANCCHUN WATER SUPPLY nd ENVRONMETAL PROJECT

Eoonoc Rate of Retunm ad Marginal CostWaswaer Treatment (rs as of '

CoSrs TOTAL INCREMENTAL BENtEFrT TOTAL TOTAL-------------------------- COSTS SERVCES SOLD ------------------ BENEFIT NEr

Year Const Landl Op.8 --- ----------- Resident Industryl BENEFITReseImt Maint Resident Industry/ Revenues Other

Other Revenues(million yuan) (million cu.m.) (million yuan) (million yuan)

1993 1.60 14.70 16.30 -16.301994 61.40 61.40 -61.401995 58.30 58.30 -58.301996 72.70 72.70 -72.701997 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.751998 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.751999 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752000 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.7520G1 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752002 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752003 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752004 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752005 1.90 1.90 90.44 77.04 27.13 3852 65.65 63.752006 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752007 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752008 1.90 1.90 90.44 77.04 27.13 38.52 865.5 63.752009 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.752010 1.90 1.90 90.44 77.04 27.13 3852 65.65 63.752011 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75

22.8%

-108 - ANNEX 14

SELECTED DOCUIENTS AND DATAAVAILABLE IN TME PROJECT FILE

1. Feasibility Study of the Changchun Water Supply Project for Drawing Water DrawingWater from River Songhua into Chargchun, by China Northeast Municipal EngineeringDesign Institute and the Jilin Water Conservancy Surveying Design institte,Changchun, February 1989.

2. Water Supply and Wastewater Management Feasibility Study, City of Changchut (sevenvolumes), by UMA Consultants, Calgary, Canada, November 1991.

3. Translation of "Approval of Changchun Water Supply and Environment Project" (FirstStage) Feasibility Study, State Planning Commission, Doc. No. (1192)584, May 11,1992.

4. Summary in English of 'Approval of Feasibility Study Report of Changchun WaterSupply Project," Ministry of Water Resources, Doc. No. 1991-61, December 13, 1991.

5. Summary in English of "Approval of Feasibility Study of Changchun Water Supply andEnvironmental Project," Ministry of Construction, Doc. No. 1992, 1992, April 22,1992.

6. Summary in English of "Approval of Environmental Impact Statement of ChangchunWater Supply Project" by State Environment Protection Bureau, Doc. No. 1991-280,August 5, 1991.

7. Summary in English of "Location Selection and Preliminary Feasibility Study Report onIndustrial Hazardous Waste Disposal" by Urban Research Institute of Changchun,October 7, 1991.

8. Summary in English of "Relocation Plan for Industries Generating Pollution* byChangchun Planning Design Institute, September 27, 1991.

9. Summary in English of"Measures for improvement of Wastewater Treatment Plant inNo. 1 Auto Factory," February 22, 1992.

10. List of documents about water conservation.

11. Preliminary Approval of Land Acquisition Plan, by Construction Land Department,Land Management Bureau of Jilin Province.

-109- ANEX 14

12. Engineering Report on Raw Water Transmission Line (Volumes I & II) (the two-volumereport, in both Chinese and English, was prepared by Jilin Water Resource &Hydroelectric Survey & Design Institute).

13. Calculations of ?umping Stations of Raw Water Transmission Line (Appendix 1) (theeight-page Appendix 1, in English, was prepared by Jilin Water Resource &Hydroelectric Survey & Design Institute).

14. Preliminary flesign Engineerig Report on Changchun Urban Water Supply. (the reportwas prepared by China Northeast Engineering Design Institute and is in English).

15. Preliminary Design Engineering Report of Proposed Primary Wastewater TreatmentPlant at the Northern Suburb (the report was prepared by China Northeast EngineeringDesign Institute and is in both English and Chinese).

16. Preliminary Design Engineering Report of Proposed Sewage Interceptor in Changchun(The report was prepared by Changchun Survey & Research Institate and it is in bo&tEnglish and Chinese).

MAP SECTION

_ _~~~~~

CHINA 1

CHANGCHUN WATER SUPPLY AND ENVIRONMENTAL PROJECTPROJECT PPELINESGENERAL LAYOUT RU

'-, I ~~~~PROJEaT _ MAORVR MM FWED

TRUNK SEWERS

/PUMING STATIONS P.S. WATERSHEDBOUNDARIES

I WATER TREATMENT PlANT C' LAKES/RESEVOARS AND DAMS

I * SEWAGE TREATMENT PLANT URBAN AREAS

|O INDUSTRIAL PARKC SELECED ROADS

A HAzoS WASTElANDFlLE SITE YPREFECURE BOUNDAR ,* j

| EXSFING FACILITIES * -. I*

TO~~~~~~~

HANYCHU~~~~~~~~~~~~~~~~~~~~~~~~HAXP.S. Shi~ ~~~~~~~~? 1IJIJ3

X'inaliehan~~~~~~~~~~~~~~~~~~

TO hi-mo-w to~~~~~~~~~~~

IBRD 24064

ThEATMEWT PLANT(2200 mT/d) To

TO

A J&~~~~~~~~~~~~~~~~~~~A

__ No,3 ~~SATSOCHN

a~mdisar

CHANGCHUN WATER SUPPLY AND%*~~*%.~~* ~ ENVIRONMENTAL PROJECT

CHANGCH-UN CITY WATER SUPPLY FACILITIES~~~~~" ~~~~~~~WATER SUPPLY -. Rocds

Existing Proposed Rixlj~ ~; -, ;, - Aoin R"ws . Crnols

bZ, ib@,&e Pumping Station

Treatmet Plant Bitu ra

KJLOMETERS Bitu ro

0 1 2 3 4

.SEPTEMBER 1992

IBRD 24114_NORT SUBUR8S

W Sle AGE TREATMENTP PL

QUNyI STATON

TO

Am

4r-~~~~~~~~~~~~~~~~~5

TO~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~T

_______ CHANGCHUN WATER SUPPLY ANDvt, RuSt S 38ENVIRONMENTAL PROJECT

CHANGCHUN CITY SEWERAGE FACIUTIESSEWERAGE FACILTES - RoadsExisang Prpos ed Railrods

XPpnS" t Rives or Canals

png St~~~an Parks

ftU t ............... . ... U rea.ent Plant Buit-up AreasBeing Constructedoutsi-de the Prnjedt

K,LOMETERS

o -°l g1 2 3

SEPMBER 1992