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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: {PAD1674}
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
PROJECT APPRAISAL DOCUMENT
ON A
PROPOSED LOAN
IN THE AMOUNT OF US$300 MILLION
TO THE
PEOPLE’S REPUBLIC OF CHINA
FOR A
LUSHAN EARTHQUAKE RECONSTRUCTION AND RISK REDUCTION PROJECT
September 20, 2016
Social, Urban, Rural & Resilience Global Practice
East Asia and Pacific Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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CURRENCY EQUIVALENTS
(Exchange Rate Effective, April 25, 2016)
Currency Unit = Renminbi (RMB)
RMB 6.5 = US$1
US$0.15 = RMB1
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
ADB
CEA
DA
Asian Development Bank
Cost Effectiveness Analysis
Designated account
DRM Disaster risk management
EA
EIA
EIRR
Environmental Assessment
Environmental Impact Assessment
Economic Internal Rate of Return
EMP Environmental Management Plan
FSR Feasibility Study Report
GDP
GRS
Gross Domestic Product
Grievance Redress Service
IBRD International Bank for Reconstruction and Development
ISMEP
MLG
MOF
Istanbul Seismic Risk Mitigation and Emergency Preparedness Project
Municipal Leading Group
Ministry of Finance
NDRC
NSRA
O&M
PIA
PIU
PLG
National Development and Reform Commission
Needs and System Requirements Assessment
Operations and Maintenance
Project Implementation Agency
Project Implementation Unit
Project Leading Group
PPMO
RPF
Provincial Project Management Office
Resettlement Policy Framework
RP Resettlement Plan
SA
SPDRC
SPFD
SPTD
SPDHUC
UPPMO
TPPMO
WERP
Social Assessment
Sichuan Provincial Development and Reform Commission
Sichuan Provincial Finance Department
Sichuan Provincial Transport Department
Sichuan Provincial Department of Housing and Urban Construction
Sichuan Provincial Urban Environment Project Management Office
Sichuan Provincial Transportation Department Highway Bureau
Wenchuan Earthquake Reconstruction Project
Regional Vice President: Victoria Kwakwa, EAPVP
Country Director: Bert Hofman, EACCF
Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez, GSURR
Practice Manager: Abhas K. Jha, GSURR
Task Team Leader: Madhu Raghunath, and Ji You, GSURR
PEOPLE’S REPUBLIC OF CHINA
Lushan Earthquake Reconstruction and Risk Reduction Project
TABLE OF CONTENTS
Page
I. STRATEGIC CONTEXT .................................................................................................1
A. Country Context ............................................................................................................ 1
B. Sectoral and Institutional Context ................................................................................. 1
C. Higher Level Objectives to which the Project Contributes .......................................... 3
II. PROJECT DEVELOPMENT OBJECTIVES ................................................................4
A. PDO............................................................................................................................... 4
B. Project Beneficiaries ..................................................................................................... 4
C. PDO Level Results Indicators ....................................................................................... 4
III. PROJECT DESCRIPTION ..............................................................................................4
A. Project Components ...................................................................................................... 4
B. Project Cost and Financing ........................................................................................... 6
Table 1. Project Cost and Financing .................................................................................. 6
C. Lessons Learned and Reflected in the Project Design .................................................. 6
IV. IMPLEMENTATION .......................................................................................................7
A. Institutional and Implementation Arrangements .......................................................... 7
B. Results Monitoring and Evaluation .............................................................................. 8
C. Sustainability................................................................................................................. 8
V. KEY RISKS ........................................................................................................................9
A. Overall Risk Rating and Explanation of Key Risks...................................................... 9
VI. APPRAISAL SUMMARY ..............................................................................................10
A. Economic and Financial Analysis ............................................................................... 10
B. Technical ..................................................................................................................... 11
C. Financial Management ................................................................................................ 11
D. Procurement ................................................................................................................ 12
E. Social (including Safeguards) ..................................................................................... 12
F. Environment (including Safeguards) .......................................................................... 15
G. World Bank Grievance Redress .................................................................................. 16
PEOPLE’S REPUBLIC OF CHINA: Lushan Earthquake Reconstruction and Risk
Reduction Project.........................................................................................................................17
Annex 1: Results Framework and Monitoring .........................................................................17
Annex 2: Detailed Project Description .......................................................................................21
Annex 3: Implementation Arrangements ..................................................................................26
Annex 4: Implementation Support Plan ....................................................................................42
Annex 5: Economic and Financial Analysis ..............................................................................44
A. Economic ANALYSIS .....................................................................................................44
B. Fiscal Analysis ..................................................................................................................51
Annex 6: Project MAP.................................................................................................................56
PAD DATA SHEET
China
Lushan Earthquake Reconstruction and Risk Reduction Project (P153548)
PROJECT APPRAISAL DOCUMENT
EAST ASIA AND PACIFIC
Social, Urban, Rural & Resilience Global Practice
Report No.: PAD1674
Basic Information
Project ID EA Category Team Leader(s)
P153548 B - Partial Assessment Madhu Raghunath, Ji You
Lending Instrument Fragile and/or Capacity Constraints [ ]
Investment Project Financing Financial Intermediaries [ ]
Series of Projects [ ]
Project Implementation Start Date Project Implementation End Date
13-Dec-2016 30-Jun-2022
Expected Effectiveness Date Expected Closing Date
12-Mar-2017 30-Jun-2022
Joint IFC
No
Practice
Manager/Manager
Senior Global Practice
Director Country Director Regional Vice President
Abhas K. Jha Ede Jorge Ijjasz-Vasquez Bert Hofman Victoria Kwakwa
Borrower: People's Republic of China
Responsible Agency: Sichuan Urban Environment Project Office (UPPMO)
Contact: Yi Shi Title: Director
Telephone No.: 0086-28-86128880 Email: [email protected]
Responsible Agency: Sichuan Provincial Transportation Department Highway Bureau (TPPMO)
Contact: Yinghong Quan Title: Director
Telephone No.: 0086-28-85580812 Email: [email protected]
Project Financing Data(in USD Million)
[ X ] Loan [ ] IDA Grant [ ] Guarantee
[ ] Credit [ ] Grant [ ] Other
Total Project Cost: 384.07 Total Bank Financing: 300.00
Financing Gap: 0.00
Financing Source Amount
Borrower 84.07
International Bank for Reconstruction and
Development
300.00
Total 384.07
Expected Disbursements (in USD Million)
Fiscal
Year
2017 2018 2019 2020 2021 2022 0000 0000 0000 0000
Annual 5.00 50.00 75.00 75.00 75.00 20.00 0.00 0.00 0.00 0.00
Cumulati
ve
5.00 55.00 130.00 205.00 280.00 300.00 0.00 0.00 0.00 0.00
Institutional Data
Practice Area (Lead)
Social, Urban, Rural and Resilience Global Practice
Contributing Practice Areas
Transport and Information and Communication Technology
Cross Cutting Topics
[ X ] Climate Change
[ ] Fragile, Conflict & Violence
[ X ] Gender
[ ] Jobs
[ ] Public Private Partnership
Sectors / Climate Change
Sector (Maximum 5 and total % must equal 100)
Major Sector Sector % Adaptation
Co-benefits %
Mitigation
Co-benefits %
Health and other social services Other social services 20 30
Transportation Rural and Inter-Urban
Roads and Highways
40 30
Water, sanitation and flood protection Sanitation 20 30
Water, sanitation and flood protection Water supply 20 30
Total 100
I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information
applicable to this project.
Themes
Theme (Maximum 5 and total % must equal 100)
Major theme Theme %
Social protection and risk management Natural disaster management 35
Urban development City-wide Infrastructure and Service
Delivery
50
Rural development Rural services and infrastructure 10
Environment and natural resources
management
Other environment and natural resources
management
5
Total 100
Proposed Development Objective(s)
The project development objectives are to improve access to disaster resilient infrastructure and
strengthen risk reduction in select municipalities of Sichuan Province and to improve emergency
preparedness in Shimian County in Sichuan Province.
Components
Component Name Cost (USD Millions)
Upgrading and Risk Reduction of Rural Roads 47.61
Upgrading of Priority Urban and Emergency Infrastructure 304.19
Technical Assistance for Strengthening of Disaster
Management and Preparedness in Shimian County
4.50
Project Management and Capacity Building 27.02
Systematic Operations Risk- Rating Tool (SORT)
Risk Category Rating
1. Political and Governance Low
2. Macroeconomic Moderate
3. Sector Strategies and Policies Moderate
4. Technical Design of Project or Program Moderate
5. Institutional Capacity for Implementation and Sustainability Substantial
6. Fiduciary Moderate
7. Environment and Social Moderate
8. Stakeholders Low
9. Other
OVERALL Substantial
Compliance
Policy
Does the project depart from the CAS in content or in other significant Yes [ ] No [ X ]
respects?
Does the project require any waivers of Bank policies? Yes [ ] No [ X ]
Have these been approved by Bank management? Yes [ ] No [ ]
Is approval for any policy waiver sought from the Board? Yes [ ] No [ X ]
Does the project meet the Regional criteria for readiness for implementation? Yes [ X ] No [ ]
Safeguard Policies Triggered by the Project Yes No
Environmental Assessment OP/BP 4.01 X
Natural Habitats OP/BP 4.04 X
Forests OP/BP 4.36 X
Pest Management OP 4.09 X
Physical Cultural Resources OP/BP 4.11 X
Indigenous Peoples OP/BP 4.10 X
Involuntary Resettlement OP/BP 4.12 X
Safety of Dams OP/BP 4.37 X
Projects on International Waterways OP/BP 7.50 X
Projects in Disputed Areas OP/BP 7.60 X
Legal Covenants
Name Recurrent Due Date Frequency
Annual Work Plan X
Description of Covenant Project Agreement, Section I.B.3 of Schedule: The Project Implementing Entity shall, and shall cause
each Project City, County, and District to: (a) carry out activities under the Project during each fiscal
year in accordance with Annual Work Plans agreed with the Bank; (b) prepare and furnish to the Bank
by January 31 in each year, beginning in 2017, a draft Annual Work Plan for review and comment,
summarizing the implementation progress of the Project for the said year and the Project activities to be
undertaken in the following calendar year, including the proposed annual budget for the Project; (c)
taking into account the Bank’s comments, finalize and furnish to the Bank no later than March 1 in each
year, beginning on 2017, the Annual Work Plan, satisfactory to the Bank; and (d) thereafter, ensure the
implementation of the Project during the following calendar year in accordance with the Annual Work
Plan, as such plan may have been revised with the approval of the Bank, in a manner satisfactory to the
Bank.
Name Recurrent Due Date Frequency
Mid-Term Review December 31, 2019
Description of Covenant Project Agreement, Section II.A.2 of Schedule: Without limitation to the provisions of paragraph A.1
above, the Project Implementing Entity shall prepare, under terms of reference satisfactory to the Bank,
and furnish to the Bank no later than December 31, 2019, a consolidated mid-term review report for the
Project, summarizing the results of the monitoring and evaluation activities carried out from the
inception of the Project, and setting out the measures recommended to ensure the efficient completion of
the Project and to further the objectives thereof.
Team Composition
Bank Staff
Name Role Title Specialization Unit
Madhu Raghunath Team Leader
(ADM
Responsible)
Program Leader EACVF
Ji You Team Leader Urban Specialist Co-TTL GSU08
Guoping Yu Procurement
Specialist (ADM
Responsible)
Senior Procurement
Specialist GGO08
Haixia Li Financial
Management
Specialist
Sr Financial
Management
Specialist
GGO20
Jay Pascual Counsel Senior Counsel LEGES
Artessa Saldivar-Sali Team Member Municipal Engineer GSU08
Dan Xie Team Member Program Assistant EACCF
Jian Xie Team Member Senior
Environmental
Specialist
GEN03
Jolanta Kryspin-Watson Team Member Lead Disaster Risk
Management
Specialist
TTL until June 29,
2015
GSU08
Meixiang Zhou Safeguards
Specialist
Social
Development
Specialist
GSU02
Michael Bonte-
Grapentin
Team Member Senior Disaster
Risk Management
Specialist
GSU08
Ning Yang Safeguards
Specialist
Senior
Environmental
Engineer
GEN02
Wenyan Dong Team Member Operations Analyst GSU08
Yuhui Jiao Team Member Transport Specialist GTI02
Zhuo Yu Team Member Finance Officer WFALN
Zuzana Stanton-Geddes Team Member Operations Analyst GSU08
Extended Team
Name Title Office Phone Location
Chen Baode Meteorological Expert
Chuntai Zhang Economist Consultant Beijing
Peter Yanev Senior Seismic Engineer
Rufei Zhang Urban Planner and
Institutional Specialist Shanghai
Wu Guochun DRM Consultant
(Community
Participation)
Yin Yueping Geological Disaster Risk
Assessment and
Prevention Specialist
Locations
Country First
Administrative
Division
Location Planned Actual Comments
China Sichuan Sichuan Province X
China Sichuan Chengdu X
1
I. STRATEGIC CONTEXT
A. Country Context
1. Over the past three and half decades, China has witnessed an unmatched progress
in economic growth and poverty reduction. Between 1981 and 2012, the percentage of the
population living below the US$1.25 a-day international poverty line fell from 84.3 percent to
5.2 percent, while the absolute number of poor fell from 837.5 million to 70.4 million. Yet, with
a population of 1.3 billion, China is also home to the third largest number of poor in the world. In
2011, China's gross national income per capita of US$4,930 ranked 114th
in the world. Further
reducing poverty is essential for China’s drive to become a modern, harmonious and high-
income society.
2. China is heavily exposed to a range of natural hazards which pose a serious
challenge to reducing poverty and promoting shared prosperity. In the recent decade,
frequent natural disasters have caused high loss of life and damage to property in China,
endangering the country’s impressive development gains. Between 2000 and 2015, disasters
affected some 1.6 billion people and caused about US$300 billion in damages.1 Between 2002
and 2011, China incurred damages due to natural disasters averaging US$27.4 billion (0.4
percent of Gross Domestic Product, GDP) each year, peaking in 2003, 2008 and 2010.2 In the
context of climate change, China’s risk to hydro meteorological hazards is expected to increase.
Increasingly, cities and urban centers are being exposed to climate and natural hazard risks that
tend to impact a large proportion of economic assets and households.
3. The Lushan Region of Sichuan Province is one of the world’s most geologically and
meteorologically active regions. Located between Chengdu Plain and Qinghai-Tibet Plateau,
the province sits on an intersection where three seismic fault zones (Longmen Mountain,
Xianshui River, and Anning River) meet. Earthquake risk is particularly high in the region, with
some of the largest historical events having occurred in densely populated locations. Many
powerful earthquakes3 have struck in the recent past in China, and according to official records,
more than 280 events exceeding 5.5 on the Richter scale have occurred in the country since
1970. The Wenchuan Earthquake of 2008 killed over 69,000 people and caused direct economic
losses of US$123 billion4
. Flooding, landslides, rock falls, and rockslides are associated
challenges and are likely to increase due the increase in built-up areas.
B. Sectoral and Institutional Context
4. On April 20, 2013, almost five years after the 2008 Wenchuan earthquake, the
Lushan earthquake struck China’s Sichuan province. With its epicenter in Lushan County in
Ya’an Municipality (some 70 miles west-southwest of Chengdu, the capital of Sichuan
1 Staff analysis based on EM-DAT. 2015. CRED International Disaster Database. Data accessed 16 March 2015.
2 Based on 10 years of historical loss data from Swiss Re (2002–2011) in World Bank. 2013. Strong, Safe, and
Resilient: A Strategic Policy Guide for Disaster Risk Management in East Asia and the Pacific. World Bank. 3 Major earthquakes included the 2008 Wenchuan earthquake (magnitude 8.0), the 2010 Yushu earthquake
(magnitude 7.1), the 2013 Lushan earthquakes (magnitude 7.0) and the 2014 Ludian earthquake (magnitude 6.5). 4 World Bank. 2008. China - Wenchuan Earthquake Recovery Project. Washington, DC: World Bank.
https://hubs.worldbank.org/docs/imagebank/pages/docprofile.aspx?nodeid=9988235
2
Province), several counties, prefectures and cities of Sichuan Province (including Ya’an,
Chengdu, Leshan, Meishan, Ganzi, Liangshan, and Deyang) were hit and 2.2 million people
were affected. Although smaller in scale compared to the Wenchuan earthquake, the Lushan
earthquake caused similar types of damage, disruptions to infrastructure, and impact on the
province’s population. The earthquake resulted in 176 fatalities and over 12,000 injuries in the
impact area. Qionglai City5, located to the west of Chengdu, suffered serious damage to its road
network (350 km of rural roads) resulting in economic losses of approximately US$48.4 million.
There were many landslides and rockslides in the Longmen Mountains, where Ya'an is located.
Frequent aftershocks caused further damage.
5. Following the Earthquake, the Lushan Earthquake Reconstruction Master Plan6
was approved by the State Council in July 2013 as the guiding document laying out key
policies and strategies for the recovery of the disaster-affected areas. The plan emphasizes
preparedness for geological disasters, capacity building for integrated disaster prevention and
mitigation, and improvement of the disaster relief and emergency rescue system in Sichuan
Province. It covers a severely hit area of 10,706 square kilometers that includes six counties in
Ya'an Municipality and six towns in Chengdu. In terms of ex-ante Disaster Risk Management
(DRM), the Master Plan includes: (i) establishment and improvement of a comprehensive
emergency response system; (ii) improving monitoring, early warning and forecasting; (iii)
improving disaster prevention; (iv) improving disaster information management; (v) introduction
of an educational component to “popularize the knowledge of disaster prevention and
mitigation”; (vi) reconstruction of meteorological observation stations and emergency response
systems; (vii) construction of new emergency broadcasting platforms; and (viii) establishment of
the Sichuan satellite disaster reduction application center. As of July 2015, 78 percent of the total
estimated reconstruction costs associated with this Master Plan (RMB86 billion, equivalent to
US$13.87 billion) had been expended. The Bank’s value added through this project would
contribute to the overall objective of the Lushan Earthquake reconstruction master plan by
bringing in international best practice expertise for risk reduction and emergency preparedness at
the sub-national level.
6. China has made considerable efforts to promote a proactive approach to disaster
risk management; however challenges remain, particularly in terms of implementation at
the local level. At the national level, China has shifted its focus from recovery and
reconstruction to introducing risk reduction in socio-economic planning. Existing building
codes in earthquake-prone areas have been upgraded since the 2008 Wenchuan earthquake, but
challenges remain at the local level to implement and comply with the set policies and ensuring
quality construction, maintenance and operations. There is also a need to improve synergies
between the central and local levels by effectively using updated disaster risk information in
development planning and investment processes.
5 Located 15 km from the epicenter of the Lushan earthquake, Qionglai City has a population of 660,000. Qionglai City covers an
area of 1,384 sq. km with jurisdiction over 24 towns, six of which were severely affected by the earthquake. 6 The Master Plan was prepared by a leading and coordination group for the Lushan earthquake reconstruction, established by the
State Council and comprising of all line ministries (including the National Development and Reform Commission, NDRC),
Ministry of Finance, Ministry of Civil Affairs, Ministry of Housing, Urban-Rural Development and Sichuan Provincial
Government) and chaired by NDRC.
3
7. Over the past two decades, the World Bank’s support to natural disasters in China
has shifted from a recovery to a risk reduction approach. In the late 1990s, the assistance for
the 6.2 Richter scale earthquake in Zhangbei (Hebei province, on January 10, 1998) and a
magnitude 7.0 earthquake in Lijiang (Yunnan Province, on February 3, 1996) focused on
restoration of infrastructure and facilities (housing, health, education, agriculture and irrigation,
water resource management, cultural heritage conservation and protection) and enhancement of
economic activities for additional sources of income to vulnerable populations. In the 2000s, the
Bank supported the Government through the Wenchuan Earthquake Reconstruction Project
(WERP) to restore essential infrastructure, health, and education services, as well as in
introducing seismic and flood risk reduction, and building capacity of local governments to
manage recovery programs.
8. The proposed project focuses on risk reduction and disaster resilience in
infrastructure and multi-hazard planning in Ya’an municipality and Qionglai City.
Building on the lessons learnt during the past two decades, the proposed project focuses on
strengthening critical infrastructure, including roads and emergency infrastructure that were
prioritized in the Lushan Earthquake Reconstruction Master Plan. The project will promote
knowledge transfer and capacity building at the local level by financing a pilot multi-hazard risk
information platform in Shimian County. The pilot will provide an entry point for systematically
integrating existing DRM systems within socio-economic plans and investments, and will also
provide a vehicle for knowledge sharing across districts/counties/municipalities in Sichuan.
Through the successful engagement in disaster recovery in China, as well as global experience in
earthquake reconstruction and multi-hazard risk reduction, the Bank can contribute to building
long-term disaster resilience in Sichuan Province and to the long-term sustainability of
infrastructure in the project areas.
C. Higher Level Objectives to which the Project Contributes
9. The proposed project is fully consistent with the World Bank Group’s China
Country Partnership Strategy (CPS Report No. 67566-CN) for FY2012-2016 and
contributes to Strategic Theme 1 “Supporting Greener Growth”. This will be done through
enhancing urban environmental services, helping project areas to "build back better" in the wake
of disasters, and building long-term resilience to natural hazards. The project will also contribute
to Strategic Theme 2 “Promoting More Inclusive Development”, by supporting resilient
infrastructure development, including urban and rural roads.
10. The project will directly contribute to the Government's overarching goal of
building a harmonious society and the World Bank Group’s twin goals of reducing extreme
poverty and boosting shared prosperity in the following ways. The Sichuan region is highly
vulnerable to natural hazard shocks as it is reliant on agriculture as its economic base. The
proposed investments will help improve accessibility and safety of people in the project areas
during future disaster events. Investments in emergency infrastructure and facilities will help the
local authorities meet the immediate needs of different groups of population in the aftermath of a
disaster, and facilitate early recovery. The poor and vulnerable population (e.g., the elderly,
children and women) are typically more reliant on public infrastructure, and hence these efforts
will contribute to supporting their sustainable development, including helping them prepare for
future shocks.
4
II. PROJECT DEVELOPMENT OBJECTIVES
A. PDO
11. The project development objectives are to improve access to disaster resilient
infrastructure and strengthen risk reduction in select municipalities of Sichuan Province and to
improve emergency preparedness in Shimian County in Sichuan Province.
B. Project Beneficiaries
12. At least 155,700 local residents living in project cities, counties or districts will directly
benefit from the activities related to urban infrastructure in the project. In addition, there will be
157,300 people living along the rehabilitated rural roads who will have access to rural roads and
will benefit from the investments.
C. PDO Level Results Indicators
13. The proposed PDO-level results indicators are:
i. Direct project beneficiaries (number), of which female (percentage) [core sector
indicator].
ii. Rural roads rehabilitated incorporating landslide risk reduction measures (km).
iii. People in urban areas provided with improved access to roads (number;
percentage of which female)
iv. People in urban areas provided with improved drainage conditions (number;
percentage of which female).
v. Population with improved access to emergency shelters (number; percentage of
which female).
vi. Improved capacity of local authorities in Shimian County to prepare for multi-
hazards (use of a score card to measure capacity).
III. PROJECT DESCRIPTION
A. Project Components
14. The proposed project will support risk reduction efforts in Ya’an and Chengdu
Municipalities by rehabilitating and upgrading investments in critical road and emergency
infrastructure in select urban and rural municipalities, and improving disaster preparedness.
Infrastructure investments were prioritized based on the remaining investments identified by the
Lushan Earthquake Reconstruction Master Plan, the Overall Planning and Implementation
Covering Reconstruction after Lushan Earthquake (Sichuan Development and Reform
Commission Investment No. 315), and relevant sectoral plans. Components 1 and 2 will finance
critical rural and urban road infrastructure with a special focus on providing emergency access to
populations and connecting populations to emergency centers, hospitals and other infrastructure.
The project will use the principles of “build back better” and will contribute to longer-term
5
socio-economic development, including enhancing urban infrastructure equality, and integrate
risk reduction measures in the project county/districts. Component 3 will strengthen emergency
preparedness in Shimian County, serving as a demonstration for other counties, with knowledge
shared among other project counties. A summary description of each component is provided
below. Annex 2 contains a detailed project description.
Component 1. Upgrading and Risk Reduction of Rural Roads (Total Cost: US$47.61 million,
of which US$29.95 million from loan proceeds (IBRD) and US$17.66 million from counterpart
funds)
15. Component 1 will finance upgrading and rehabilitation of rural roads in select counties in
the Municipality of Chengdu and Municipality of Ya’an in the Sichuan Province, including
associated pavements, drainage ditches, bridges, culverts, guardrails, traffic signs, and slope
protection, and the carrying out of road safety audits for these investments to, inter alia, guide
the preliminary design.
16. The geographical focus of the investment will include Qionglai City, Tianquan County,
and Yingjing County.
Component 2. Upgrading of Priority Urban and Emergency Infrastructure (Total Cost:
US$304.19 million, of which US$245.38 million from loan proceeds (IBRD) and US$58.81
million from counterpart funds)
17. Carrying out of lifeline urban infrastructure investments in select counties and districts in
the Municipality of Ya’an, including, inter alia, reconstruction of urban roads with associated
civil works, new construction of roads with associated civil works, construction of bridges,
construction of emergency evacuation shelters with associated facilities and equipment,
upgrading of river embankments, construction of water plants, and the carrying out of road safety
audits for the above-mentioned road infrastructure investments to guide preliminary design.
18. The geographical focus of the investments will include Lushan County, Yucheng District,
Tianquan County, Baoxing County, Mingshan District, Yingjing County and Shimian County,
all in the Municipality of Ya’an.
Component 3. Technical Assistance for Strengthening of Disaster Management and
Preparedness in Shimian County (Total Cost: US$4.50 million from loan proceeds (IBRD))
19. This component will finance technical assistance for the design and implementation of a
pilot disaster risk management system, establishment of a disaster control and command center
for Shimian county’s emergency response office, the acquisition of software, data and equipment
required to establish the DRM system, and training and capacity building of targeted system
users.
Component 4. Project Management and Capacity Building (Total Cost: US$27.02 million, of
which US$19.42 million from loan proceeds and US$7.60 million from counterpart funds)
6
20. This component will finance: surveys and detailed design for project activities; and
support for project management, engineering supervision and consulting services, external
environmental and resettlement monitoring, hiring of procurement agents, and training and
workshops.
B. Project Cost and Financing
21. The project cost is US$384.07 million. The lending instrument would be IBRD
Investment Project Financing (IPF) in the amount of US$300 million. The Borrower has chosen
a US Dollar denominated, commitment-linked variable spread loan, based on six-month LIBOR
plus an additional variable spread. It has also selected all conversion options, a level repayment
profile, payment of the front-end fee with IBRD loan proceeds, and a final maturity of 29 years,
including a 6-year grace period.
22. The Bank loan proceeds of US$300 million and counterpart funds of US$84.07million
will co-finance each component but for different activities and contracts. The main direct
investments for civil works, goods, consultants’ services, training and workshops will be 100
percent financed by the Bank loan. The counterpart funds will be used for general costs for
design, investigation, engineering supervision, some labor contributions as well as land
acquisition and resettlement.
Table 1. Project Cost and Financing
Project Components Total Cost
(US$ million)
IBRD
Financing
(US$ million)
Counterpart
Financing
(US$ million)
IBRD
%
Component 1 – Upgrading and Risk
Reduction of Rural Roads 47.61 29.95 17.66 62.9
Component 2 – Upgrading of Priority
Urban and Emergency Infrastructure 304.19 245.38 58.81 80.7
Component 3 - Technical Assistance for
Strengthening of Disaster Management
and Preparedness in Shimian County
4.50 4.50 0 100
Component 4- Project Management and
Capacity Building 27.02 19.42 7.60 71.9
Front end Fee 0.75 0.75
Total Costs 384.07 300 84.07
C. Lessons Learned and Reflected in the Project Design
23. The project incorporates lessons from the Bank’s global experience in earthquake
recovery and disaster risk reduction projects (e.g., Turkey Istanbul Seismic Risk Mitigation and
Emergency Preparedness Project (ISMEP), Romania Hazard Risk Mitigation and Emergency
Preparedness Project, post-disaster recovery efforts in Indonesia and Philippines) as well as
projects in China, including the Wenchuan Earthquake Recovery Project.
7
24. Critical infrastructure deserves special attention. Certain structures, such as schools,
hospitals, police and fire stations, emergency centers, key government buildings and lifeline
infrastructure are required to be designed to higher than the minimum applicable standards, given
their importance and/or additional safety considerations. Roads and bridges serve as lifelines for
evacuation and access for post-disaster response, and designs should be sufficiently resilient to
ensure key routes remain operational and secondary routes can be quickly restored based on their
strategic classification. Therefore, technical codes and standards have been used in countries
such as Chile to guide the inclusion of risk reduction features into the design of infrastructure
investments. Reconstruction and repair provide opportunities to implement cost-effective
resilience measures and a strong quality-control and enforcement mechanism. Experience from
Latin America shows that landslide risk assessment along the alignment of the proposed road
investments can help to ensure that the appropriate risk reduction measures are included in the
investments. The project will incorporate and apply these lessons to the investments that would
be financed under Components 1 and 2 by building critical infrastructure to higher standards
against risks of earthquake, flooding, landslide and rockslide, and relying on landslide
assessments where relevant.
25. Leveraging and strengthening capacity of local authorities. Experience in China
suggests that local authorities need to be fully involved and their capacity strengthened in
disaster risk management, including preparedness and response, as well as mainstreaming risk
reduction into development. The proposed project will also build on and leverage the risk
reduction efforts of WERP, by ensuring that critical infrastructure is built to new seismic and
construction codes introduced after the Wenchuan earthquake. Apart from learning from the
WERP implementation, the World Bank is well-placed to support Shimian County in sharing
earthquake recovery and disaster risk reduction knowledge through activities under Component
3.
26. Citizen engagement. Involving communities meaningfully in emergency preparedness
and response can increase the efficiency, credibility and functionality of a system. WERP had
involved communities in the education sector in particular to increase the awareness and
sensitivity of the population to risk and emergency response. The Turkey ISMEP Project trained
over 920,300 volunteers as part of efforts to strengthen the coordination of emergency response
and campaigns reached an estimated 5.5 million residents. Experience from Indonesia shows that
involving communities in improving emergency response systems, evacuation spaces and
emergency facilities plays an important part in increasing collective resilience and facilitates the
work of public authorities preparing for and responding to disasters. This experience will be
reflected during project implementation by devising mechanisms through the multi-hazard risk
platform to effectively engage citizens in DRM.
IV. IMPLEMENTATION
A. Institutional and Implementation Arrangements
27. The Lushan Strong Earthquake Recovery Committee of Sichuan Province established in
May 2013 in accordance with the Notice by the General Office of Sichuan Provincial Committee
of Central Party Committee and the General Office of People’s Government of Sichuan Province
No. 24/2013 will act as the Provincial Leading Group (PLG) to provide high-level policy
8
direction for the project. This Committee provides direction for all the project implementing
entities and relevant agencies included in Lushan Earthquake Recovery Master Plan. A
Municipal Leading Group (MLG) will be responsible for leading and coordinating the relevant
agencies and its subordinate counties/districts in the Ya’an City. The existing Leading Group for
the World Bank Funded Lushan Earthquake Recovery and Risk Reduction Project in Ya’an City
established by the Project Implementing Entity in December 2014 in accordance with the Notice
by the People’s Government of Ya’an City No.254/2014, will act as the MLG.
28. The Project will be coordinated by the Sichuan Provincial Development and Reform
Commission (SPDRC) and the Sichuan Provincial Finance Department (SPFD). Two Provincial
Project Management Offices (PPMOs) are responsible for guiding and supervising project
implementation in close cooperation with Chengdu and Ya’an municipalities. The Sichuan
Provincial Transportation Department Highway Bureau (TPPMO), which is housed under the
Sichuan Provincial Transportation Department (SPTD), will be responsible for overall
coordination of Component 1. The Sichuan Urban Environment Project Office (UPPMO), which
is housed in Sichuan Provincial Department of Housing and Urban Construction (SPDHUC),
will be responsible for the overall coordination of Components 2 and 3. Component 4 will
support the coordination efforts of UPPMO and TPPMO. Each of the eight project
cities/counties/districts have set up respective City/County/District Project Management Offices
and Project Implementation Units (PIUs).
29. The PPMOs have previous experience in managing donor funded projects and are
responsible for: (i) overall project coordination, management and monitoring; (ii) annual budget
preparation; (iii) progress reporting to Sichuan Provincial Government and the Bank; (iv)
interagency coordination and procurement support; and (v) training and capacity-building
facilitation. Ya’an PMO would be responsible for: (i) project wide quality assurance; and (ii)
project-wide management and; (iii) report progress to the PPMOs. The cities/counties/districts
will be responsible for contracting, approval, implementation and completion of activities, with
close support from the PPMOs.
B. Results Monitoring and Evaluation
30. The project results framework (see Annex 1) forms the basis to track progress of
activities to meet the project objective. Monitoring, evaluation and reporting on the results
framework will be assisted by the PPMOs and will be conducted by district/county PIUs and
consolidated by Ya’an PMO for component 2. Project management and construction supervision
consultants will provide necessary technical support, including environmental and social
safeguard audits, and training for an effective monitoring and evaluation (M&E) system. The
PPMOs will provide semi-annual reports to the Bank that would provide an overview of progress
and highlight issues that need attention. The key findings of technical consultants supporting the
PPMOs/PIUs will be incorporated in the semi-annual reports.
C. Sustainability
31. Sustainability of project investments depends on several factors: (i) government and
cities building an effective city-level disaster risk management institution that can coordinate,
9
operate and implement project investments; and (ii) adequate government budget for operation
and maintenance of completed investments.
32. Based on the experience of other projects in China, the technical design and capacity of
investments are usually based on the current and future demand for the services to be delivered.
Investments are integrated into the existing service delivery networks and bridge gaps in service
provision, balancing direct investments in reconstruction with long-term infrastructure
development needs identified in the prevailing local city/town master plans. The introduction of
cost-effective risk reduction elements will improve the long-term sustainability of critical public
infrastructure. Where possible, relevant network and demand analyses will be conducted to
determine the appropriate capacity and sizing of urban infrastructure (e.g., capacity of the
proposed water treatment plant, and road width). The development and operationalization of a
multi-hazard system will support the use of risk information within different aspects of disaster
risk management, including the use of risk information in local investment plans, and will foster
sustainable development.
33. Operation and Maintenance (O&M) of infrastructure investments will be specifically
considered in the technical design, including cost estimations.
V. KEY RISKS
A. Overall Risk Rating and Explanation of Key Risks
34. The summary table for the Systematic Operations Risk- Rating Tool (SORT) is included
in the Data Sheet. The overall implementation risk for the project is rated ‘Substantial’, based on
the risks associated with counterpart funding, the borrowing capacity of the participating
municipalities, and the implementation capacity of the PIUs. Identified technical risks have been
rated moderate.
35. Counterpart funding. Project city/district/counties will need to mobilize adequate
resources to implement the project. The indebtedness of the project district/counties are
considered manageable, given the low counterpart funding requirements (see Annex 5 for
details). The provincial government has also received resources from the central government for
reconstruction efforts that will be used for counterpart funding.
36. Implementation capacity and fiduciary aspects. The capacity to implement a Bank
investment project at the county level in Ya’an Municipality is low, with the exception of
Lushan, Shimian and Baoxing Counties which have implemented the WERP. There are fiduciary
risks due to unfamiliarity with Bank procurement procedures. To mitigate these risks, the project
includes consulting services for detailed engineering design and bid document review,
construction supervision, and monitoring and evaluation. PIU staff will be provided training by
the Bank during implementation both during missions and through formal events. Implementing
agencies at the three administrative levels will also engage qualified consultants to provide
implementation support.
10
VI. APPRAISAL SUMMARY
A. Economic and Financial Analysis
37. Economic Analysis. A mix of cost-benefit analysis (CBA) and cost-effectiveness
analysis (CEA) was used in the economic analysis. Cost-benefit analysis was conducted for all
investment activities, except for emergency shelters, for which a cost-effective analysis was
used. Investments in emergency shelters / evacuation parks contribute to achieving the targets of
emergency evacuation and risk reduction set by the local government. These targets are based on
their importance to public safety and the quality of life of local residents of project
counties/cities. As it is difficult to establish a direct causal link between these investments and
benefits, as well as to quantify and monetize public safety benefits, CEA is appropriate to
compare different technical options and select the least-cost option. The table below summarizes
the results of the cost benefit analysis for the different categories of investments in each county.
Table 2: Overview of EIRR Analysis in each county
38. Sensitivity analysis confirms that the EIRRs are robust. For more details of the economic
analysis, refer to Annex 5.
39. Fiscal Analysis. Of the total World Bank loan, US$107.5 million from loan proceeds will
be on-grant and US$192.5 million will be on-lent to Chengdu and Ya’an Municipalities that will
be proportionally allocated to Qionglai City in Chengdu and seven district/counties in Ya’an.
The project city/district/counties will be the “final borrowers” of the World Bank loan (refer to
Table A3.2 in Annex 3).
40. The debt data provided by the project city/district/counties shows the total accumulated
debt balance of the project city/district/counties was RMB14.8 billion in 2014,7
that was about
16.1 percent of the total GDP, 212.5 percent of the total government local fiscal revenue, and
45.0 percent of the total government fiscal expenditure (refer to Annex 5). Among which, the
direct debt was about 53 percent of the total debt, that is to be paid back by the
city/district/county governments. The project city/district/counties have experienced robust
7 The total government debt includes the direct debt, guaranteed debt, and contingent liability.
11
socioeconomic development. In the past four years (2011–2014), the average increase rate of the
public fiscal revenue was 18.1 percent per year for the whole project area. Large amount of fiscal
subsidies have been provided from central government and sector authorities following the
earthquake. For recovery and reconstruction of the project areas, total RMB30.8 billion fiscal
subsidy was provided from the central government in 2014, which was about 4.4 times of the
local fiscal revenue. Such fiscal resources have supported the reconstruction of urban and rural
road infrastructure and associated development in the project areas.
41. For the World Bank loan, the repayments would be small compared to the local fiscal
revenues for all project city/district/counties, averaging 0.75 percent in 2022. Close to US$107.5
million of the loan repayment would be made by the central government,8 the repayments by the
project city/district/counties would be smaller and will not add major burden on the local
governments.
B. Technical
42. Project investments in rural roads and urban infrastructure focus on building lifeline
infrastructure, including emergency evacuation shelters, rescue corridor roads at the city level to
connect to regional highways/expressways, and access roads at the community level that link to
evacuation facilities, with associated improvements to water supply, wastewater collection and
drainage networks. Where it is technically feasible and economically justified, the project’s
infrastructure investments would be designed to a higher standard against risks of earthquake,
flooding, landslide and rockslide to provide more-resilient infrastructure in project towns that are
prone to multi-hazard risks. Rural and urban road construction, including reconstruction and new
construction, account for a major part of the project investments. Roads to be rehabilitated or
newly constructed in project counties/districts will be designed in accordance with national and
provincial standards required for road-specific features (number and width of lanes, pavement
and structural designs) and for urban features (footpaths, pedestrian facilities, drainage, etc.). In
project counties/districts/towns, efficiency in the use of available road space will be assured
through the introduction of traffic management improvements. An additional quality-check will
be conducted during the review of detailed designs and bidding documents under Component 4.
All selected infrastructure investments represent least-cost and affordable solutions, derived from
an analysis of alternatives, and are sized to avoid creating excess capacity. Project costs were
estimated based on government unit rates and with reference to market rates.
C. Financial Management
43. IBRD loan proceeds including overseeing the Designated Account (DA), will be
managed by SPFD. UPPMO and TPPMO and the seven PIUs will be responsible for financial
management of the project.
44. The FM capacity assessment identified the following principal risks: (i) two parallel
arrangements – activities under the urban infrastructure and rural transport will be carried out
and managed by two parallel institutional systems and two parallel FM systems will be set up at
the provincial level. This poses a risk to the project to ensure that the project is implemented in a
8 From the total loan amount of US$300 million, US$107.5 million will be repaid by the central government.
12
timely manner and that Ya’an city fulfills its counterpart funds commitment during
implementation; (ii) most of county PIUs (especially three county PIUs under rural transport
part) are new to the Bank operations, therefore are not familiar with the Bank FM policies and
requirements; (iii) counterpart funding from local county government may be not in place as
committed due to low fiscal capacity and; (iv) delays in Bank loan disbursement, project
accounting and financial reporting could occur, in part caused by inefficient working and/or
document flows between the PPMOs, PIUs and finance departments.
45. Mitigation measures to address the above-mentioned risks are as follows: (i) PLG and
SPFD should closely coordinate the implementation of two parallel parts; (ii) Project FM manual
(FMM) to specify the roles and responsibilities of each party as well as the working procedures
and documents flow among the parties in FM/disbursement arrangements; (iii) extensive
workshop and/or hands-on guidance will be continuously provided by two PPMOs with support
of SPFD in addition to the FM training to be provided by the Bank; and (iv) counterpart funding
demands should be timely formulated in government annual fiscal budget.
D. Procurement
46. The TPPMO and UPPMO have extensive experience in implementing donor-financed
projects. However, some of the PIUs have limited or no experience in implementing donor
financed projects. The procurement capacity assessment of project agencies responsible for
procurement (i.e., TPPMO and UPPMO, as well as eight PMOs and eleven PIUs) identified the
following principal risks: (i) possible inaccurate cost estimates based on government unit rates;
(ii) possible delays and/or non-compliance because of differences between Bank procurement
guidelines and domestic procurement practice; and (iii) inadequate contract management
practices.
47. These risks will be managed by (i) updating the cost estimates based on the market rates
prior to issuance of the bidding documents; (ii) providing procurement training to the two
PPMOs and PIUs/Employers’ staff during project preparation and implementation and; (iii)
inclusion of procurement management procedures, acceptable to the Bank, in the project
management manual and its dissemination to project staff. With the implementation of these
actions the PPMOs and PIUs will have adequate capacity to carry out project procurement
activities in compliance with Bank requirements.
48. A consolidated procurement plan dated May 30, 2016 for the activities to be undertaken
during the first 18 months of the project (including contracts to be procured in advance of loan
signing), has been prepared, reviewed and agreed with the Bank. The procurement plan will be
updated throughout the duration of the project at least annually, or as required, to reflect project
implementation needs. The initial procurement plan, as well as its subsequent updates, will be
posted on the Bank’s external website.
E. Social (including Safeguards)
49. Social Assessment. A comprehensive social assessment (SA) undertaken for the rural
roads and urban infrastructure components identified both positive and negative impacts of the
project. Negative impacts include risks associated with land acquisition, tomb relocation, house
13
demolition, dust and noise pollution, temporary and partial roads blockage, and traffic jams
during project construction. Positive impacts include improved road accessibility and safety,
transportation efficiency, better public emergency facilities (including evacuation paths and
emergency shelters), as well as new opportunities for employment and income for local people
through involvement in project construction. SA findings confirm that there is no presence of
any ethnic minorities in the project counties that trigger Bank OP4.10 on Indigenous Peoples.
Therefore, the Bank OP 4.10 of IP policy is not triggered. Social action plan have been reflected
in the project feasibility study report and the Resettlement Action Plans (RAPs) and the
Resettlement policy framework (RPF).
50. Involuntary resettlement: The project will lead to about 1,241 households (close to
4,554 affected people) being affected by land acquisition and house demolition, with
resettlement in 13 towns in six counties and districts. Of which, 215 households (869 people)
will be affected by both land acquisition and house demolition. It will require permanent
acquisition of about 1,311 mu (87 ha) of land, including 745 mu (50 ha) arable land. In total, the
project will impact 905 households (about 3,151 people) affected by economic resettlement due
to loss of some land, of which, 63 households with 242 people will end up losing more than 20
percent of their arable land. Furthermore, the land acquisition will result in 1,059 landless
farmers whose arable land will meet the threshold of less than 0.3 mu. These farmers will require
social security resettlement that will be paid by 60 percent from the Government budget as
pension premium, and 40 percent will be paid by the farmers themselves. The affected farmers
will have to transfer from rural hukou to urban hukuo to take advantage of the social welfare
benefits. The significance of land loss and land-related income loss is marginal as all the affected
farmers will lose less than 10 percent of their existing land and less than four percent of land-
related income. The project may also need to acquire additional land during project
implementation. Furthermore, the project will remove 40 graves and a number of trees and some
other special facilities such as power lines and poles. The scale of the proposed land acquisition
and resettlement are manageable and negative impacts will be mitigated.
51. The project will result in house demolition of 85,503 sqm, demolition of 1,165 sqm of
simple workshop shelters of two private firms in Tianquan and Shimian counties and, 14,668
sqm of other structures such as fence walls and auxiliary facilities. In addition, the project will
require some 170 mu of land for temporary occupation in Qionglai, Tianquan and Yingjing
counties. The project will remove 44 graves and a number of trees. Close to 336 households
(about 1,403 people) are affected by physical resettlement due to house demolition. Under
Component 2, 286 households will be resettled in six resettlement sites in related project
counties and districts. Under component 1, 50 households have opted to take cash compensation.
52. Most of the resettlement sites have commenced construction in 2014/2015 and will be
ready for the resettled people to move in by 2016. A detailed due diligence review of these sites
was completed in April 2016. The due diligence review shows that the resettlement and
compensation is in compliance with government regulations and the World Bank OP/BP 4.12
policy requirements. There are only two legacy issues that need to follow the schedule of the
Government resettlement process. These issues have been included as part of the monitoring and
evaluation of the resettlement process during implementation. Monitoring and evaluation
measures include: i) monitoring of the Government’s budget and expenditure on sharing
14
contributions to social security for the landless farmers affected by the construction of the two
resettlement sites in Yucheng District and; ii) for the displaced households, a transitional
housing arrangement following the receipt of compensation until the final move that is scheduled
in 2017. The monitoring and evaluation report of the project shall cover these pending issues
until they are fully resolved.
53. To address land acquisition and resettlement, a consolidated RAP has been prepared for
all project activities under Components 1 and 2 respectively. In addition, a RPF has been
prepared to address unanticipated future land acquisition and resettlement. The PPMOs have
each hired an experienced professional consulting team to address issues of land acquisition,
compensation and livelihood restoration, and resettlement for project-affected people and
communities.
54. Linked activities. The construction of sewer and water supply facilities have no linked
activities. However, under Component 1 on rural roads, two sections of Ying Lu Road (total
length of 36 km) in Sanhe Town of Yingjing County have been identified as linked activities
which will be carried out under two local government projects. These linked sections will
permanently acquire about 225 mu of land and 93 mu for temporary use. The sections will affect
about 109 households (about 327 people), of which only seven households with 24 affected
people will lose more than 20 percent of land. The road sections does not require any demolition
of residential houses, however four graves will be removed from the project sites. The land
acquisition and resettlement under these linked activities are included in the RAP and will be
addressed and monitored during project implementation.
55. Disclosure of safeguards documents. The draft RAPs and the RPF were disclosed
locally on January 21, 2016 and disclosed in the World Bank InfoShop on January 27, 2016 and
the final documents were disclosed on March 21, 2016. The Social Assessment was disclosed on
March 20, 2016.
56. Gender. The aftermath of a disaster can be an opportunity to empower women, giving
them more voice in relief, reconstruction and DRM in general. Gender considerations have been
integrated in the project design, social assessment and RAP preparation. Both men’s and
women’s opinions were collected during public consultations and have been embedded in project
design. Women’s needs for road lighting and safety, foot paths, rest areas, special privacy and
transport signs are included in the project design and will be monitored during project
implementation. Compensation and resettlement support will be provided equally to both men
and women. Equal participation and gender responsiveness will be reflected in project activities,
including training and other capacity building activities. Gender disaggregated information will
be included in the annual progress reports and gender related indicators are embedded in the
project Results Framework.
57. Citizen engagement. During project preparation, as part of the social assessment,
intensive public consultations were conducted in accordance with Bank OP4.01 and OP4.12
through a combination of public opinion surveys, meetings with local residents (including not
less than 30 percent women) and consultation meetings with the general public, vulnerable
people, and key groups of people engaged in road construction, transport and disaster reduction
15
and management. The main concerns and suggestions from the public during consultations
mainly include: mitigation of construction noise (particularly night time construction), dust and
gas emissions; proper access roads; lighting and safety; convenient traffic lights and signs;
selection of locations of major emergency sites; and efficient emergency access for hospitals,
schools and concentrated residential sites. These concerns have been addressed in the SA, RAP
and RPF, and the project FSR. Relevant indicators of citizen engagement have been included in
project Results Framework (satisfaction rating of affected people on land acquisition and
resettlement) and these will be monitored during implementation.
58. There is scope to engage citizens during project implementation by involving residents,
agencies and work units along the roads during construction. Feedback will be collected from
beneficiaries on project components, implementation, results, and how grievances in relation to
the implementation of the project are addressed. In addition, the feedback will also be monitored
through the results framework.
59. For emergency preparedness, during the rollout of the multi-hazard risk platform, the
project will explore other opportunities for public engagement, including local television
channels, radio and posters, and organized emergency drills and awareness campaigns targeting
specific segments of the population, as well as citizen engagement activities using technology
and social media based on the experiences from other countries. These aspects will be monitored
through the project reporting system.
F. Environment (including Safeguards)
60. Three environmental safeguards policies are applicable to the project, i.e. OP4.01
Environmental Assessment, OP4.04 Natural Habitats and OP4.11 Physical Cultural Resources.
The project is classified as Category B as per OP4.01. Environment Assessment Reports were
prepared by accredited EA consultants in accordance with national requirements and OP 4.01.
The EA Reports include: (i) EIA and Environmental Management Plan (EMP) for Component 1;
(ii) EIA and EMP for Component 2. Applicable World Bank Group Environmental, Health and
Safety Guidelines have been incorporated in the EAs. These environmental safeguards
documents comply with Bank safeguards requirements.
61. Key environmental issues addressed include: (i) impacts related to river water quality,
soil erosion, vegetation clearance, and disturbance due to earthworks during construction; (ii)
other construction impacts and social disturbance associated with wastewater, traffic blockage
and safety concerns, noise, dust and solid waste; (iii) operational impacts such as noise, dust, air
emissions, wastewater discharge, and waste management associated with road transportation and
water treatment; and (iv) operational risks associated with the water treatment plant. These
impacts can be adequately avoided, minimized and/or mitigated through measures developed
either in the project design or in the project EMP, and the Resettlement Action Plan (RAP).
62. Two rounds of public consultations were carried out during project preparation in the
form of questionnaires, focus group discussions, and public meetings. Information on EA
preparation was disclosed through public bulletins, local newspapers, and the internet. Pubic
concerns raised during these consultations have been incorporated into the project design, the
16
EMP and the RAP. The draft Environmental Assessment and Environmental Management Plan
were disclosed locally and on the websites of Ya’an and Chengdu Municipalities on January 27,
2016 and the final documents were disclosed in the World Bank Infoshop on April 13, 2016.
G. World Bank Grievance Redress (standard clause)
63. Communities and individuals who believe that they are adversely affected by a World
Bank supported project may submit complaints to existing project-level grievance redress
mechanisms or the World Bank’s Grievance Redress Service (GRS). The GRS ensures that
complaints received are promptly reviewed in order to address project-related concerns. Project
affected communities and individuals may submit their complaint to the World Bank’s
independent Inspection Panel which determines whether harm occurred, or could occur, as a
result of Bank’s non-compliance with its policies and procedures. Complaints may be submitted
at any time after concerns have been brought directly to the World Bank's attention, and Bank
Management has been given an opportunity to respond. For information on how to submit
complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit
http://www.worldbank.org/GRS. For information on how to submit complaints to the World
Bank Inspection Panel, please visit www.inspectionpanel.org.
17
PEOPLE’S REPUBLIC OF CHINA: Lushan Earthquake Reconstruction and Risk Reduction Project
Annex 1: Results Framework and Monitoring
Project Development Objective (PDO): The project development objectives are to improve access to disaster resilient infrastructure and strengthen risk reduction
in select municipalities of Sichuan Province and to improve emergency preparedness in Shimian County in Sichuan Province.
PDO Level Results
Indicators Core
Unit of
Measure
Baseline
(2016)
Cumulative Target Values Frequenc
y
Data Source/
Methodology
Responsibility
for Data
Collection 2017 2018 2019 2020 2021
Indicator One: Direct
project beneficiaries
(number), of which
female (percentage)
No. 0 0 50,000
(45%)
100,000
(45%)
200,000
(45%)
313,000
(45%) Annual
Construction
and Project
Monitoring
Reports,
Consulting
company,
UPPMO,
TPPMO
Indicator Two: Rural roads
rehabilitated incorporating
landslide risk reduction
measures
Km 0.00 0 10.00 20.00 35.00 35.00 Annual Construction
reports
Consulting
company and
UPPMO
Indicator Three: People in
urban areas provided with
improved access to roads
(% of which female)
Number
(1,000) 0 0
11
(45%)
56
(45%)
97
(45%)
100
(45%) Annual
Population
statistics of the
service area,
Construction
reports
Consulting
company and
UPPMO
Indicator Four: People in
urban areas provided with
improved drainage
conditions (% of which
female)
Number
(1,000) 0 0
10
(45%)
46
(45%)
80
(45%)
83
(45%)
Annual Population
statistics of the
service area,
Construction
reports
Consulting
company and
UPPMO
Indicator Five: Population
with improved access to
emergency shelters (% of
which female)
Number
(1,000) 0 0
12
(45%)
24
(45%)
55
(45%)
56
(45%)
Annual Population
statistics of the
service area,
Construction
reports
Consulting
company and
UPPMO
Indicator Six: Improved
capacity of local
Capacity
scorecar46.4 46.4 60 70 90 90
At project
completio
Population
statistics of the
Consulting
company and
18
authorities in Shimian
County to prepare for
multi-hazards.
d n service area,
Progress reports
Shimian
County
INTERMEDIATE RESULTS
Intermediate Result (Component One):
Indicator One: People
with improved access to an
all-season road (rural) (%
of which female)
Number
(1,000) 0.00 0
50
(45%)
100
(45%)
150
(45%)
150
(45%) Annual
Progress and
Construction
reports
Consulting
company and
TPPMO
Intermediate Result (Component Two):
Roads rehabilitated, Non
rural Km Km 0 5 33 45 45 Annual Construction
reports
Consulting
company and
UPPMO
Drainage pipelines
rehabilitated and
constructed
Km Km 0 10 64 80 80 Annual Construction
reports
Consulting
company and
UPPMO
Critical infrastructure with
upgraded level of disaster
resilience
Number 0 0 2 8 21 21 Annual
Construction
reports
Consulting
company and
UPPMO
Emergency shelters
constructed and equipped Number Number 0 2 4 12 12 Annual Construction
reports
Consulting
company and
UPPMO
Intermediate Result (Component Three):
Risk management system
developed and
operationalized in Shimian
County
Yes/No Text No No Yes Yes Yes Annual Progress reports
Consulting
company and
Shimian
County
Targeted system users
trained to operate the
multi-hazard system in
Shimian County
Number Number 0 0 30 60 120 Annual Progress reports
Consulting
company and
Shimian
County
Intermediate Result (Component Four):
Knowledge-sharing on
disaster risk management
provided by Shimian
County
Number
0 0 0 0 2 4 Annual Progress reports
Consulting
company and
Shimian
County
19
Indicator Name Description
PDO Level indicators
Indicator One: Direct project
beneficiaries (number), of which female
(percentage) [core sector indicator]
Number of people living in the area directly benefiting from the project investments.
Based on the assessment and definition of direct project beneficiaries, percentage of the beneficiaries are female.
Indicator Two: Rural roads rehabilitated
incorporating landslide risk reduction
measures.
Length of rural roads rehabilitated financed under the project Component 1, taking into consideration landslide risk
reduction, improved drainage, and increased road safety in structural design.
Indicator Three: People in urban areas
provided improved access to roads (% of
which female).
Number of beneficiaries in the urban population who have improved access to roads built in project areas under
Component 2.
Percentage of beneficiaries in the urban population who are female and have improved access to roads built in project
areas under Component 2.
Indicator Four: People in urban areas
provided improved drainage conditions (%
of which female).
Number of beneficiaries who are provided with improved drainage under the project in urban areas.
Percentage of beneficiaries who are female provided with improved drainage under the project in urban areas.
Indicator Five: Population with improved
access to emergency shelters (% of which
female).
Number of beneficiaries in the urban population with improved access to project financed evacuation sites and
emergency centers.
Percentage of beneficiaries in the urban population who are female with improved access to project financed
evacuation sites and emergency centers.
Indicator Six: Improved capacity of local
authorities in Shimian County to prepare
for multi-hazards.
Improved capacity of local authorities in Shimian County to prepare for responding to multiple hazards, including
earthquakes, floods, etc. measures against a scorecard prepared by the Shimian County authorities. The baseline is
derived from the scorecard. Intermediate Indicators
People with improved access to an all-
season road (rural) (% of which female).
Number of beneficiaries with improved access to all-season rural roads financed by Component 1.
Percentage of beneficiaries who are female and have access to rural all-season roads (rural) financed by the project
Component 1.
Roads rehabilitated, non-rural. (core sector
indicator)
Kilometers of all non-rural roads reopened to motorized traffic, rehabilitated, or upgraded under the project. Non-rural
roads are roads functionally classified in various countries as Trunk or Primary, Secondary or Link roads, or sometime
s Tertiary roads. Typically, non-rural roads connect urban centers/towns/settlements of more than 5,000 inhabitants to
each other or to higher classes of road, market towns and urban centers. Urban roads are included in non-rural roads.
Citizen Engagement
Affected people in project
areas satisfied with land
acquisition and
resettlement (% of which
female)
% 0 50
(45)
60
(45)
90
(45)
95
(45)
95
(45) Annual Progress reports
Consulting
company and
PPMOs
20
Drainage pipelines rehabilitated and
constructed.
Km of drainage pipelines rehabilitated and constructed under Component 2.
Critical infrastructure with upgraded level
of disaster resilience.
The number of critical infrastructure financed by the project where the flood protection standard and seismic codes will
be upgraded as follows: 1) Shimian - River Embankment: from baseline of 20 years to 50 years; 2) Yingjing -
Flood Discharge Canal: from baseline of 5 years to 20 years; 3) Mingshan - River Embankment: from baseline of
5 years to 50 years; 4) Lushan - Seismic protection standard used in structural design: from baseline of 7 to 8; 5)
Tianquan - Seismic protection standard used in structural design: from baseline of 7 to 8; 60 Yingjing - Seismic
protection standard used in structural design: from baseline of 7 to 8; 7 Yucheng - Seismic protection standard
used in structural design: from baseline of 7 to 8; 8 Mingshan - Seismic protection standard used in structural
design: from baseline of 7 to 8.
Emergency shelters constructed and
equipped.
Number of emergency shelters constructed and furnished with relevant equipment under Component 2.
Risk management system developed and
operationalized in Shimian County. Multi-hazard disaster risk management system developed and operationalized in Shimian County with respective sub-
systems for specific hazards and elements, such as risk monitoring, evaluation and communication of information.
Monitored steps would include: 1) mobilization of consultant; 2) consultation with potential target users; 3)
development of system; 5) operationalization of system.
Targeted system users trained to operate
the multi-hazard system in Shimian
County.
Number of targeted system users provided training and capacity building on the project financed DRM system in
Shimian County.
Knowledge-sharing on disaster risk
management provided by Shimian County.
Number of knowledge-sharing events organized by Shimian County on project financed disaster risk management
activities for other project counties and beyond.
Affected people in project areas satisfied
with land acquisition and resettlement (%
of which female)
Percentage of the affected people in project areas who are satisfied with land acquisition and resettlement.
Percentage of the affected people who are female satisfied with land acquisition and resettlement.
21
Annex 2: Detailed Project Description
CHINA: Lushan Earthquake Reconstruction and Risk Reduction Project
Component 1: Upgrading and Risk Reduction of Rural Roads
1. This component includes the upgrading and rehabilitation of three rural roads: Yinglu
Road in Qionglai County; Daohuo Road in Tianquan County; and Shixin Road in Yingjing
County.
2. Yinglu Road. The reconstruction of the six km Yinglu Road consists of: construction of
6.5-meter wide sub-base and base; 6-meter wide pavement and two 0.25-meter wide harden
shoulders; installation of a drainage ditch; construction of two bridges (total span of 40 meters);
and installation of 27 culverts (total length of 220 meters). It also includes: treatment of weak
foundations; installation of guardrail and traffic signs; construction of slope protection like
modifying slope profile, surface protection, retaining wall, rock anchor and; drainage channel
where the road alignment runs through an unstable geological area and is in the location of
fracture.
3. Daohuo Road and the connecting road. Construction of the 12.17 km Daohuo Road
comprises: construction of 8.5-meter wide base and sub-base; 6.5-meter wide pavement; two
one-meter wide hard shoulders; installation of a drainage ditch; construction of a big bridge with
span of 146 meters and three small bridges with total span of 148 meters; and 65 culverts (total
length of 675 meters). It also includes: treatment of weak foundations; installation of guardrail
and traffic signs; and the construction of slope protection, such as modifying slope profile,
surface protection, retaining wall, rock anchor, and drainage channel, where the road alignment
runs through an unstable geological area and is in the location of a fracture. To improve the
accessibility for two villages along Daohuo Road, a 1.24 km connecting road (4.5 m wide) will
be constructed.
4. Shixin Road. The reconstruction of the 16.55 km Shixin Road consists of: construction
of 6.5-meter wide sub-base and base; 6-meter wide pavement; two 0.25-meter wide hard
shoulders; installation of a drainage ditch; construction of two bridges with total span 44 meters;
and the installation of 33 culverts. It also includes: treatment of weak foundations; installation of
guardrail and traffic signs; and the construction of slope protection, such as modifying slope
profile, surface protection, retaining wall, rock anchor, and drainage channel, where the road
alignment runs through an unstable geological area and is in the location of fracture.
5. A road safety audit will be conducted before the preliminary design to identify potential
safety hazards for the urban roads and rural roads included in the Project. The safety audit
includes: field reviews under various conditions; audit analysis and report of findings; and
presentation of audit findings to the PMO and the design institutes carrying out the preliminary
design. Safety audits for construction and post construction road safety will also be conducted to
demonstrate improved traffic safety on the rehabilitated and newly constructed roads.
22
Component 2: Upgrading of Priority Urban and Emergency Infrastructure
6. This component supports a package of lifeline urban infrastructure, including emergency
evacuation shelters, rescue corridor roads at city level that connect to regional
highways/expressways, and access roads at the community level that link to evacuation facilities
in seven project counties/districts targeted by the State Level Lushan Earthquake Reconstruction
Master Plan. Physical Investments include: (i) reconstruction of 21 urban roads (total length of
23.9 km) and new construction of 28 urban roads (total of 20.9 km) both with associated civil
works for water supply, wastewater collection and drainage networks, and new construction of
12 bridges; (ii) construction of 12 emergency evacuation shelters with a total open space of
159,230 m2 for accommodating 58,800 residents in emergency events; (iii) upgrading 4.9 km of
river embankment to a higher standard of 50 year return period and 3.2 km of floodway to a
standard of 20 year flood events; and (iv) construction of a water treatment plant with an
installed capacity of 2,500m3/d.
7. Investments in Lushan County will concentrate on Lushan’s county seat of Luyang
Town, and will include: (i) reconstruction of eight urban roads (total length of 3.7 km, road
width of 11-20 m) and new construction of three roads (total length of 2.1 km, road width of 11-
12 m), both with associated civil works for water supply, wastewater collection, drainage
networks as well as construction of a bridge (372.06 m), and pavement rehabilitation for six
existing roads (total length of 5.8 km); (ii) construction of four Class III emergency evacuation
shelters (33,000 m2
of open space in all to accommodate 15,400 residents), fully equipped with
rescue tents, emergency medical and hygiene facilities, emergency supply of water/electricity,
waste treatment, and communication equipment.
8. Investments in Yucheng District will include: (i) new construction of a major 6.3 km
segment of a corridor road (width ranging from 19 m to 29 m) that connects the city’s old urban
area and new area to a regional expressway under construction, including pipeline works for
wastewater collection and drainage networks; (ii) construction of a Class II emergency
evacuation shelter (34,150 m2
of open space for accommodating 9,300 residents), fully equipped
with rescue tents, emergency medical and hygiene facilities, emergency supply of
water/electricity, waste treatment, and communication equipment.
9. Investments in Tianquan County will concentrate on Tianquan’s county seat of
Chengxiang Town, and will include: (i) reconstruction of six urban roads (total length of 2.2 km,
road width of 14-30 m) and new construction of nine roads (total length of 3.9 km, road width of
14-20 m), both with associated civil works for water supply, wastewater collection and drainage
networks; (ii) construction of two Class III emergency evacuation shelters (18,680 m2 of open
space in all to accommodate 10,800 residents), fully equipped with rescue tents, emergency
medical and hygiene facilities, emergency supply of water/electricity, waste treatment, and
communication equipment.
23
10. Investments in Baoxing County will concentrate on Baoxing’s county seat of Muping
Town and its neighboring town of Lingguan. Project investments include: (i) reconstruction of an
urban road (6.2 km, road width of 8-30 m) in Lingguan Town with associated civil works for
water supply, wastewater collection, drainage networks, as well as new construction of one
pedestrian evacuation corridor (two sections in total - 2.12 km long, 4.75 wide) in Muping Town;
(ii) 0.81 km of river embankment rehabilitation with a standard of 50 year return period for
floods; and (iii) construction of a water plant in Muping Town with an installed capacity of 2,500
m3/d and auxiliary water intake, transmission and distribution network.
11. Investments in Mingshan District will include: (i) new construction of six roads (total
length of 2.47 km, road width of 15-18 m) with associated civil works for water supply,
wastewater collection and drainage networks; (ii) construction of two emergency evacuation
shelters (one Class II and the other Class III, for a total open space of 29,300 m2 for
accommodating 9,300 residents), fully equipped with rescue tents, emergency medical and
hygiene facilities, emergency supply of water/electricity, waste treatment, and communication
equipment; and (iii) upgrading 2.3 km of river embankment along the town’s two major rivers
(Mingshan River and Huaixi River) from the current standard of a five year flood event to a 50
year flood event.
12. Investments in Yingjing County will concentrate on Yingjing’s county seat of Yandao
Town, and will include: (i) reconstruction of two urban roads (total length of 3.78 km, road
width of 7-10.5 m) and new construction of two roads (total length of 3.78 km, road width of 12-
16 m), both with associated civil works for water supply, wastewater collection and drainage
networks; (ii) construction of a Class III emergency evacuation shelter, (7,000 m2 of open space
to accommodate 4,000 residents), fully equipped with rescue tents, emergency medical and
hygiene facilities, emergency supply of water/electricity, waste treatment, and communication
equipment; (iii) upgrading two floodways (3.2 km combined) from the current standard of a 5
year flood event to a 20 year flood event with associated pipeline works for wastewater
collection.
13. Investments in Shimian County will concentrate on Shimian’s County seat of Miancheng
Town, and will include: (i) reconstruction of three urban roads (total length of 1.77 km, road
width of 8-22.2 m)and new construction of 7 roads (total length of 6.61 km, road width of 6.5-
17.5 m), both with associated civil works for water supply, wastewater collection and drainage
networks, as well as new construction of four bridges; (ii) construction of two emergency
evacuation shelters (one Class II and the other Class III, for a combined 37,100 m2 of open space
to accommodate 10,000 residents), fully equipped with rescue tents, emergency medical and
hygiene facilities, emergency supply of water/electricity, waste treatment, and communication
equipment; and (iii) upgrading 1.7 km of river embankment from the current standard of a 20
year flood event to a 50 year flood event.
14. The road safety audit specified for Component 1 will also be conducted before the
preliminary design of road infrastructure included in Component 2.
Component 3: Technical Assistance for Strengthening of Disaster Management and
Preparedness in Shimian County
24
15. The primary objective of this component is to strengthen the capacity of the county’s
emergency response services to manage threats posed by debris/mudflows, landslides (including
rock falls), earthquakes, floods and extreme weather events and forest fires through the
establishment of a cutting edge multi disaster risk management platform.
16. The proposed DRM system will be piloted in Shimian town and Caoke Township, and
will build on improving and integrating the existing flood, meteorological, seismic and geo-
hazard observation and warning systems established in Shimian County. The proposed system
will access data and information, which is compiled and analyzed at the county-level, as well as
municipal, provincial and national level (e.g., hydro-met data from stations from neighboring
counties, global and regional high-resolution numerical predictions from the weather centers, and
access flood hazard analysis and flood modeling).
17. The system would comprise the following key-elements: (i) monitoring and early
detection; (ii) inventory of risks and impact modelling; (iii) early warning and dissemination; (iv)
emergency response coordination; (v) post event assessment and validation; and (vi) disaster risk
reduction planning. Along with these six elements, two databases are needed, one for monitoring
and early detection and the other for existing risk and post disaster assessment. A flowchart of
the system is shown in Figure 1.
Figure 1. DRM System Flow Chart
Monitoring and early detection will be improved through strengthening and
expanding the existing flood, landslide, meteorological and seismic monitoring and
observing networks. This will include in particular: upgrading and expanding the
geographic coverage and appropriate distribution of telemetered automatic rain
gauges and weather stations; video observation and other torrential hazard detection
sensors; upgrading data communication links from ground observation stations; and
ensuring redundancy and robustness.
Risk Assessment and Impact Modeling will include the establishment of a
comprehensive and detailed risk exposure inventory of assets in the target areas, asset
fragility functions, and hazard-specific impact models. The risk assessment will
25
evaluate and estimate the intensity and degree of disaster-inducing factors, and
conduct quantitative assessments of possible consequences.
Early warning and dissemination will include the development of standard operating
procedures and dissemination protocols, when hazard-specific trigger levels are
exceeded.
Coordinated Emergency Response includes emergency management and contingency
planning through an effective incident management system, which helps direct
emergency rescue and resource scheduling. Emergency response coordination needs
to mobilize and direct resources of each relevant department rapidly and effectively
under a unified leadership/coordination and allow for quick decision making, adjusted
to changing local conditions.
Protocols and tools for Post Event Assessment and Validation will be developed to
ensure constant improvement of the system.
The DRM platform is also expected to support Shimian county authorities in long-
term disaster risk reduction planning by identifying critical/vulnerable areas and
specific assets that require investments for disaster prevention and risk reduction.
18. The design of the DRM system will be based on a detailed Needs and System
Requirements Assessment (NSRA), including a detailed study of existing risk modeling
platforms and tools, as well as early warning systems, e.g., the Shanghai Multi-Hazard Early
Warning System. NSRA will outline the technical specifications of a modular system and its
key-components / priority functionality, with costing and specification of required for: (i)
consulting services for development, integration, customization and commissioning of the
systems; (ii) goods and non-consulting services, including ICT hardware, software, data and
monitoring equipment; and (iii) capacity building and maintenance needs to be procured under
the project. The NSRA will leverage international, national and local expertise and participation,
and is expected to cost 10-15 percent of the total cost of the system.
19. The design and implementation of the Shimian DRM system will be targeted to the needs
of the emergency response office, meteorological bureau, disaster prevention bureau, water
affairs bureau, land resources bureau, civil affairs bureau, flood and drought prevention
headquarters, as well as Shimian County and Caoke township governments.
Component 4: Project Management and Capacity Building
20. This component will finance survey and detailed designs for urban infrastructure in
Ya’an Municipality from the loan. Detailed design for all other activities will be financed by
counterpart funds. For activities managed by UPPMO, loan proceeds will finance project
management, engineering supervision and consulting services, external environmental and
resettlement monitoring, hiring of procurement agents, training and workshops. Counterpart
funds will finance these tasks for activities managed by TPPMO.
26
Annex 3: Implementation Arrangements
CHINA: Lushan Earthquake Reconstruction and Risk Reduction Project
1. Policy-level and implementation oversight. A Provincial Leading Group (PLG) will
provide high-level policy direction for the project. The Lushan Strong Earthquake Recovery
Committee of Sichuan Province established in May 2013 in accordance with ‘the Notice by the
General Office of Sichuan Provincial Committee of Central Party Committee and the General
Office of People’s Government of Sichuan Province on Establishing ‘4.20’ Lushan Strong
Earthquake Recovery Committee of Sichuan Province’ (CHUANWEITING [2013] No.24) will
act as the PLG. This Committee provides direction for all the project implementing entities and
relevant agencies included in Lushan Earthquake Recovery Master Plan. A Municipal Leading
Group (MLG) will be responsible for leading and coordinating the relevant agencies and its
subordinate counties/districts in the Ya’an City. The existing Leading Group for the World Bank
Funded Lushan Earthquake Recovery and Risk Reduction Project in Ya’an City established by
the Project Implementing Entity in December 2014 in accordance with the Notice by the
People’s Government of Ya’an City (YAFUHAN [2014] No.254), will act as the MLG.
2. Project coordination and management: Two provincial level Project Management
Offices (PPMOs) are responsible for guiding and supervising implementation in close
cooperation with Chengdu and Ya’an municipalities, SPDRC and the SPFD). The Sichuan
Provincial Transportation Department Highway Bureau (TPPMO), housed under the Sichuan
Provincial Transportation Department (SPTD), will be responsible for Component 1. The
Sichuan Urban Environment Project Office (UPPMO), housed in Sichuan Provincial Department
of Housing and Urban Construction (SPDHUC), will be responsible for Components 2 and 3.
Component 4 is the joint responsibility of the two PPMOs.
3. City/County/District Level PLGs, Sub-PMOs and Project Implementing Units
(PIUs). Ya’an municipality has established a city-level PMO to coordinate the project
implementation in the eight counties/districts. Each of the eight project cities/counties/districts
have established local level project leading groups (LPLG) chaired by the respective
city/county/district governors or vice governors to provide local-level policy direction for project
implementation within their respective jurisdictions. They have also made necessary
arrangements for setting up respective City/County/District Project Management Offices (Sub-
PMOs, see Table 1) and Project Implementation Units (PIUs). The coordination and
implementation arrangements at the project city/county/district level for different sub-project
activities are shown in Table 1 below.
27
Table A3.1 Institutional Arrangements for Project Preparation and Implementation
Component 1 Activities under Rural PMO
City, County
or District Sub-PMOs PIA
Qionglai City,
Chengdu
Municipality
Chengdu Qionglai Municipal
Transportation Bureau
Qionglai Highway Maintenance Team
under Qionglai Municipal Transportation
Bureau
Tianquan
County, Ya’an
Municipality
Ya'an Transportation Bureau Tianquan highway maintenance team under
Yingjing County Transportation Bureau
Yingjing
County, Ya’an
Municipality
Ya'an Transportation Bureau Yingjing highway maintenance team under
Yingjing County Transportation Bureau
Component 2 Activities under Urban PMO
County or
District Sub-PMOs PIA
Lushan County Ya’an Municipality Housing and
Construction Bureau
Lushan County Housing and Construction
Bureau
Yucheng
District
Ya’an Municipality Housing and
Construction Bureau
Yucheng District Housing and
Construction Bureau
Tianquan
County
Ya’an Municipality Housing and
Construction Bureau
Tianquan County Housing and
Construction Bureau
Baoxing County Ya’an Municipality Housing and
Construction Bureau
Baoxing County Housing and Construction
Bureau
Mingshan
District
Ya’an Municipality Housing and
Construction Bureau
Mingshan District Housing and
Construction Bureau
Yingjing
County
Ya’an Municipality Housing and
Construction Bureau
Yingjing County Housing and
Construction Bureau
Shimian County Ya’an Municipality Housing and
Construction Bureau
Shimian County Planning and Construction
Bureau
Shimian Emergency Office
28
Figure 2. Schematic Overview of Implementation Arrangements
4. The PPMOs are responsible for: (i) overall project coordination, management and
monitoring; (ii) annual budget preparation; (iii) progress reporting to Sichuan Provincial
Government and the Bank; (iv) interagency coordination and procurement support; and (v)
training and capacity-building facilitation. Ya’an PMO is responsible for: (i) project-wide quality
assurance; (ii) project-wide progress management; (iii) progress reporting to the PPMOs.
5. Project Management. Project counties/districts are responsible for the preparation of
bidding documents and obtaining clearances from the respective bureaus. The respective
provincial level PMO will manage the procurement process by inviting bids, and evaluating bids
jointly with project counties/districts. Project counties/districts will execute the contracts. A firm
of consultants will support the provincial level PMOs in overall project management, including:
(i) reviews of detailed engineering designs and bidding documents; (ii) construction supervision
and contract management; and (iii) monitoring and evaluation. TPPMO will submit semi-annual
reports to UPPMO, which will consolidate results and submit to the Bank.
6. Construction Supervision and Safeguards Monitoring. Consultants hired for project
management and supervision will be responsible for daily on-site construction supervision, in
addition to: (i) overall quality, safety and progress supervision; (ii) training contractors and
consultants; (iii) assisting in project progress report preparation; and (iv) coordination with
external consulting services. The PPMOs will engage consultants for external monitoring of
safeguards implementation and provide semi-annual reports.
7. Ownership, management of assets, and on-lending arrangements. The proposed loan
will be made to the People’s Republic of China, which will on-lend the loan proceeds to Sichuan
Province. Sichuan Province will in turn on-lend the loan to the project county governments on
the same terms and conditions as the Bank loan to China; the county level governments will be
the end-borrowers. Proceeds from the World Bank loan will be passed on by the governments to
UPPMO
City/County/District LG
PIU
Sub-PMO
City/County/District LG
PIU
Sub-PMO
City/County/District LG
PIU
Sub-PMO - - - - - -
- - - - - -
TPPMO
Ya’an
29
the operating implementing agencies as equity grants. All implementing agencies will enter into
subsidiary agency agreements with their county level governments.
Table A3.2: Implementing Agencies, Ownership, O&M and Debt Service Obligations
No Location Project Implementation Agency Ownership of
assets
O&M of assets Debt service
obligations
Component 1-Upgrading and Risk Reduction of Rural Roads
1. Qionglai City,
Chengdu
Municipality
Qionglai Highway Maintenance
Team under Qionglai Municipal
Transportation Bureau (IA)
IA IA Qionglai City
2. Tianquan
County
Tianquan Highway Maintenance
Team under Tianquan Municipal
Transportation Bureau. (IA)
IA IA Tianquan
County
3. Yingjing
County
Yingjing highway maintenance
team under Yingjing County
Transportation Bureau (IA)
IA IA Yingjing
County
Component 2 – Upgrading of Priority Urban and Emergency Infrastructure
4. Lushan County Lushan County Housing and
Construction Bureau. (IA)
IA IA Lushan
County
5. Yucheng
District
Yucheng County Housing and
Construction Bureau. (IA)
IA IA Yucheng
District
6. Tianquan
County
Tianquan County Housing and
Construction Bureau (IA)
IA IA Tianquan
County
7. Baoxing
County
Baoxing County Housing and
Construction Bureau (IA)
IA IA Baoxing
County
8. Mingshan
District
Mingshan District Housing and
Construction Bureau (IA)
IA IA Mingshan
District
9. Yingjing
County
Yijing County Housing and
Construction Bureau (IA)
IA IA Yingjing
County
10. Shimian
County
Shimian County Planning and
Construction Bureau (IA)
IA IA Shimian
County
Component 3- Technical Assistance for strengthening of Disaster Management and Preparedness in
Shimian County
11. Shimian
County
Shimian Emergency Office (IA) IA IA Shimian
County
8. Institutional arrangements for Component 3. A leader group and office has been
established to ensure the coordination and implementation of Component 3. The Deputy County
Mayor acts as the head of the local-level project leadership group. Group members include
related personnel of the Emergency Response Office, Meteorological Bureau, Disaster
Prevention Bureau, Water Affairs Bureau, Land Resources Bureau, Civil Affairs Bureau, Flood
and Drought Prevention Center, as well as the heads of Shimian County and Caoke township
governments. The leader group office is set up in the Emergency Response Office of Shimian
County government, and is responsible for daily communication and coordination of the activity.
30
Figure 3. Component 3 Organization Structure
9. The Emergency Response Office is responsible for the technical implementation of the
activity and will sign contracts, which have been prepared with the help of the bidding
agency/UPPMO. The Emergency Response Office is coordinating and facilitating inputs from
the county and other departments and reports regularly on progress to Sichuan Province Urban
Construction and Environmental Protection Office and the activity leadership group. It will
appoint personnel for project management and implementation, and will contract the services of
two consulting firms to assist with: (i) needs assessment and system design, including drafting of
TORs/technical specifications and bidding documents for consulting services, non-consulting
services, data and equipment to be procured under this activity; and (ii) implementation of the
system, including systems development and integration, data acquisition, installation of
monitoring equipment, establishment of disaster control center and installation of ICT
hard/software, commissioning of the system and user training.
Financial Management, Disbursements and Procurement
Financial Management
10. Funding sources for the project include the Bank loan and counterpart funds. The loan
agreement will be signed between the World Bank and MOF; the on-lending agreement will be
signed between MOF and SPFD (on behalf of Sichuan Provincial Government), then in turn
between SPFD and finance bureaus of Shimian, Lushan, Baoxing, Tianquan and Yingjing
counties. For Ya’an Yucheng, Mingshan and Qionglai, the on-lending agreement will be signed
by Ya’an Municipal Finance Bureau and Chengdu Municipal Finance Bureau respectively.
11. Financial Management Risks: The FM assessment was conducted for the two PPMOs
and all the PIUs and concluded that with the implementation of the proposed actions, project’s
FM arrangements satisfy the Bank’s requirements under OP/BP 10.00. Overall, the residual FM
risk after taking into account mitigation measures expected to be completed by effectiveness is
31
rated as Moderate. The FM capacity assessment identified the following principal risks: (a) two
parallel arrangements – activities under the urban infrastructure and rural transport will be
carried out and managed by two parallel institutional systems and two parallel FM systems will
be set up at the provincial level. This poses a risk to the project to ensure that the project is
implemented in a timely manner and that Ya’an City fulfills its counterpart funds commitment
during implementation; (b) most of county-level PIUs (especially three county PIUs under
Component 1) are new to the Bank operations, therefore are not familiar with the Bank FM
policies and requirements; (c) counterpart funding from local county government may be not in
place as committed due to low fiscal capacity and; (d) delays in Bank loan disbursement, project
accounting and financial reporting could occur, in part caused by inefficient working and/or
document flows between the PPMOs, PIUs and finance departments.
12. Risk Management: Mitigation measures to address the above-mentioned risks are as
follows: (i) PLG and SPFD should closely coordinate the implementation of two parallel parts;
(ii) Project FM manual (FMM) to specify the roles and responsibilities of each party as well as
the working procedures and documents flow among the parties in FM/disbursement
arrangements; (iii) extensive workshop and/or hands-on guidance will be continuously provided
by two PPMOs with support of SPFD in addition to FM training to be provided by the Bank; and
(iv) counterpart funding demands should be formulated in a timely manner in government’s
annual fiscal budget.
13. Audit Arrangements. Sichuan Provincial Audit Office (SPAO) will be the project
auditor. Two annual audit report on the two sets of project financial statements for urban
infrastructure and rural transport respectively will be due to the Bank within 6 months after the
end of each calendar year. The audit reports and audited financial statements will be made
publicly available on the websites of the World Bank and SPAO.
14. Budget. The annual project implementation plan, including the funding budget and
resources, will be prepared by the two PPMOs and their PIUs respectively based on their annual
work program. SPFD will review the annual budgets and release project funds based on
implementation progress. Budget variance analysis will be conducted regularly to enable timely
corrective actions to be taken.
15. Funds Flow. One Designated Account (DA) of the Bank loan will be opened for both
urban infrastructure and rural infrastructure - and managed by SPFD. Disbursement requests will
be prepared by each PIU, reviewed by the county or municipal finance bureaus, and then passed
to the Ya’an PMO and PPMOs for review and final approval by SPFD. Bank loan proceeds will
be disbursed from the DA in SPFD to municipal/county finance bureaus and then from
municipal/county finance bureaus directly to contractors.
16. Accounting and Reporting. The administration, accounting, and reporting for the
project will be set up in accordance with Circular #13: “Accounting Regulations for World
Bank-financed Projects” issued in January 2000 by the MOF. The PIUs and PPMOs will
manage, monitor and maintain project accounting records in accordance with Circular 13 for
activities they execute. The PPMOs will consolidate project financial statements of all the PIUs
under their own part and incorporate its transactions and DA statements maintained by SPFD
audit to prepare the consolidated project financial statements. SPFD will maintain two sub-
32
ledger accounts for urban infrastructure and rural transport components individually under the
DA to record receipts and uses of the loan proceeds and other related transactions. SPFD will
prepare two DA statements for urban infrastructure and rural transport component respectively
on semi-annual and annual basis and provide them to the two PPMOs for their preparation of
consolidated project financial statements in a timely manner. The unaudited semi-annual project
financial reports will be prepared and furnished to the Bank by the PPMOs as part of the
Progress Report no later than 60 days following each semester (the due dates will be August 31
and February 28).
17. Internal Control. The related accounting policy, procedures and regulations have been
issued by MOF and will be followed by all the PIUs. Internal control procedures, including
segregation of duties, review, approval, and reporting procedures, as well as the safeguard of
assets, are documented in the project financial management manual.
Disbursement
18. Four disbursement methods are available to the project: advance, reimbursement, direct
payment and special commitment. Disbursement procedures are/will be documented in the
Disbursement Letter issued by the Bank. The Bank loan would disburse against eligible
expenditures (taxes inclusive) as in the table below:
Table A3.3 Disbursement Categories and Percentages
Category
Amount of the Loan
Allocated
(expressed in USD)
Percentage of Expenditures to
be Financed
(inclusive of Taxes)
(1) Goods, works, non-consulting
services, consultants’ services,
Training and Workshops, and
Incremental Operating Costs for
Parts 2, 3, and 4 of the Project
269,300,000 100%
(2) Goods, works, non-consulting
services, consultants’ services, and
Training and Workshops for Part 1
of the Project
29,950,000 100%
(3) Front-end Fee 750,000 Amount payable pursuant to
Section 2.03 of the Loan
Agreement in accordance with
Section 2.07 (b) of the General
Conditions
(4) Interest Rate Cap or Interest Rate
Collar premium
0 Amount due pursuant to Section
2.08(c) of the Loan Agreement
TOTAL AMOUNT 300,000,000
33
19. The Bank loan proceeds and counterpart funds will co-finance each component but for
different activities and contracts. The main direct investments for civil works, goods,
consultants’ services, training and workshops will be 100 percent financed by the Bank loan. All
the Bank financed contracts and non-contracted activities will be included in the procurement
and activity plans submitted by the PPMOs and approved by the Bank. For the rural
infrastructure, the general costs for design, investigation, engineering supervision, some labor
contributions as well as land acquisition and resettlement etc. will be financed by counterpart
funds.
Procurement
20. Procurement Risks and Risk Management. The procurement capacity assessment of
two PPMOs and the PIUs/Employers at the city and county levels concluded that the
procurement risk is Moderate. TPPMO has rich experience managing procurement under the
ADB-financed Emergency Assistance for Wenchuan Earthquake Reconstruction Project. The
three PIUs and Employers/project owners under Component 1 have no procurement and contract
management experience under Bank or ADB financed projects; however, they have rich
experience in procuring and managing contracts financed by domestic funds. UPPMO has
extensive experience in operating Bank -financed projects for about 20 years. The PIUs in
Baoxing, Lushan and Shimian counties are also involved under the Wenchuan Earthquake
Recovery Project. The other four PIUs have no Bank or ADB financed project experience, but
they have rich experience in procuring and managing projects financed by domestic funds. These
seven PIUs will also act as the Employers/project owners. Key risks identified include: (a)
possible inaccurate cost estimates based on government unit rates; (b) possible delays and/or
non-compliance because of differences between Bank procurement guidelines (revised July
2014) and domestic procurement practice; and (c) inadequate contract management practices,
such as contract period expired without extension, unjustified variations, inappropriate new unit
rate or price etc.
21. Measures to mitigate procurement risks have been agreed as follows:
(a) Two procurement agents with procurement experience in projects financed by the Bank
and other multilateral financing institutions will be respectively hired by the UPPMO
and TPPMO to assist in procurement of goods, works and non-consulting services
under International Competitive Bidding (ICB) and National Competitive Bidding
(NCB), as well as selection of consultants for consulting services. The agents will
prepare commercial parts of bidding documents and Requests for Proposals, publish
Specific Procurement Notices, host bid opening, organize bid evaluation, and prepare
bid evaluation reports and contracts.
(b) A project management consulting firm will be hired by UPPMO to assist in reviewing
bidding documents, including technical specifications, bills of quantities, and designs
for all civil works. The firm will also assist the UPPMO in contract management and
managing and coordinating activities during construction.
34
(c) The UPPMO and TPPMO as well as all the PIUs have sent designated procurement
staff to attend procurement training before pre-appraisal, and will continue to send
procurement staff and other key staff to attend workshops on procurement and contract
management under Bank-financed projects throughout project implementation.
(d) The Employer, project management consultant and/or the Procurement Agent’s
representatives will be included in the bid evaluation committee. The provincial PMOs’
representatives would be present and witness the bid evaluation, who will provide an
introduction to the Bank’s policies on the evaluation and clarifications as well as the
main requirements in the bidding documents before the evaluation starts. If the
evaluation experts are identified to have no knowledge or experience in procurement
under the Bank or other International Financial Institutions (IFIs) financed projects,
they should be trained on the site before the evaluation.
22. Procurement Guidelines. Procurement for the project will be carried out in accordance
with: World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services
under IBRD Loans and IDA Credits & Grants” dated January 2011 (revised July 2014);
“Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits &
Grants by World Bank Borrowers” dated January 2011 (revised July 2014); and the provisions
stipulated in the legal agreement.
23. Procurement Plan. The UPPMO and TPPMO have developed a consolidated
Procurement Plan dated May 30, 2016, acceptable to the Bank, for those activities to be procured
by the PPMOs. It will be available in the two PPMOs, and will also be available in the Project’s
database and in the Bank’s external website. The Procurement Plan will be updated, reviewed
and agreed with the Bank annually, or as required, to reflect project implementation needs.
24. Procurement and Selection Methods and Prior Review Thresholds. The table below
indicates the procurement and consultant selection methods and prior review thresholds for
goods, non-consulting services, works, and consulting services.
Table A3.4: Thresholds for Procurement Methods and Bank Prior Review
Expenditure
Category
Contract
Value (US$) Procurement Method Bank Prior Review
Goods/IT
Systems and
Non-Consulting
Services
≥ 10 million ICB All ICB contracts
>=500,000 - <
< 10 million
NCB
Remarks: Where goods are
not normally available
from within China, the
method of procurement
will be ICB even if the
contract value is less than
US$10 million.
First NCB goods contract by each PIU
irrespective of value and all contracts >= USD
3 million
< 500,000 Shopping None
35
Expenditure
Category
Contract
Value (US$) Procurement Method Bank Prior Review
N/A DC All DC contracts
Works/ Supply
& Installation
≥ 40 million ICB All ICB contracts
>=500,000 - <
40 million
NCB First NCB works contracts by each PIU
irrespective of value and all contracts ≥
US$15 million.
< 500,000 Shopping None
N/A DC All DC contracts
Consultants
≥ 300,000 QCBS, QBS Firms: First contract for each selection
method and all contracts ≥ US$1 million;
Firms: All SSS contracts >= USD 100,000;
Individual Consultant: Only in Exceptional
Cases;
SSS for individual consultant: ≥ US$50,000
< 300,000 QCBS, QBS, CQS
N/A SSS
N/A IC
Notes: ICB: International Competitive Bidding
NCB: National Competitive Bidding
DC: Direct Contracting
QCBS: Quality- and Cost-Based Selection
QBS: Quality-Based Selection
CQS: Selection Based on the Consultants’ Qualifications
SSS: Single Source Selection
IC: Individual Consultant selection procedure
NA: Not Applicable
Social Safeguards
25. Involuntary resettlement: The project will lead to about 1,241 households (close to
4,554 affected people) being affected by land acquisition and house demolition, with
resettlement in 13 towns in six counties and districts. Of which, 215 households (869 people)
will be affected by both land acquisition and house demolition. It will require permanent
acquisition of about 1,311 mu (87 ha) of land, including 745 mu (50 ha) arable land. In total, the
project will impact 905 households (about 3,151 people) affected by economic resettlement due
to loss of some land, of which, 63 households with 242 people will end up losing more than 20
percent of their arable land. Furthermore, the land acquisition will result in 1,059 landless
farmers whose arable land will meet the threshold of less than 0.3 mu. These farmers will require
social security resettlement that will be paid by 60 percent from the Government budget as
pension premium, and 40 percent will be paid by the farmers themselves. The affected farmers
will have to transfer from rural hukou to urban hukuo to take advantage of the social welfare
benefits. The significance of land loss and land-related income loss is marginal as all the affected
farmers will lose less than 10 percent of their existing land and less than 4 percent of land-related
income. The project may also need to acquire additional land during project implementation.
Furthermore, the project will remove 40 graves and a number of trees and some other special
facilities such as power lines and poles. The scale of the proposed land acquisition and
resettlement are manageable and negative impacts will be mitigated.
26. The project will result in the house demolition of 85,503 sqm, demolition of 1,165 sqm of
simple workshop shelters of two private firms in Tianquan and Shimian counties, and 14,668
sqm of other structures such as fence walls and auxiliary facilities. In addition, the project will
require some 170 mu of land for temporary occupation in Qionglai, Tianquan and Yingjing
36
counties. The project will remove 44 graves and a number of trees. Close to 336 households
(about 1,403 people) are affected by physical resettlement due to house demolition. Under
Component 2, 286 households will be resettled in six resettlement sites in related project
counties and districts. Under component 1, 50 households have opted to take cash compensation.
Most of the resettlement sites have commenced construction and will be ready for the resettled
people to move in by 2016.
27. Most of the resettlement sites have commenced construction and will be ready for the
resettled people to move in by 2016. A detailed due diligence review of these sites has
been completed in April 2016. The due diligence review shows that the resettlement and
compensation is in compliance with the government regulations and the World Bank OP/BP 4.12
policy requirements. There are only two legacy issues that need to follow the schedule of the
Government resettlement’s process. These issues have been included as part of the monitoring
and evaluation of the resettlement process during implementation. Monitoring and evaluation
measures include: i) monitoring of the Government’s budget and expenditure on sharing
contributions to social security for the landless farmers affected by the construction of the two
resettlement sites in Yucheng District and; ii) for the displaced households, a transitional
housing arrangement following the receipt of compensation until the final move that is scheduled
in 2017. The monitoring and evaluation report of the project shall cover these pending issues
until they are fully resolved.
28. To address land acquisition and resettlement, a consolidated RAP has been prepared for
all project activities under Components 1 and 2 respectively. In addition, a RPF has been
prepared to address unanticipated future land acquisition and resettlement. The PPMOs have
each hired an experienced professional consulting team to address issues of land acquisition,
compensation and livelihood restoration, and resettlement for project-affected people and
communities.
29. Linked activities. The construction of sewer and water supply facilities have no linked
activities. Under Component 1 on rural roads, two sections of Ying Lu Road (total length of 36
km) in Sanhe Town of Yingjing County have been identified as linked activities which will be
carried out under two local government projects. These linked sections will permanently acquire
about 225 mu of land and 93 mu for temporary use. The sections will affect about 109
households (about 327 people), of which only seven households with 24 affected people will lose
more than 20 percent of land. The road sections do not require any demolition of residential
houses, however 4 graves will be removed from the project sites. The land acquisition and
resettlement under these linked activities are included in the RAP and will be addressed and
monitored during project implementation.
30. Key principles, considerations and salient activities in project design and RAP
preparation included:
a. Acquisition of land and other assets, and relocation of people will be minimized as much
as possible.
b. A socio-economic survey will be conducted to determine baseline conditions, especially
of project affected persons.
37
c. Compensation for houses or other properties will be determined at full replacement
value.
d. Compensation will be provided to all project affected persons, including those who lack
house registration or other documents, such as legal documents.
e. Basic infrastructure and service facilities will be provided in areas where project affected
persons will be resettled.
f. Affected persons will be consulted during planning for acquisition of land and other
assets, and provision of rehabilitation.
g. Financial and physical resources for resettlement and rehabilitation will be made
available when required.
h. Special consideration will be given to vulnerable groups.
i. Institutional arrangements will be established to ensure effective and timely design,
planning, consultation and implementation of the RAP.
j. Effective and timely supervision, monitoring and evaluation of project implementation
will be executed.
31. Compensation Standards. Land acquisition includes land compensation, a resettlement
subsidy, and compensation for standing crops. The land acquisition fund is calculated based on
land output value based on local regulation. The compensation rates for structures are determined
based on their replacement costs.
32. Implementation Arrangements. A multi-level organization has been established to
implement the RAPs. An independent and experienced external monitor will be hired for
monitoring resettlement implementation and livelihood restoration. The PPMO will be
responsible for monitoring and will provide semi-annual monitoring reports to the Bank. Details
of staffing and their responsibilities are provided in the RAPs.
33. Budget and Funding Arrangement. The Borrower will allocate sufficient budget from
counterpart funding for resettlement under the project.
34. Public Participation. Project-affected persons and organizations were informed about
the project and its impacts in meetings during the preparation of the RAPs. Comments and
recommendations received from these meetings have been incorporated in the RAPs and the
feasibility studies. Public participation will continue during implementation of RAPs. Project
information will be provided to affected persons through television, newspapers, bulletins and
posters. The RAPs will be summarized in a resettlement information booklet and distributed to
affected households.
35. Grievance Redress. A mechanism has been established for grievance redress.
Grievances can be filed both orally and in writing. Starting at the village and neighborhood
committee level, grievances can be elevated to the county/district/city/provincial level if the
complainants are not satisfied with the resolution at the lower level. The affected people may
also file cases in court if they are not happy with the resolution by project authorities. All
grievances and their resolution will be recorded. The grievance redress mechanism has been
38
disclosed to the local population and will be further disseminated through the Resettlement
Information Booklet.
36. Gender: The aftermath of a disaster can be an opportunity to empower women, giving
them more voice in relief, reconstruction and disaster risk management in general. Gender
considerations have been integrated in project design, social assessment and RAP preparation
and implementation. Experience in previous disasters in South East Asia shows that women and
girls are often at higher risk than men and boys, particularly when they have limited information
about the evacuation routes and access to shelters, as well as due to their vulnerable socio-
economic status with limited income options. Women’s needs for road lighting and safety,
footpaths, rest seats and transport signs have been considered in project design and will be
addressed during project implementation.
37. In the case of Component 1, experience shows that women can play an important role,
particularly on issues related to road access, service provision, road safety, contracting and work
opportunities (female owned businesses, etc.). For Component 2 consultations with women can
address concerns in evacuation shelter design, making them more accessible and safe for
vulnerable women (pregnant, maternity, and disabled women), and improve the reach of early
warning communications to the entire community. The number of toilets for women and men
and need for privacy for pregnant women and for breastfeeding in emergency shelters will be
addressed by the project. For Component 3, risk mapping will take risk perceptions of different
segments of society into consideration. In public consultations on land acquisition and
resettlement, both men and women will continue to be adequately consulted. Compensation and
resettlement support will be provided equally for both men and women. Equal participation and
gender responsiveness will be reflected in training and other capacity building activities. Gender
disaggregated information will be included in annual progress reports and is embedded in the
project Results Framework.
38. Citizen Engagement. Citizen engagement is an integral part of project design. As part of
the social assessment, intensive public consultations were conducted in accordance with Bank
OP4.01 and OP4.12. Consultation included a combination of public opinion surveys, meetings
with local residents (including no less than 30 percent women) and consultation meetings with
the general public, including vulnerable people, key groups of people engaged in road
construction, transport and disaster reduction and management. Consultations will be continued
during project implementation with residents, agencies and work units along the roads and in
communities at project sites. Information about the project, potential social impacts, and planned
mitigation measures have been and will continue to be shared with the public during
consultations.
39. The main concerns and suggestions from the public include: mitigation of construction
noise (particularly night time construction); dust and gas emissions; proper access roads; lighting
and safety; convenient traffic lights and signs; selection of locations of major emergency sites;
efficient emergency access for hospitals, schools and concentrated residential sites, etc. These
concerns have been addressed in the RAPs and RPF, and in the project FSR. Relevant indicators
of citizen engagement have been included in the Results Framework.
39
40. The project will explore opportunities for public engagement through local television
channels, radio and posters, and organized emergency drills and awareness campaigns targeting
specific segments of population, as well as use of technology and social media for risk mapping
and disaster impact feedback. One citizen engagement indicator has been included in the Results
Framework: (i) satisfaction rating of affected people on land acquisition and resettlement.
41. Ethnic Minorities. The social assessment did not find any ethnic minorities in the project
counties that trigger Bank OP4.10 on Indigenous Peoples.
Environment
42. Three environmental safeguards policies are applicable to the project, i.e., OP4.01
Environmental Assessment, OP4.04 Natural Habitats and OP4.11 Physical Cultural Resources.
The project is classified as Environment Category B as per OP4.01.
43. Environmental Assessment. Environment Assessment Reports have been prepared by
accredited EA consultants in accordance with national requirements and the World Bank’s OP
4.01. The EA Reports include: (a) EIA and EMP for Component 1; (b) EIA and EMP for
Component 2. Applicable World Bank Group Environmental, Health and Safety Guidelines have
been incorporated into the EA. These documents have been reviewed by the Bank team and
considered satisfactory to Bank safeguards requirements.
44. The project is anticipated to result in environmental and social benefits through
improving infrastructure services and enhancing disaster reduction capacity. Given the nature
and scale of the construction and operational activities, the project has the potential to cause
environmental and social impacts, which have been appropriately assessed by accredited EA
consultant during project preparation. Key environmental issues addressed include: (i) impacts
related to river water quality, soil erosion, vegetation clearance, disturbance due to earthworks
during construction; (ii) other construction impacts and social disturbance associated with
wastewater, traffic blockage and safety concerns, noise, dust and solid wastes; (iii) operational
impacts such as noise, dust, air emissions, wastewater discharge, waste management associated
with road transportation and water treatment; (iv) operational risks associated with the water
treatment plant. The impacts can be adequately avoided, minimized and/or mitigated through
measures developed either in the project design or in the project EMP, the Resettlement Action
Plan (RAP).
45. Per OP4.01, the EA included not only Bank financed activities but also linked
infrastructure investment financed solely by local government. Under Component 1, the 5.6km
Ying-Lu Road financed by the project is identified to link to two road sections at both ends. The
two road sections are covered by the project EIA and EMP. In addition, special attention was
given to the assessment and development of mitigation measures for two relatively sensitive
activities, i.e. the 2500 m3/d water treatment plant in Baoxing County and the bridge over the
Dadu River in Shimian County. Alternative analysis was carried out for the alignment, scale and
engineering aspects of the three rural roads, taking into account environmental and social,
technical, geological risks and cost considerations. In general, selected options will have less
40
land acquisition, provide better access to local communities and result in less disturbance to local
ecosystems and communities compared with other options considered.
46. OP4.04 Natural Habitats. There are no critical habitats such as nature reserve,
endangered or rare fauna and flora identified in the project area of influence. The project will
support construction of several bridges under Components 1 and 2. Some roads construction and
rehabilitation work will be located in the vicinity of rivers. In Baoxing County a small scale
water treatment plant will be built as well. If not well managed, the construction activities will
potentially have impacts on the river ecosystem. Ecological surveys and consultation were
conducted. Impact assessment were conducted and considered limited and temporary. Mitigation
measures were included in the EMP. The project will not result in significant conversion or
degradation of natural habitats.
47. OP4.11 Physical Cultural Resources. In Shimian County, proposed pedestrian
construction along the S211 road will be located in the vicinity of Xinmian Hanging Bridge. The
hanging bridge was built in 1930’s and classified as city level Cultural Relics Protection Unit in
2011. Consultation with local cultural relics authority was conducted during project preparation.
Potential impacts on the hanging bridge will be very limited provided careful construction
management, training and mitigation measures are addressed, which have been incorporated in
the EMP. The project will also result in relocation of tombs, which will be properly addressed, as
documented in the project RAP. In addition, chance-finds procedure is included in the EMP.
48. Environmental and Social Baselines. The project areas are located in western Sichuan
Province, with the urban infrastructure component to be implemented in seven counties/districts
of the Ya’an Municipality, and the rural road component to be implemented in Qionglai City
(Chengdu Municipality) and two counties (Tianquan and Yingjing) of Ya’an. Qionglai City is
located in the west of Chengdu Plain and borders Ya’an to the southwest. While Qionglai's
topography transitions from plain to mountains from east to west, Ya’an is mostly mountainous.
The project area experiences strong monsoonal influences, with rainfall heavily concentrated in
the summer, classified as a humid subtropical climate with long, hot, humid summers and short,
mild to cool, dry and cloudy winters. Water resources are abundant. Annual average
temperatures range from 14.1~17.9 degrees Celsius, while annual average precipitation is about
1,800mm.
49. The project area has a long history of human development, with agricultural production
as the predominant economic activity. The population is concentrated in small towns that are
mostly located in valleys or small plains in the mountainous area. Given its natural conditions,
the project areas are in good ecological condition, with extensive and robust surface vegetation.
For example, Ya’an has a surface vegetation of 63 percent. However, the project localities are
exposed not only to earthquake hazard, but also other geological hazards such as landslide and
slope instability, as well as flooding.
50. Environmental Management Plan. Environment Assessment Reports were prepared by
accredited EA consultants in accordance with national requirements and the World Bank’s OP
4.01. The EA Reports include: (i) EIA and Environmental Management Plan (EMP) for
Component 1; (ii) EIA and EMP for Component 2. Applicable World Bank Group
41
Environmental, Health and Safety Guidelines have been incorporated into the EAs. These
documents have been reviewed by the Bank team and considered satisfactory to Bank safeguards
requirements.
51. The EMPs were prepared based on the findings of the EIA. The EMP outlines measures
to avoid, minimize, and mitigate potential environmental and social impacts as well as a budget
for the implementation of EMP activities. It outlines the roles and responsibilities of pertinent
organizations and institutions. The EMP incorporates plans for training, monitoring and
evaluation, and budget estimates. The EMP will be incorporated into bidding documents and
contracts. The EMP also includes mitigation measures and a comprehensive capacity building
plan for the local environmental authority.
52. The project owners at county/district level have limited or no prior experience in
managing Bank-financed projects. The EMPs have included a clear institutional arrangement that
defines the environmental management responsibilities, supervision and reporting duties.
Independent environmental monitoring consultants will be hired to assist in the two PMOs in
managing environmental safeguards compliance during project implementation.
53. Public Consultation and Information Disclosure. Two rounds of public consultations
were carried out during project preparation through questionnaires, focus group discussions, and
public meetings. Information disclosure on EA preparation was advertised through public
bulletins, local newspapers, and the internet. Pubic concerns raised during these consultations
have been incorporated into the project design, the EMPs and the RAP. The draft RAPs and the
RPF were disclosed locally on January 21, 2016 and disclosed in the World Bank InfoShop on
January 27, 2016 and the final documents were disclosed on March 21, 2016. The draft EA
documents were disclosed locally and on the websites of Ya’an and Chengdu Municipalities on
January 27, 2016 and the final documents were disclosed in the World Bank Infoshop on April
13, 2016.
42
Annex 4: Implementation Support Plan
CHINA: Lushan Earthquake Reconstruction and Risk Reduction Project
Strategy and Approach for Implementation Support
1. Implementation support strategy and plan. The implementation support strategy for the
project has been developed based on the risk profile, with a focus on the main risks identified in
the SORT and mitigation measures to achieve project objectives. The risks rated substantial
include: institutional capacity for implementation and sustainability. The approach for
implementation support was developed based on the experience of previous operations in the
sector in Sichuan Province. Most of the team members are based out of the China country
office, which ensures timely and effective implementation support to the client.
2. During the first 18 months of project implementation, Implementation Support Missions
will be fielded by the World Bank every three to four months. This will include short follow-up
technical missions to provide support to PPMOs. These would focus on technical guidance and
monitoring the quality of implementation. A mid-term review mission will be carried out no
later than September 2018 to evaluate progress and make any necessary adjustments. There are
a number of areas that would require more attention during implementation and supervision of
the project:
3. Technical. Specialized engineering and disaster risk reduction would be required for the
preparation of bid documents to ensure fair competition through proper technical specifications
and a fair assessment of the technical aspects of the bids, especially for Component 3. The
team’s technical specialists in engineering and risk management, drainage will conduct site
visits on a semiannual basis throughout project implementation to oversee this important aspect.
4. Fiduciary. Training will be provided by the Bank’s FM and procurement specialists
before and during project implementation. The team will also help identify capacity building
needs to strengthen the FM capacity and improve contract management. Formal FM supervision
will be carried out semiannually and procurement supervision will be carried out on an as-
needed basis as required by the client.
5. Safeguards. The Bank team will supervise implementation of the social and
environmental management instruments and provide guidance to the implementation unit to
address any issues in close consultation with the RSS. The Bank’s supervision team will include
well-qualified and seasoned environmental safeguard specialists (local) and, social safeguard
specialists (local).
6. Thematic support. The scope, nature, and objectives of the project indicate that there
will be a need for a continuous dialogue, particularly in the areas of DRM and risk reduction.
The Bank team expects that most of the dialogue will be led by Bank sectoral specialists with
the support of external technical experts as needed.
43
Table A4-1: Focus of Implementation
Time Focus Skills Needed Resource
Estimate
Partner
Role
Year 1-3 Technical and
procurement review of
bidding documents
Procurement training
Safeguards training
Technical
Bank procurement
Bank safeguards
Supervision
budget
n.a.
Year 2–4 Supervision and
management of
construction contracts
Environmental and social
monitoring
Fiduciary
Technical/construction
experts
Bank procurement
FM
M&E
Social
Environmental
Supervision
budget
n.a.
Closing Drawing lessons learned
and mainstreaming good
practices
M&E
Technical
Supervision
budget
n.a.
Note: n.a. = Not Applicable
Table A4-2: Skills Mix Required
Skills Needed Number of
Staff Weeks
Number of
Trips Comments
Task Team Leaders
(Urban Development/DRM)
8 3 Based in CO
Senior Environmental
specialist
4 2 Based in CO
Senior social specialist 4 2 Based in CO
Procurement specialist 5 2 Based in CO
FM specialist 4 2 Based in CO
Technical experts 5 2 Consists of 2 members from
different technical disciplines
Economist 1 1 (mid-term review)
Note: CO = Country Office
44
Annex 5: Economic and Financial Analysis
China: Lushan Earthquake Reconstruction and Risk Reduction Project
A. ECONOMIC ANALYSIS
1. Investment activities were grouped into five categories for economic analysis: (i) rural
road rehabilitation in Qionglai City, Tianquan County and Yingjing County; (ii) urban road
construction and rehabilitation (including investments in associated drainage and wastewater
collection pipelines built underneath the roads, whose costs are difficult to be separated from
road construction costs) in Baoxing, Mingshan, Yucheng, Lushan, Tianquan, Yingjing, and
Shimian County; (iii) floodway embankment in Mingshan, Yingjing, and Shimian County; (iv)
water supply in Baoxing County; and (v) emergency shelters or evacuation parks in Mingshan,
Yucheng, Lushan, Tianquan, Yingjing, and Shimian.
2. Economic justification, together with financial, technical, and other evaluation criteria,
has been taken into account during project identification to ensure the selection of economically
justified investments. At least 155,700 local residents living in project municipalities, counties or
districts (Lushan County, Baoxing County, Tianquan County, Yingjing County, Shimian County,
Yucheng District, and Mingshan District) will directly benefit from the project. In addition, there
will be 157,300 villagers living along the rehabilitated rural roads who will have access to rural
roads and will benefit from the investments.
3. Economic Benefits. The main economic benefits include: savings in travel time and
transport costs, productivity increases, and improved accessibility by local residents to public
services; avoided or reduced natural disaster damages (earthquakes and floods in the future); and
improvements in living conditions, amenities, public health, and the environment. The project
will also improve natural DRM and institutional capacity of project cities and counties. The table
below lists economic benefits by type of investments.
Table A5.1: Economic Benefits by Type of Investments
Rural
roads
Urban road (including
sewerage pipelines)
Floodway
embankment
Emergency
shelter
Water
supply
Reduced vehicle
operating costs
++ ++ +
Saved travel time ++ ++
Improved water
supply services
++
Productivity increase + +
Improved amenity and
accessibility
++ ++ + +
Water quality &
environmental health
improvement
+ + +
Reduced earthquake
damage risks
+ + ++ ++ +
Avoided flood costs ++
45
4. General Assumptions and Valuation Methods Used. The economic analysis assumes
that market prices for the main elements of costs and benefits are not at much variance from their
economic values, i.e., shadow prices. Economic benefits and costs are valued at (base year) 2014
price levels, net of inflation, duties, and taxes. The discount rate used in the analysis is five
percent as per current Bank guidelines. The project duration includes 30 years of operation
including one to three years of construction, depending on the construction schedule of each
investment activity. Most of the assets, e.g., roads and pipelines, can last beyond 30 years. Asset
residual value is reflected in the end year of the benefit stream.
5. A mix of cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) was
employed in the economic analysis. Cost-benefit analysis was conducted for all investment
activities, except for emergency shelters, for which a cost-effective analysis was used.
Investments in emergency shelters / evacuation parks contribute to achieving the targets of
emergency evacuation and risk reduction set by the local government. These targets are based on
their importance to public safety and the quality of life of local residents of project
counties/cities. As it is difficult to establish a direct causal link between these investments and
benefits, as well as to quantify and monetize public safety benefits, CEA is appropriate to
compare different technical options and select the least-cost option.
6. Within the CBA, a number of valuation methods were used to quantify and monetize
economic benefits, including: productivity change approach (for traffic time saving, etc.,)
contingent valuation method (CVM, a non-market method) and hedonic method (a surrogate
market method). For the water supply investment CVM was adopted to estimate the willingness-
to-pay (WTP) of the local population for improved water supply and quantify the economic
values of water consumption. For the construction of new urban roads (including drainage and
sewerage pipelines) which improves the living standards of local residents and enhances
economic development opportunities of local communities, hedonic method was employed.
Economic benefits of improving accessibility, amenity, environmental quality and public health,
and development opportunity to local residents were estimated based on the increase in the value
of land affected by the project. It is difficult to predict the intensity of earthquakes during the
project period. Based on the high frequency of strong earthquakes in Lushan area, it was
assumed that there would be an earthquake of the same scale of the 2013 Lushan Earthquake in
20 years. Avoided damages of earthquake was estimated from the actual damages that could be
mitigated due to the earthquake risk reduction and prevention measures introduced by the
project. Sensitivity analysis was conducted to test the robustness of the results of the cost-benefit
analysis of each infrastructure investment.
Road Construction and Rehabilitation Investments
7. Cost-benefit analysis was applied to each of road (both rural and urban) construction and
rehabilitation investment. A description of the economic analysis of the urban road investment in
Lushan County and the rural road investment in Tianquan County are presented below as
examples to illustrate the analysis. The results of other investments in this category are presented
in a summary table later in this annex.
46
8. Urban Road Construction and Rehabilitation in Lushan County. The project will
reconstruct eight urban roads (total length of 3.7 km and road width of 11-12 m) and build 1.4
km of two new roads, with associated civil works for water supply, wastewater collection and
drainage networks at a capital investment of RMB19.2 million.
9. The main economic benefits of Lushan roads and associated pipelines include savings in
transport time and transport costs based on the projection of traffic volumes on each road,
improvements in access to public services (e.g., shopping, medical care and education), and
amenity of local residents. The results of the analysis for Xijiang Binghe Road are presented
below. The cost-benefit analysis quantified the benefits of transport time and costs saved,
operating cost savings owing to short-cutting and reduced traffic congestion in project areas, and
reduced damages of earthquakes due to higher earthquake prevention measures in road
construction.
10. To estimate the savings in vehicle operating costs, an empirical model developed by
Shanghai Municipal Planning Design Research Institution for the feasibility study of road
investments was used. Travel time saving was measured by the change in productivity of
passengers and goods. Savings in freight transportation time and saving in passenger travel time
are separately measured. The present value of total transport cost saving is RMB58.8 million.
The living standard improvement of local residents due to improved transport accessibility,
amenity and environmental quality was measured with the use of the hedonic method in land
value increase. There are 207 mu undeveloped land along the roads. The road construction and
rehabilitation would make the land be developed at an increased value of RMB60,100 per mu
within next 20 years. The annual benefit is estimated at RMB0.63 million. The project would
also avoid economic damages when an earthquake occurs. The Lushan earthquake in 2013
caused actual economic damage and loss on roads at RMB29 million per km. The analysis
assumed that a similar scale earthquake would occur in 20 years and the project’s disaster risk
prevention and reduction measures would help avoid RMB29 million per km. The residual asset
value was estimated at RMB1.76 million in 2047, the end year of the project operation. Other
potential benefits, such as air pollution emission reduction and transport safety improvement,
were not quantified in the analysis. The present value of the aggregated economic benefit was
estimated at RMB72.0 million.
11. The present value of the economic costs of the Lushan County road investment, i.e.,
capital costs and O&M costs combined was estimated at RMB31.1 million.
12. Results of the cost-benefit analysis. The results of the analysis show that the economic
internal rate of return (EIRR) is 10.75 percent, net present value (NPV) is RMB40.9 million, and
the benefit-cost ratio (BCR) is 2.32 (see the table below). Sensitivity analysis under the
assumptions of a 10 percent increase in total costs and a 10 percent decrease in total benefits
results in an EIRR of 9.71 percent (above the acceptable EIRR of 8 percent ), NPV of RMB30.6
million, and with a BCR of 1.90. The proposed road investment in Lushan County is therefore
considered economically viable.
47
Table A5.2 Summary of the Results of Cost-Benefit Analysis for Lushan County
13. Rural Roads - Shi-Xing Road Rehabilitation in Tianquan County. The proposed rural
road in Tianquan County will rehabilitate and expand a new 16.5 km road connecting Shiyang
Town and Xinghua Xiang. The investment includes road widening, new pavement, bridge
rehabilitation, and slope protection. The total projected capital investment is RMB71.7 million,
with a construction period of two years. The road will benefit a population of 45,300, of which
about 1,000 live along the road and the rest live in towns or villages at either end of the road and
will use the road as a short cut.
14. The main economic benefits of the rural road are savings in travel time of passengers and
vehicle operating costs, based on projected traffic volumes as well as improved living standards
of the local people due to improved access to public services (e.g., shopping, medical care and
education), and amenities. Unit vehicle operating costs were estimated using the same empirical
models mentioned above. Traffic volumes were projected based on local economic development
and transport demand. Travel time savings is measured by the change in productivity of
passengers and goods. The disaster prevention and reduction measures taken in the road
investment will help avoid or reduce the damages caused by earthquakes such as road surface
damages and blockage which delay the effort of evacuation and earthquake relief efforts. Due to
lack of the study on earthquake frequency and vulnerability, the avoided damage was estimated
on conservative assumption of the average damage per household.
Benefit/Cost (Million
RMB)
Net Present
Value (at 5%
discount rate)
2017 2018 2019 2020 2025 2030 2035 2040 2048 2049
Economic Benefits
- Vehicle operating cost
saving2904 0 0 0 121 159 206 255 344 344 344
- Passenger travel time
saving2975 0 0 0 70 112 174 257 421 577 600
- Congestion cost reduced
on other roads487 18 23 30 38 48 48 48
- Living standard
improvement (land value
increase)
679 0 0 0 63 63 63 63 0 0 0
- Avoided earthquake
damages719
Subtotal benefit 小计 7202 0 0 0 272 356 474 612 814 969 992
Economic Costs
- Capital investment 2931 1227 1752 526 0 0 0 0 0 0 -1402
- O&M 176 0 0 0 4.6 5.0 5.5 61.4 6.5 7.5 7.7
Subtotal cost 3108 1227 1752 526 4.6 5.0 5.5 61.4 6.5 7.5 -1394
Net benefit 4093.93 -1227 -1752 -526 267 351 468 551 807 962 2386
EIRR 10.75%
B/C ratio 2.32
48
15. The results of the CBA presented in the table below show that the EIRR is 10.60 percent,
net present value (NPV) is RMB22.7 million, and the benefit-cost ratio (BCR) is 1.35.
Table A5.3: Summary of Cost-Benefit Analysis in Tianquan County
16. Sensitivity analysis under the assumptions of a 10 percent increase in total costs and a 10
percent decrease in total benefits results in an EIRR of 8.60 percent (above the acceptable EIRR
of 8 percent). The proposed Shixin Road in Tianquan County is therefore considered
economically robust.
Table A5.4: Sensitivity Analysis
EIRR
10% decrease in benefits 9.53%
10% increase in costs 9.63%
Combined 8.60%
17. The results of the economic analysis of all road sub-components are presented in the
summary table later in this annex.
Floodway Rehabilitation and Embankment Investments
18. The Project includes floodway investments in Mingshan, Yingjing, and Shimian County.
Cost-benefit analysis has been conducted for each. A description of the economic analysis of the
Shimian County embankment investment is presented below as an example and the results of the
others are shown in a table later below.
Benefit/Cost (in 10,000
RMB)
Present
Value (at
5%)
2017 2018 2019 2020 2025 2030 2040 2045 2047
Economic Benefits
- Transport costs saved 3,762 0 158 184 216 304 423 628 762 823
- Travel time saved 5,030 0 268 307 352 449 567 690 758 787
- Amenity and
environmental
improvement to local
people (through property
value increase)
559 0 90 90 90 90
- Reduced earthquake
damages 702 0 29 30 31 36 42 55 63 67
- Asse residual 374
Subtotal 10,088 0 545 612 690 878 1032 1373 1583 2050
Economic Costs
- Capital investment 7,170 7744 0 0 0 0 0 0 0 0
- O&M 308 20 21 21 22 25 29 39 46 49
Subtotal 7,478 7764 21 21 22 25 29 39 46 49
Net economic flows 2,269 -7764 524 591 668 853 1003 1333 1537 2002
EIRR 10.60%
B/C ratio 1.35
49
19. Economic Analysis of Flood Control and River Embankment Investment in Shimian
County. This investment aims to protect the county seat from the floods of Dadu River by
upgrading 1.7 km of river embankment from the current standard of a 20 year flood event to a 50
year flood event. The investment will generate a variety of economic benefits to local residents
in Shimian County, especially in areas along Dadu River and in the center of the county seat.
Economic benefits are mainly avoided flood damage, safety and health improvements, and
higher quality of life.
20. Two main types of economic benefits have been monetized in the analysis: avoided flood
damages and increased amenities. Estimates of avoided flood damage are based on historic flood
damage and projected trends of economic development, and flood losses avoided by the project.
Based on the statistical data of Shimian County and under the assumption that a flood event
similar to the 2010 flood would take place once every ten years, the economic loss avoided by
the project was estimated at RMB2.36 million each year.
21. Flood management investments in Shimian County will also improve aesthetic values
and sanitation conditions of the areas along the river segment in the county seat and improve
amenities and living standards of the people who live there. The hedonic approach was used to
estimate the change in the value of lands affected by the Project and used to approximate the
economic benefit of the amenity and quality of life improvements. Based on the local land use
plan and economic development projection, there would be 300 mu land along both sides of the
floodway to be developed and it will take 20 years to complete the land development. The annual
economic benefit is estimated at RMB3.75 million.
22. Economic Costs. The present value of the estimated capital cost of this investment is
RMB48.8 million at. The present value of the O&M costs is estimated at RMB0.59 million.
23. Results of the cost-benefit analysis. The economic internal rate of return (EIRR) of the
investment is 12.24 percent, the net present value (NPV) is RMB35.4 million, and the benefit-
cost ratio is 1.66. The EIRR is above the acceptable level. Sensitivity analysis with a 10 percent
increase in capital costs and a 10 percent decrease in claimed economic benefits yields an
acceptable EIRR of 9.10 percent.
Water Supply Plant in Baoxing County
24. The investment in a water supply plant (WSP) of 2,500 m3 per day in Baoxing will meet
the demand for increasing and improving water supply in Baoxing County to a current
population of 8,800, which is projected to increase to 10,000. The main economic benefits are
health and living standard improvement of local residents. The average value of WTP for
improved water supply service is derived from available WTP surveys in similar size towns in
Chongqing in 2006 where the average WTP value is RMB2.76 per ton. Considering income
increase over years, the average WTP value in Baoxing County is estimated RMB4.71 per ton
per month. Thus the total value of economic benefit to households is estimated at RMB2.16
million in 2018 and reach to RMB3.07 million by 2021.
50
25. Economic Costs. The capital investment is RMB19.2 million and annual O&M cost is
about RMB553,000.
26. Results of the cost-benefit analysis. The economic internal rate of return (EIRR) of the
investment is 10.59 percent, the net present value (NPV) is RMB10.5 million, and the benefit-
cost ratio is 1.62.
Emergency Shelters
27. Investments in emergency shelters / evacuation parks in project counties or districts
contribute to achieving the targets of emergency evacuation and risk reduction set by the local
government. These targets are based on their importance to public safety and the quality of life
of local residents of project counties/cities. However, it is difficult to draw a direct causal link
between the proposed investments and human safety after earthquakes, and to quantify and
monetize the public safety benefits of the investments. Cost-effectiveness analysis (CEA) is
therefore used to compare different technical options and select the least-cost option to achieve
the development targets.
28. Two possible sites (Lot No.1 and Lot No.2) in Yucheng District were analyzed. The
estimated cost per person for Lot 1 (which can serve 9,300 persons) is RMB1,997 and for Lot 2
(which can serve 12,00 persons) it is RMB2,647. Lot No.1 is the least cost option and has been
selected.
Summary table
29. EIRRs by investment category and county are summarized in the table below.
Table A5.5: EIRR by Investment Category and County
30. Impact on the poor. Local residents, including vulnerable groups in the project areas,
would benefit from the project and are supportive of the proposed improvements in infrastructure
and environmental protection facilities. Local governments will be responsible for the capital and
O&M costs. As such, the project is not anticipated to have negative impacts on the poor.
Baoxing Lushan Mingshan Yucheng Tianquan Yingjing Shimian Qionglai
Urban roads (including
drainage and
sewerage pipelines
along the roads)
11.67% 10.75% 12.58% 9.24% 10.89% 11.59% 11.03%
Water supply plant 10.59%
Floodway enbankment 10.81% 11.21% 12.62% 12.24%
Emergency shelters /
evacuation parks
least cost
option
least cost
option
least cost
option
least cost
option
least cost
option
least cost
option
Rural roads 10.42% 12.33% 11.89%
51
B. FISCAL ANALYSIS
31. The project city/district/counties are located in the western part of Sichuan Province with
total population of 3.13 million people in 2014. GDP per capita was RMB32,765 in 2014
(US$5,041 equivalent).9 The average GDP growth rate in the eight project city/district/counties
during 2011–2014 was 11.3 percent per year, respectively 9.4 percent－12.2 percent. The GDP
growth rate achieved was higher than the average target of 10.4 percent per year in the 12th
Five-
Year Plan (FYP, 2011－2015). The earthquake in 2013 had a significant influence on economic
development in the project areas and the average GDP growth rate was only 4.0 percent in 2013.
For recovery and reconstruction of the project areas, investment projects of RMB97.9 billion
(about 1.1 times of the total GDP) were implemented in 2014, with financial support from upper
level governments. In 2014, average urban disposable income reached average RMB23,311 yuan
per person and the rural net income reached RMB9,416 yuan per person, which were about
double than that in 2010. Considering the slow-down in economic development in the entire
country, the project city/district/county governments are considering to adjust the GDP growth
rate targets for the next five years to about 8.0–10.0 percent per year.
Table A5.6: Socioeconomic Development Status and Plans
(2014)
* Also include fiscal subsidies from upper level governments
** Preliminary considerations.
Source: The project city/district/counties
Government Fiscal Revenue and Expenditure
32. Along with fast economic development, government fiscal revenues of the project
city/district/counties also present an increasing trend. During 2011–2014, the average increase in
public fiscal revenue for the project area was 18.1 percent per year. However, the level of local
fiscal revenue is still very low, and can only support daily operations of the governments and
their entities. Large fiscal subsidies have been provided from upper level governments and sector
authorities, especially after the earthquake, for recovery and reconstruction of the project areas.
9 The exchange rate of US$1.00 = RMB6.50 is applied.
Indicator Unit Qionglai Yucheng Mingshan Tianquan Lushan Baoxing Yingjing Shimian
Population Thousand 657.1 1,571.8 280.6 160.0 120.0 59.1 153.0 124.5
Gross Domestic Product CNY million 18,385 46,241 5,589 4,418 2,940 2,343 5,613 6,445
Annual groth rate % per year 10.3% 11.0% 9.1% 13.6% 14.8% 14.7% 11.8% 11.0%
GDP per capita CNY per person 29,778 30,052 21,090 32,017 20,358 40,531 37,545 50,748
Local Fiscal revenue CNY million 2,702 1,918 270 499 383 181 618 393
Total Fiscal expenditure* CNY million 5,387 9,384 3,344 1,942 5,831 2,760 2,716 1,481
Fixed asset investment CNY million 21,074 47,143 6,197 6,393 1,266 5,016 5,312 5,509
Urban disposible income CNY per person 24,509 24,435 23,425 21,875 21,909 23,217 24,100 23,020
Rural net income CNY per person 12,444 9,056 9,772 8,272 8,311 9,179 9,707 8,587
GDP growth rate in 12-FYP % per year 11.0% 9.0% 8.3% 10.5% 8.5% 13.0% 11.0% 11.8%
Actual average in 2011-14 % per year 12.2% 11.1% 10.3% 9.4% 13.4% 11.3% 10.6% 11.9%
GDP growth rate in 13-FYP** % per year 10.0% 10.0% 9.5% 9.0% 8.0% 9.0% 10.0% 8.5%
52
33. In China, most of the fiscal subsidies are allocated for certain investment projects and
public affairs. Only a small amount can be re-allocated by the city/district/county governments.
Of the total fiscal expenditures (funds from local fiscal revenue plus fiscal subsidy) in 2014,
about 21.2 percent was allocated to urban/rural development, transportation, and disaster
recovery (project related fiscal allocations). Such large fiscal allocations have supported urban
and transport infrastructure recovery and development in the project areas.
34. Overall, fiscal capacities of project city/district/counties are relatively weak. For most
local financed investment projects, the local governments need to explore other financial
resources such as revenues from land sales and development, local government bonds,
commercial bank loans, and private participation. In recent years, fiscal funds for local financed
investment projects have relied on incremental public fiscal revenue and land sales revenue.
Government fund revenues for the project areas increased from RMB21.54 million in 2010 to
RMB34.95 million in 2014, of which about 81 percent was from land sales.
35. Qionglai, a county-level city, and Yucheng which is located in the core urban area of
Ya’an Municipality, has relatively better fiscal status. The other district/counties are mostly
located in rural and mountainous areas, and have very weak fiscal capacities. Most infrastructure
development investments rely on upper government fiscal subsidies and sector support,
especially in Lushan and Baoxing Counties. Local governments have tried hard to maintain rapid
economic development and to explore financial resources to supplement their weak fiscal
capacities. For the 13th
FYP, project governments are considering growth rates in fiscal revenues
and expenditures to about 10–15 percent per year.
Table A5.7: Fiscal Revenue and Expenditure of the Project City/District/Counties
(RMB million, 2014)
Source: Financial Bureaus of the project city/district/counties
Government Debt Status
36. Project city/district/counties have taken substantial loans from commercial banks to
finance fast infrastructure development. Government debt includes: (i) responsible debt, which is
Indicator Qionglai Yucheng Mingshan Tianquan Lushan Baoxing Yingjing Shimian
Total Fiscal Revenue
Local Fiscal Revenue 2,702 1,918 270 499 383 181 618 393
Public fiscal revenue 1,285 1,218 119 120 81 125 164 357
annual growth rate (%) 35% 11% 21% 54% 76% 71% 37% 19%
Fund revenue 1,417 700 151 379 302 56 454 36
among which, land sale 1,214 530 130 191 288 50 411 22
Subsidy 2,863 11,582 2,199 2,415 5,679 2,845 2,154 1,080
Total Fiscal Expenditure 5,387 9,384 3,344 1,942 5,831 2,760 2,716 1,481
Public fiscal Expenditure 3,878 8,783 3,134 1,577 5,515 2,679 2,234 1,382
among which
Urban and rural development 236 996 11 70 107 87 39 100
Transportation 447 943 133 12 504 414 29 50
Disaster recovery - - - 1,723 - - 1,067 -
Fund Expenditure 1,509 601 210 365 316 81 482 99
among which, land development 69 0 - 25 293 8 417 22
53
directly borrowed by government; (ii) guaranteed debt, which is borrowed by government
entities with government guarantees; and (iii) contingent liability, which is borrowed by
government entities or enterprises and might become government debt. In 2011 and 2013, the
central government carried out two large scale financial audits on government debt at all
government levels. According to the debt data provided by the project city/district/counties, the
total accumulated debt balance of the eight project city/district/counties was RMB14.8 billion in
2014, which was about 16.1 percent of GDP, 212.5 percent of government local fiscal revenue,
and 45.0 percent of government fiscal expenditure. Direct debt was about 53 percent of total debt,
which is to be paid back by the city/district/county governments.
37. Among the project city/district/counties, Qionglai City has relatively higher debt. The
direct debt in 2014 was about 26.1 percent of GDP and 177.3 percent of local fiscal revenues. As
arranged, 50 percent of its debt will be repaid by Chengdu Municipality. In addition, Qionglai
was authorized to issue RMB900 million of local government bonds to alleviate its debt pressure.
In general, Qionglai’s indebtedness level is not very high when compared with in similar
Chinese in an environment of rapid economic development. Lushan County also has high total
debt; however, about 70 percent of the debt is guaranteed debt for farmers to rebuild houses that
were damaged by the earthquake, and direct debt was only 4.2 percent of the GDP and 32.5
percent of local fiscal revenue. In addition, for guaranteed debt Lushan government has already
deposited significant guaranteed funds in the bank. Debt service requirements for Lushan are low.
Table A5.8 Government Debt Status
(RMB million, 2014)
Source: Financial Bureaus of the project city/district/counties
38. Over the past few years, Commercial bank loans have supported fast infrastructure
development in the project area. These have also brought some pressure on local governments to
manage the servicing of these loans. In 2014, total debt service for all project
city/district/counties was about RMB3.4 billion, which was about 23 percent of the debt balance
and 10 percent of total fiscal expenditure. Debt service capacity relies on incremental public
fiscal revenue, land sales revenue, and central government policies. For ensuring debt repayment,
all project city/district/counties have established debt repayment funds in their annual fiscal
budgets. The scale of funding is decided based on debt service requirements and fiscal capacity.
Indicator Qionglai Yucheng MingshanTianquan Lushan Baoxing Yingjing Shimian
New debt 4,177 - 13 18 497 - - 342
Debt repayment 1,283 1,407 47 99 3 108 435 25
Debt balance 8,500 2,916 315 348 1,211 88 648 770
Direct debt 4,791 1,917 204 301 125 80 308 73
Guaranteed debt 3,335 - 78 1 840 1 109 3
Contingent liability 374 999 32 46 246 7 231 694
Debt to GDP 46.2% 6.3% 5.6% 7.9% 41.2% 3.8% 11.5% 11.9%
Debt to Local Fiscal Revenue 314.6% 152.0% 116.6% 69.6% 316.2% 48.6% 104.9% 196.2%
Debt to Fiscal Expenditure 157.8% 31.1% 9.4% 17.9% 20.8% 3.2% 23.9% 52.0%
Direct debt to GDP 26.1% 4.1% 3.6% 6.8% 4.2% 3.4% 5.5% 1.1%
Direct debt to Local Fiscal Revenue 177.3% 99.9% 75.5% 60.3% 32.5% 44.2% 49.8% 18.6%
Direct debt to Fiscal Expenditure 88.9% 20.4% 6.1% 15.5% 2.1% 2.9% 11.3% 4.9%
54
The fiscal budget also reserves contingency funds of about 5 percent of the total fiscal budget,
which also can be used for debt service. The central government is developing policies and
measures to ease the pressures of local government debt, including allowing local governments
to issue bonds to swap matured debt and provide low interest loans for infrastructure
development. The project city/district/counties are also enhancing their debt management,
including closely monitoring debt status, optimizing debt structure, and establishing adequate
debt repayment funds.
Project Counterpart Availability and Financial Sustainability
39. The central government will be responsible for 43 percent of the Bank loan (both
principle and interest) while the project city/district/counties will be responsible for the
remainder.10
The project financing plan requires 22.3 percent of the project to be financed by
counterpart funds. For Baoxing and Shimian, counterpart fund requirements would be only 2.9–
4.0 percent of the total project costs; counterpart fund requirement for Yucheng is higher at about
48.6 percent of the total cost (mostly for land acquisition and resettlement). The project is
scheduled to be implemented in three years (2016–2018), with about 52 percent of the
investments made in 2017.
Table A5.9: Analysis of Counterpart Fund Requirements
(RMB million, 2016–2018)
Source: The World Bank task team
Table A5.10: Analysis of Loan Repayment and Fiscal Sustainability
(RMB million)
10
Among the total loan amount of US$300 million, US$107.5 million will be repaid by the central government.
IndicatorTotal/
averageQionglai Yucheng Mingshan Tianquan Lushan Baoxing Yingjing Shimian
1. Local fiscal revenue 27,677 10,822 7,682 1,036 2,000 1,450 705 2,475 1,507
2. Total fiscal expenditure 129,172 21,575 37,584 12,841 7,777 22,080 10,749 10,878 5,687
2.1. Related fiscal allocations 27,673 2,735 7,766 554 7,230 2,314 1,951 4,546 576
3. Total Project Cost 2,510.30 151.01 605.44 263.60 391.64 292.12 207.44 249.19 349.86
4. Counterpart fund requirements 560.30 47.01 289.80 62.10 75.09 23.48 5.94 42.81 14.07
4.1. % of local fiscal revenue (4/1) 2.02% 0.43% 3.77% 5.99% 3.75% 1.62% 0.84% 1.73% 0.93%
4.2. % of total fiscal expenditure (4/2) 0.43% 0.22% 0.77% 0.48% 0.97% 0.11% 0.06% 0.39% 0.25%
4.3. % of related fiscal allocations
(4/2.1)2.02% 1.72% 3.73% 11.20% 1.04% 1.01% 0.30% 0.94% 2.44%
55
Source: The World Bank task team
Measures for Ensuring Counterpart Fund Availability and Financial Sustainability
40. The above analysis indicates that the project city/district/counties likely have the
fiscal capacity to finance the project and service the debt. The following measures, which are
already being considered by the project local governments, should be pursued rigorously:
Develop and implement strategies and plans to maintain rapid economic development in
the project areas to ensure adequate fiscal resources.
Carefully estimate counterpart fund requirements for the project and include counterpart
fund requirements in the annual fiscal budgetary plans. The provincial government has
requested project city/district/counties to furnish guarantee letters regarding the provision
of timely counterpart funds for project implementation.
Establish dedicated financial accounts for the sub-projects under the management of each
project local government authorities and ensure that the funds required are planned in
advance and managed well.
Enhance debt management, including overall annual debt service requirements (not only
the World Bank loan). This would include controlling the amount of debt, its structure
and tenor, establishing debt repayment funds, and seeking upper government’s financial
support, if necessary. For the World Bank loan, the governments may seek longer
amortization and grace periods for loan utilization and repayment.
In case counterpart funds are not expected to be available on time from fiscal sources,
mobilize the necessary funds from other sources, including financial support from upper
level governments.
Provincial and municipal governments should monitor the financial aspects of project
implementation closely and provide timely financial support, as required.
IndicatorTotal/
averageQionglai Yucheng Mingshan Tianquan Lushan Baoxing Yingjing Shimian
1. Fully repaid by City/District/Counties 1,950.00 104.00 315.64 201.50 316.55 268.65 201.50 206.38 335.79
Repayment - pricinple per year 81.25 4.33 13.15 8.40 13.19 11.19 8.40 8.60 13.99
Repayment - interest in 2022 29.25 1.56 4.73 3.02 4.75 4.03 3.02 3.10 5.04
Total repayment in 2022 110.50 5.89 17.89 11.42 17.94 15.22 11.42 11.69 19.03
Repayment in local fiscal revenue (2022) 0.75% 0.10% 0.44% 2.20% 1.68% 2.15% 3.17% 0.88% 2.52%
2. Partially repaid by City/District/Counties 1,251.25 59.28 179.91 114.86 180.43 153.13 114.86 117.63 331.15
Repayment - pricinple per year 52.14 2.47 7.50 4.79 7.52 6.38 4.79 4.90 13.80
Repayment - interest in 2022 18.77 0.89 2.70 1.72 2.71 2.30 1.72 1.76 4.97
Total repayment in 2022 70.90 3.36 10.20 6.51 10.22 8.68 6.51 6.67 18.77
Repayment in local fiscal revenue (2022) 0.48% 0.06% 0.25% 1.26% 0.96% 1.22% 1.80% 0.50% 2.49%
56
Annex 6: Project MAP