FOR OFFICIAL USE ONLY PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$ 100 MILLION TO THE FOR A. April 14, 2014

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY Report No: PAD533 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF US$ 100 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA FOR A JIAOZUO GREEN TRANSPORT AND SAFETY IMPROVEMENT PROJECT April 14, 2014 China and Mongolia Sustainable Development Unit Sustainable Development Department East Asia and Pacific Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank's policy on Access to Information.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective February 1, 2014) Currency Unit = RMB RMB 6.1 = US$ 1.0 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS BP Bank Procedure IPF Investment Project Financing CCTV Closed-Circuit Television ITS Intelligent Transport System CPS Country Partnership Strategy JMFB Jiaozuo Municipal Finance Bureau CQS Selection Based on Consultants' JMG Jiaozuo Municipal Government Qualifications LIBOR London Interbank Offered Rate DA Designated Account M&E Monitoring and Evaluation EA Environmental Assessment MOF Ministry of Finance ECOP Environmental Codes of Practices NCB National Competitive Bidding EIRR Economic Internal Rate of Return NDRC National Development and Reform EMP Environmental Management Plan Commission FM Financial Management NMT Non-Motorized Transport FMM Financial Management Manual NPV Net Present Value FYP Five-Year Plan O&M Operation and Maintenance GDP Gross Domestic Product OP Operational Policy GHG Greenhouse Gas ORAF Operational Risk Assessment GoC Government of China Framework GPS Global Positioning System PDO Project Development Objective HPAO Henan Provincial Audit Office PMO Project Management Office HPFB Henan Provincial Finance Bureau PCR Physical Cultural Resources HURDB Housing and Urban-Rural Plu Project Implementing Unit Development Bureau PLG Project Leading Group IBRD International Bank for RSSC Road Safety Steering Committee Reconstruction and Development QBS Quality Based Selection ICB International Competitive Bidding QCBS Quality and Cost Based Selection 1CM Integrated Corridor Management RAP Resettlement Action Plan IP Indigenous Peoples RPF Resettlement Policy Framework Regional Vice President: Country Director: Sector Director: Sector Manager: Task Team Leader: Axel van Trotsenburg, EAPVP Klaus Rohland, EACCF John A. Roome, EASSD Abhas K. Jha, EASTN Fei Deng, OPSPQ

3 CHINA Jiaozuo Green Transport and Safety Improvement Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT... 1 A. Country Context... 1 B. Sectoral and Institutional Context C. Higher Level Objectives to which the Project Contributes... 3 II. PROJECT DEVELOPMENT OBJECTIVE... 4 A. PDO... 4 B. Project Beneficiaries C. PDO Level Results Indicators III. PROJECT DESCRIPTION... 5 A. Project Components B. Project Financing C. Lessons Learned and Reflected in the Project Design IV. IMPLEMENTATION... 7 A. Institutional and Implementation Arrangements B. Results Monitoring and Evaluation... 8 C. Sustainability V. KEY RISKS AND MITIGATION MEASURES... 9 A. Risk Ratings Summary Table... 9 B. Overall Risk Rating Explanation VI. APPRAISAL SUMMARY A. Economic and Financial Analysis B. Technical C. Financial Management D. Procurement E. Social (including Safeguards) F. Environment (including Safeguards)... 14

4 Annex 1: Results Framework and Monitoring Annex 2: Detailed Project Description Annex 3: Implementation Arrangements Annex 4: Operational Risk Assessment Framework (ORAF)...35 Annex 5: Implementation Support Plan... 38

5 PAD DATA SHEET China Jiaozuo Green Transport and Safety Improvement Project (P132277) PROJECT APPRAISAL DOCUMENT EAST ASIA AND PACIFIC EASCS Basic Information Project ID EA Category Team Leader P B - Partial Assessment Fei Deng Lending Instrument Fragile and/or Capacity Constraints [ ] Investment Project Financing Financial Intermediaries [ ] Project Implementation Start Date 15-May-2014 Expected Effectiveness Date 14-Oct-2014 Joint IFC No Series of Projects [ ] Project Implementation End Date 30-Jun-2019 Expected Closing Date 31-Dec-2019 Report No.: PAD533 Sector Manager Sector Director Country Director Regional Vice President Abhas K. Jha John A. Roome Klaus Rohland Axel van Trotsenburg Borrower: People's Republic of China Responsible Agency: Jiaozuo Finance Bureau Contact: Mr. Zhang Jidong Title: Deputy Director, Finance Bureau Telephone No.: jzlsjt@163.com Project Financing Data(in USD Million) [X] Loan [ ] Grant [ ] Guarantee ] Credit [ ] IDA Grant [ ] Other Total Project Cost: Total Bank Financing: Financing Gap: 0.00

6 Financing Source Amount Borrower International Bank for Reconstruction and Development Total Expected Disbursements (in USD Million) Fiscal Year Annual Cumulative Proposed Development Objective(s) The proposed project development objectives are to improve transport safety and efficiency along the selected transport corridors and to promote non-motorized trips within the pilot green corridor in Jiaozuo City. Components Component Name Cost (USD Millions) Safe System Integrated Corridor Management Green Corridor Development Public Transport Improvement Institutional Strengthening 3.83 Sector Board Transport Institutional Data Sectors / Climate Change Sector (Maximum 5 and total % must equal 100) Major Sector Sector % Adaptation Mitigation Co- Co-benefits % benefits % Transportation Urban Transport Transportation General Transportation Sector Total 100 O I certify that there is no Adaptation and Mitigation Climate Change Co-benefits information applicable to this project.

7 Themes Theme (Maximum 5 and total % must equal 100) Major theme Theme % Urban development City-wide Infrastructure and Service 100 Delivery Total 100 Policy Compliance 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 Natural Habitats OP/BP 4.04 Forests OP/BP 4.36 Pest Management OP 4.09 Physical Cultural Resources OP/BP 4.11 Indigenous Peoples OP/BP 4.10 Involuntary Resettlement OP/BP 4.12 Safety of Dams OP/BP 4.37 Projects on International Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 X X X X X X X X X X Legal Covenants Name Recurrent Due Date Frequency Road Safety Steering Committee X December 31, 2014 Description of Covenant Jiaozuo Municipality shall establish and thereafter maintain throughout the period of project implementation a Road Safety Steering Committee, with composition, powers, functions, funds, staffing, facilities, and other resources acceptable to the Bank, which shall be responsible for the implementation of selected road safety improvement activities under the Project.

8 Bank Staff Team Composition Name Title Specialization Unit Maria Luisa G. Juico Program Assistant Program Assistant EASIN Zheng Liu Procurement Specialist Procurement Specialist EASR2 Feng Ji Senior Environmental Senior Environmental EASCS Specialist Specialist Fei Deng Senior Operations Task Team Leader OPSPQ Officer Lei Wu Program Assistant Program Assistant EACCF Alejandro Alcala Gerez Senior Counsel Legal LEGES Junxue Chu Senior Finance Officer Disbursement CTRLN Patricia Maria Fernandes Social Development Social Development EASER Specialist Specialist Haiyan Wang Senior Finance Officer Disbursement CTRLN Xiaoke Zhai Senior Transport Senior Transport EASCS Specialist Specialist Fang Zhang Financial Management Financial Management EASFM Specialist Yi Yang Operations Analyst Transport Analyst EASCS Non Bank Staff Name Title Office Phone City Gladys Frame Traffic Management and Edinburgh Road Safety Specialist, Consultant Gordon Neilson Public Transport Hong Kong SAR, China Specialist, Consultant Jean-Marie Braun Senior Highway Paris Engineer, Consultant Youxuan Zhu Social Safeguards Washington, D.C. Specialist, Consultant Geoffrey Kurgan Transport Consultant Washington, D.C. Muqing Liu Transport Specialist, Washington, D.C. Consultant Locations Country First Location Planned Actual Comments Administrative Division China Henan Province Jiaozuo City X

9 I. STRATEGIC CONTEXT A. Country Context 1. Since its transition three decades ago, China has experienced rapid economic development with an average annual Gross Domestic Product (GDP) growth rate of 9.9 percent, mainly driven by its industrialization and infrastructure development. Resource-based cities', which have contributed significantly to the export-oriented economy decades ago, now need to adapt to the consumer- and service-based economy. However, due to poor overall planning and exhaustion of the non-renewable resources, many such cities currently suffer from multiple problems such as unbalanced economic structure, pollution and ecological damage, and unemployment and poverty. 2. To sustain economic growth and improve social equality, the Government of China (GoC) endeavors to set the resource-exhausted cities on the path of sustainable development, supported through favorable policies and financial subsidies. In December 2007, the State Council issued "Opinion on Facilitating the Sustainable Development of Resource-Based Cities" (the "Opinion"), which requires schemes to compensate resource exploitation and mechanisms to aid declining industries to be established. The 12th Five-Year Plan (FYP) for Social and Economic Development ( ) also prioritizes the transformation of resource-exhausted regions nationwide. B. Sectoral and Institutional Context 3. Economic development and household income growth has resulted in rapid urbanization and motorization in Chinese cities. During the past five years, total private vehicle ownership in China has increased by 25.2 percent annually on average, from million in 2007 to million in As evidenced by many cities inside and outside China, motorization, if not properly guided and managed, often leads to increased road accidents, traffic congestion, air pollution and greenhouse gas (GHG) emissions. Lessons from cities with sustainable urban transport systems indicate that road safety improvement, public transport development, and nonmotorized transport (NMT) promotion are the key solutions to tackle the urban transport challenges. 4. Accordingly, the GoC has issued a series of national policy and strategy notes to support systematic improvements in urban transport. In May 2004, the GoC promulgated a new National Traffic Safety Law and prepared a National Road Safety Plan for the 11h FYP period. It also participated in the Decade of Action for Road Safety ( ) launched by the United Nations in In October 2005, the State Council issued Opinion #46 to declare that urban public transport development should be a national priority. The 12th FYP reinforced the strategic importance of public transport development for Chinese cities. 5. To counter air pollution and GHG emissions, the GoC established a national target of reducing carbon intensity, defined as the amount of GHG emitted per unit of GDP, by 40 to 45 percent by the end of 2020, compared to the level in The latest Directive jointly issued by A resource-based city is a city that relies on its local mineral or other natural resources to develop exploitation or processing as its primary industry. 1

10 the Ministry of Finance (MOF), the Ministry of Housing and Urban-Rural Development, and the National Development and Reform Commission (NDRC) in September 2012 calls for the promotion of non-motorized trips in Chinese cities and requires, for example, trip share of walking and cycling should remain over 70 percent for cities with a population of 1 million or less. 6. Despite the strategic emphasis and policy support by the central government, implementation of innovative urban transport improvements and achievement of expected outcomes remain a great challenge to many local governments. Lack of professional knowledge and practical experience is the key barrier for Chinese cities to develop safe and green transport systems. To this end, the World Bank, with over 30 years of collaboration with China and extensive experience in sustainable transport development, is in a unique position to support an accelerated transfer of knowledge and scaling up of related investments for Chinese cities where capacity remains a major challenge. Project City: Jiaozuo 7. Jiaozuo is located in the north-west of Henan Province with a distance of 90 kilometers from Zhengzhou, the capital city of Henan Province. It borders Shanxi Province in the north and the Yellow River in the south. It can be easily accessed by expressway as well as railway. The municipality covers an area of 4,071 square kilometers and has a permanent population of 3.54 million. The city has a built-up area of 95 square kilometers and a permanent population of 850,000. According to Jiaozuo's master plan, the city's built-up area is expected to expand to 140 square kilometers by 2020, with a population of 1.4 million. GDP in Jiaozuo reached RMB billion (US$ 25.8 billion equivalent) in 2012, increasing by 7.3 percent over the previous year. Per capita disposable income of urban residents in Jiaozuo was RMB 20,136 in 2012, about 80 percent of the national average for urban residents (RMB 24,565). 8. Coal mining and its affiliated industry used to be the primary economic driver leading Jiaozuo's social and economic development for half a century. However, with the exhaustion of the mineral resources in the late 1990s, the city's economic development started to slow down, resulting in job losses and declining fiscal revenues. Thus, Jiaozuo Municipality initiated a strategic transformation from the so-called "Black Impression" (coal) into the "Green Theme", which leveraged and benefitted from the multiple touristic attractions in the municipality 2. Significant achievements have been made after a decade's effort in infrastructure development and service promotion related to tourism. In 2011, Jiaozuo received over 22.8 million tourists, which generated a total tourism revenue of RMB 17.2 billion, accounting for 11.7 percent of the GDP. 9. Yet, Jiaozuo Municipality still relies on fiscal transfers and earmarked funds from upper level governments. In 2008, Jiaozuo was identified by NDRC as one of the first twelve resourceexhausted cities. Since then, continuous financial support has been allocated to Jiaozuo from the national and provincial governments, which accounts for over 40 percent of its local disposable revenue each year. These funds are mainly channeled to social security services, medical and 2 Jiaozuo has three 5A (the highest rating for tourism spot in China) rated scenic spots, including Yuntai Mountain, Shennong Mountain and Qingtian River. In addition, it also has two 4A rated, three 3A rated and one 2A rated scenic spots. 2

11 health care services, education, environmental protection and ecological restoration and subsidies for public infrastructure services such as water, heating and public transport. 10. In order to accelerate its socioeconomic transformation, Jiaozuo Municipality has identified the transport sector as one of the key sectors for development during the next few years. Extensive investment is being made to improve the intercity connectivity from Jiaozuo to other major transport hubs through highway and railway; a new high-speed rail (Shijiazhuang to Zhengzhou, partially financed by the Bank) was open in December 2012 with a station located 80 kilometers away from Jiaozuo. However, poor connectivity between the city center and the scenic spots, which are mostly located in the northern outskirts of the city, limits the economic benefits that tourism could bring to the urban area of Jiaozuo. Currently, many tourists go to the scenic spots directly from other cities, instead of staying overnight in downtown Jiaozuo, where they may consume on food, local specialties and accommodation. The inefficient road network and inadequate public transport services make the downtown area even less appealing to the tourists. Furthermore, rapid motorization is taking place with an average annual growth rate of 19 percent in private car ownership during the past 5 years, which has led to increasing road accidents and fatalities. In 2012, the Traffic Police conducted a thorough check of the road network in Jiaozuo and identified 82 accident-prone locations, most of which are located along the primary roads. 11. In addition, mitigating the negative environmental impacts and achieving a sustainable development mode remain on top of Jiaozuo Municipal Government's (JMG) agenda. According to Jiaozuo's 12 th FYP, the transport sector is expected to make significant contribution to energy saving and emission reduction targets, primarily through public transport prioritization, introduction of cleaner fuels, and promotion of environmentally-friendly transport modes. More recently, the city has set up a plan to build a systematic "green corridor" network dedicated to pedestrians and cyclists that will connect the scenic spots, water system and parks within the whole municipality. C. Higher Level Objectives to which the Project Contributes 12. The Bank's China Country Partnership Strategy (CPS) for FY , discussed by the Board on November 6, 2012, is aligned with China's 12th FYP, which emphasizes, among other issues, the importance of actions to address urban transport issues. The proposed project contributes directly to both strategic themes of the CPS, i.e., "Supporting Greener Growth" and "Promoting More Inclusive Development", through transport safety and efficiency improvements along the selected transport corridors and NMT promotion within the pilot green corridor in Jiaozuo. 13. The proposed project is aligned with the twin goals of the World Bank Group. Jiaozuo Municipality is in a critical transition period to grow out of declining coal industries and boost new economic development. Income level of Jiaozuo residents is lower than the national average. Studies have shown that the lower income people rely mostly on public transport and bicycles to access their job locations and public services; they are also more vulnerable in road accidents. As such, the project promotes shared prosperity in Jiaozuo through improving transport efficiency, public transport and road safety in support of its socioeconomic transformation. 3

12 II. PROJECT DEVELOPMENT OBJECTIVE A. PDO 14. The proposed Project Development Objectives (PDOs) are to improve transport safety and efficiency along the selected transport corridors and to promote non-motorized trips within the pilot green corridor in Jiaozuo City. B. Project Beneficiaries 15. The total number of people who will benefit directly from the project is expected to be more than 490,000 (in which about 241,000 are women) by The following table lists the beneficiaries and corresponding benefits from the implementation of the project. Beneficiaries Road users Pedestrians and cyclists Public transport users Women Residents Bus company Tourists Government agencies Project benefits More efficient movement; reduced accidents Safer movement; more pleasant travel environment Travel time savings; reduced accidents; more reliable and comfortable services Upgraded user experience (through better design that serves women's particular needs such as security, safety and comfort) Better accessibility to jobs, schools and public services; improved air quality Lower operation costs; increased ridership and revenue Enhanced public transport services; new recreational activities Strengthened institutional capacity in urban transport management C. PDO Level Results Indicators 16. The achievement of the PDO will be measured by the following indicators: (a) Reduction of annual number of transport related fatalities along the project corridors; (b) Reduction of travel time by public transport during peak hours on the project corridors; (c) (d) Increase in user satisfaction ratio of public transport services (total and women); Annual number of non-motorized trips within the green corridor. 4

13 III. PROJECT DESCRIPTION A. Project Components 17. Component A - Safe System Integrated Corridor Management. This component will develop and implement an integrated package of engineering, education and traffic regulation improvements on the selected transport corridors in Jiaozuo City. It includes: (i) carrying out of transport safety data collection, performance monitoring and evaluation, and remedial measures development; (ii) implementation of civil works, traffic management measures and intelligent transport systems (ITS) along the selected corridors and adjacent areas; and (iii) development of road safety education facilities, carrying out of road safety education campaigns, and improvement of post-crash medical services. 18. Component B - Green Corridor Development. This component will develop a green corridor dedicated to pedestrians and cyclists, which links the downtown area and a scenic tourist area in the mountains north of the city. It includes the construction of a new road section in the mountains, rehabilitation of the sections along the Qunying River and existing urban roads, and provision of safe intersections, NMT facilities, green corridor signage and markings, and lighting, greening and landscaping along the corridor. 19. Component C - Public Transport Improvement. This component will assist Jiaozuo Municipality to improve the service quality of its public transport system through: (i) construction of a bus interchange adjacent to the railway station; (ii) upgrading and construction of bus depots; (iii) expansion of the advanced bus operation system; and (iv) procurement of new buses. 20. Component D - Institutional Strengthening. This component will support the implementation of the project through: (i) provision of trainings and study tours to relevant officials and staffs; (ii) carrying out of technical assistance studies on urban transport; and (iii) provision of technical consultancy and software for project management. B. Project Financing 21. Lending Instrument. The proposed lending instrument for this project is an Investment Project Financing (IPF). The Borrower has selected a US Dollar denominated, commitmentlinked variable spread loan based on six-month LIBOR plus an additional variable spread. It has also selected all available conversion options, level repayment of principal, and a repayment period of 30 years, including a 5-year grace period. 22. Project Cost and Financing. The total project cost is estimated to be RMB million, equivalent to US$ million. It will be financed through an IBRD loan of US$ 100 million and counterpart funds of US$ million equivalent. Bank financing will not be used for land acquisition. All counterpart funds will come from Jiaozuo Municipality's fiscal budget, and a fiscal analysis has been conducted and concluded that the Municipality would have sufficient fiscal resources to contribute to the counterpart funds. The table below presents the distribution of project costs and financing by component. 5

14 IBRD Project Components Project Cost F RD % Financing Financing A. Safe System Integrated Corridor Management % B. Green Corridor Development % C. Public Transport Improvement % D. Institutional Strengthening % Total Project Costs % Interest during Implementation % Front-End Fees % Total Financing Required % C. Lessons Learned and Reflected in the Project Design 23. The Bank has been actively involved in urban transport development in China and many other developing countries. Key lessons generated from the past and on-going Bank operations as well as global practices have been reflected in the design of this project, including: (a) Adopting a Safe System approach. Based on extensive analytical work and practical experience in developed and developing countries, the Bank is promoting a Safe System approach to improve road safety, which requires that the road transport system be designed to expect and accommodate human error in order to achieve the long-term vision of zero road fatalities and serious injuries. The concept of the Safe System approach has been introduced and discussed at length during project preparation. As a result, the project will adopt a Safe System approach to improve the safety performance of the selected transport corridors, through the establishment of a lead agency for road safety management as well as the introduction of a risk management strategy based on the identification and analysis of safety hazards and the development and application of corresponding remedial measures. Technical assistance on baseline data collection, risk analysis, performance evaluation and remedies development, which will be supported by the project, will contribute to the promotion of the Safe System approach. (b) Applying an Integrated Corridor Management (ICM) approach. The ICM approach has been developed and widely applied to many urban transport projects in China, including Liaoning, Wuhan, Anhui, Changzhi and Xiangyang, etc. This new approach concentrates all required interventions in one or a few selected corridor(s) in an integrated manner to seize on synergies and maximize benefits. The visible contrast created between the chosen corridors with comprehensive and integrated improvements vis-d-vis those without, in turn, facilitates the building of support for engagement in additional corridors and the eventual improvements of urban transport in the entire city. Lessons in preparing and implementing the ICM approach in World Bank project cities have been frequently discussed and shared inside China through city-to-city knowledge exchange activities and site visits facilitated by the Bank team. Key lessons have been incorporated in the design of this project, including particular measures to address the needs for effective coordination among different agencies involved, coordinated procurement schedules for various civil works, goods and consultancy activities, and active communication with the general public on the ICM approach. 6

15 24. The project design also benefits from TransFORM, a collaborative solution platform for urban transport established as a first pilot under the China and World Bank Knowledge Hub for Development in November International best practices and key lessons in transport safety improvement and ITS that were captured in earlier TransFORM events have been incorporated into the design of the relevant project components. New knowledge generated from this project will in turn be recorded in and amplified through TransFORM. IV. IMPLEMENTATION A. Institutional and Implementation Arrangements 25. Henan Province, as the Project Implementing Entity, acts through Jiaozuo Municipality to implement the project. The implementation arrangements are as follows: (a) A Project Leading Group (PLG) led by the Vice Mayor and consisting senior officials from all relevant departments of JMG was established to oversee the preparation and implementation of the project. The PLG will be maintained through the entire implementation period and key members will meet regularly for reviewing project progress and addressing key issues that arise during implementation. (b) A Project Management Office (PMO) was established at the Jiaozuo Municipal Finance Bureau (JMFB) to be responsible for overall project management and coordination, procurement management for all contracts under the project, financial management for all project funds, supervision of all implementation activities (including safeguards), and project reporting, in accordance with the Bank's guidelines. 26. JMG has assigned the implementation responsibilities of each activity under the four components to the respective municipal agencies. These agencies, guided by the PMO, will act as the Project Implementing Units (PIUs) and carry out engineering design preparation, collaboration with other relevant agencies, land acquisition and resettlement, construction management, and monitoring and evaluation, of the respective activities in accordance with the Bank's guidelines. More details on implementation arrangements are provided in Annex According to the Bank's experience with similar project cities in China, the above arrangements normally work well, particularly when the PLG members can meet regularly to review project progress. Since this is the Bank's first infrastructure engagement with Jiaozuo Municipality, substantial training has been provided to the PMO, PIUs and relevant municipal agencies on Bank's procurement, financial management, environmental safeguards and social safeguards policies during project preparation, and will be continued throughout project implementation. 28. In addition, to better achieve the safety improvement objective of the project, JMG has committed to establishing a Road Safety Steering Committee (RSSC), building on the existing Road Safety Coordination Group established in It will be headed by the Mayor of JMG and a working office will be established at the Public Security Bureau with full-time staff and dedicated budget. Technical assistance will be provided to the RSSC on carrying out the activities under Component Al, including safety data collection, analysis of accident causes, 7

16 proposing remedial measures and monitoring and evaluating the safety performance in the project corridors. Through implementing and coordinating this subcomponent and additional capacity building activities under the institutional strengthening component, the RSSC is expected to familiarize with the day-to-day function as a lead agency for transport safety and become a permanent office to oversee road safety issues in Jiaozuo City. B. Results Monitoring and Evaluation 29. A results framework has been developed (see Annex 1) and provides the basis for project monitoring and evaluation (M&E). Baseline data for all the indicators has been collected and target values have been set up and agreed. The PMO will be responsible for reporting implementation progress and collecting actual data for each indicator regularly. Bank financing has been allocated to cover the incremental costs of the project M&E. Details on the methodology and arrangements of data collection are provided in Annex 3. C. Sustainability 30. During project preparation, both Henan Province and Jiaozuo Municipality have exhibited strong commitment to achieving the PDO. Green and sustainable development has been highlighted in Jiaozuo's 12th FYP and many other local policy papers. Nevertheless, sustainability of the project outcomes depends on whether the local authorities could build up the capacity to operate the project assets in a safe and efficient manner in the long-term, particularly in terms of (i) Safe System approach; and (ii) ICM and NMT improvements. 31. A RSSC will be formally established, which will lead the transport safety improvement works in Jiaozuo. Technical assistance and capacity building will be provided to the RSSC through the project. The RSSC is expected to adopt the Safe System approach, apply the approach citywide and become a permanent lead agency to oversee all road safety related issues in Jiaozuo after project implementation. 32. Based on the experience in other Chinese cities, successful implementation of the ICM approach would create a strong and visible demonstration impact, which would generate the city's momentum to replicate the approach on other corridors in the city. It is envisaged that the city will acquire the ICM and NMT improvements knowledge and skills through the implementation of the integrated corridors and the green corridor under the Bank's guidance. Additional capacity building activities will be provided to relevant staff through the project and relevant TransFORM events to strengthen their capacity. 8

17 V. KEY RISKS AND MITIGATION MEASURES A. Risk Ratings Summary Table Risk Category Stakeholder Risk Implementing Agency Risk Rating M - Capacity S - Governance M Project Risk - Design S - Social and Environmental M - Program and Donor L - Delivery Monitoring and Sustainability M Overall Implementation Risk M Note: L (Low), M (Moderate), S (Substantial) B. Overall Risk Rating Explanation 33. The overall implementation risk for the project has been rated "Moderate" (see details in Annex 4), due to the following considerations: (a) This is the PMO's first Bank infrastructure investment project and it is not familiar with the Bank's fiduciary and safeguards policies. (b) The Safe System approach requires shared responsibility and accountability among all relevant stakeholders, including the road designers, road operators and road users. Failure to address the institutional issue may jeopardize the long-term sustainability of the project outcomes. (c) The project design concepts, such as ICM and Safe System approach, are relatively new to the local agencies of JMG. They may lack the capacity to implement these elements with satisfying quality, which will hamper the achievement of the PDO. (d) Growing government borrowing poses a potential risk to the timely availability of counterpart funds. JMG may fail to allocate sufficient counterpart funding from the municipal fiscal budget to support the project investments, considering the competing priorities that the local government faces. 34. The key corresponding measures to mitigate the above risks are: (a) Trainings on Bank's procurement, financial management and safeguards policies have been provided to the PMO and PIUs during project preparation and will continue 9

18 through project implementation. Adequate resources will be allocated by the Bank team to monitor the project's compliance with the Bank's policies during implementation. (b) A RSSC will be formally established to be the lead agency for overseeing all road safety related issues in Jiaozuo. Engineering, education and regulation interventions have been incorporated into the project design to address the safety issues in a systematic manner. The Bank team will review the performance of the RSSC during project implementation and provide technical support when needed. (c) The PMO and PIUs will hire experienced consultants to carry out the design of the project components. The Bank team will also work closely with the PMO and PIUs and mobilize international and domestic expertise to assist them with design reviews and implementation supervision. Trainings, workshops and study tours will be provided to enhance the capacity of the relevant municipal agencies during project implementation. (d) The fiscal analysis has concluded that Jiaozuo Municipality would have sufficient resources to support the annual investments of the project during implementation. Transport infrastructure investment will remain a top priority among JMG's local fiscal expenditure and JMG has committed that the investments under the proposed project will be prioritized in the annual investment programs. VI. APPRAISAL SUMMARY A. Economic and Financial Analysis 35. A cost-benefit analysis was carried out for the physical investment components whose direct economic benefits could be quantified, i.e., Component A, Component B and Component C, which accounted for 98 percent of the total project cost. Project costs include the cost of construction, operation and maintenance over the assumed project life of 25 years. The analysis takes into account the following direct economic benefits: (i) passenger travel time savings; (ii) vehicle operating cost savings; (iii) reduction of traffic accident costs; (iv) tourism revenue increase; and (v) bus vehicle replacement savings. A 12 percent economic discount rate is used. According to the analysis, the overall economic internal rate of return (EIRR) of the project is estimated to be percent and the net present value (NPV) is estimated to be US$ million. Therefore, the project is considered to be economically viable. 36. A sensitivity test has also been conducted, assuming higher costs and/or lower benefits. Results of the sensitivity analysis as shown in the table below indicate that the project has robust economic returns. The results also indicate that the project is more sensitive to the changes in benefits, which suggests that special attention needs to be given to the quality of the services to ensure the expected number of beneficiaries and associated benefits are achieved. 10

19 Scenario EIRR NPV (US$ million) Base 17.39% % benefits decrease 14.94% % costs increase 15.37% % benefits decrease and 20% cost increase 13.04% A fiscal analysis was carried out to describe the fiscal requirements for this World Bank financed project. In view of the expected GDP growth in the coming years and the continuous support from the national and provincial governments as part of the sustainable development strategy for resource-based cities, it was concluded that JMG, who will utilize the entire World Bank loan and is responsible for repaying the principal and interests of the loan, would have sufficient financial resources to support the investments of the Project. 38. Specifically, the analysis has taken into account the fact that upfront activities (such as land acquisition, resettlement and design preparation) are primarily financed by counterpart funds and a year-on-year fund requirement from the Bank and local counterpart respectively was derived accordingly. It was found that the requirement for counterpart funding during the project implementation period is relatively small, about 0.3 percent of the total disposable revenue of JMG during 2014 to 2019 and 0.5 percent of the disposable revenue in the peak year. Infrastructure investment has increased by 15 percent annually on average in Jiaozuo during the past three years and is expected to increase by 12 percent in the next few years. Total investment of the proposed project accounts for less than 1 percent of the planned infrastructure investment during 2014 to JMG has committed that the investments under the proposed project will be prioritized in the annual infrastructure investment programs and it is thus concluded that sufficient counterpart fund would be available in a timely manner during project implementation. In addition, the assessment also finds that the funding needed for operation and maintenance (O&M) of the project assets during their life cycle is relatively low. In the peak year, total government expenditure for project asset O&M and loan repayment would account for 0.23 percent of JMG's total disposable revenue for that year. Therefore, the project would unlikely bring in serious pressure to JMG's fiscal expenditure. B. Technical 39. The feasibility study of the project was prepared by a consulting team with extensive knowledge in international best practices of urban transport planning and management. The feasibility study has incorporated the Bank team's comments and been found technically sound and feasible. The project design reflects Bank's recent experience in improving urban transport through the ICM approach in China; it also introduces the Safe System approach for alleviating road fatalities and serious injuries. In addition, complementary interventions for public transport improvement including infrastructure construction and ITS provision are included in the project. Finally, an innovative "Green Corridor" component is designed to promote pedestrian and bicycle trips in Jiaozuo. 40. Safe System Integrated Corridor Management. The feasibility study consultant carried out a review of the major transport corridors in Jiaozuo and identified three corridors featuring 11

20 (i) high road accident rates; (ii) frequent public transport services; and (iii) large traffic volumes. The ICM approach is applied to the design of these three selected corridors, i.e., Jiefang Road, Renmin Road and Ta'nan Road, to make comprehensive improvements to public transport operation, traffic management and road safety. The various inputs from the bus company, traffic police, road users and ChinaRAP survey results have been incorporated in the design. The Safe System approach is introduced during project preparation and has been embedded into the project design, which promotes a systematic "learning by doing" approach to achieve a road transport system that is able to accommodate human error. During implementation, a baseline survey and periodical analysis will be carried out to collect the traffic accident data, identify the safety risks and propose the remedial measures for the project corridors. Road safety education campaigns as well as medical emergency services have been designed with a focus on the project corridors. Adequate financing has been allocated under the project to achieve the desirable outcome. 41. Green Corridor Development. The green corridor is an innovative investment proposed by the JMG to promote non-motorized trips among the local residents and the tourists. JMG is developing an overall green corridor plan to link the existing scenic spots, parks and water system in the entire city by dedicated corridors for pedestrians and cyclists, and this proposed green corridor under the project is one of the first pilots in the city. During preparation, the alignment of the corridor was optimized to reduce land acquisition and resettlement, minimize negative environmental impacts and maximize social and economic benefits for both the local residents and the tourists; the design will be further improved at the detailed design stage to feature the landscape and scenery, highlight NMT safety and promote user experience. C. Financial Management 42. The PMO established at the JMFB will be responsible for the project management and implementation, including project financial management (FM) related works. The Bank loan proceeds, including overseeing the Designated Account, will be managed by Henan Provincial Finance Bureau (HPFB). An assessment of the project FM arrangement identified PMO financial staff's lack of experience in managing complex Bank financed projects as the principal FM risk. The following risk management measures were agreed: (i) preparation and issuance of a Financial Management Manual (FMM) acceptable to the Bank to standardize project FM procedures; and (ii) in addition to extensive FM training from the Bank, HPFB who has experience with the Bank financed operations will arrange more extensive workshops and experience sharing. The FMM has been finalized and accepted by the Bank prior to project negotiations. 43. With the implementation of the proposed actions, the FM arrangements will satisfy the World Bank's requirements under OP/BP See Annex 3 for additional information. D. Procurement 44. Procurement will be conducted by the PMO set up under JMFB, with assistance of PIUs and with involvement of relevant line agencies of the JMG. An assessment of the capacity of the PMO has been carried out. The key issue and risk is that the PMO and the relevant government 12

21 agencies have no prior experience of implementing Bank financed operations and there is possible influence of domestic procurement practice on project implementation. In particular, the activities under the project will be implemented by multiple government agencies, whose experience in project management and implementation varies. In view of these risks, the following mitigation actions have been agreed with the PMO: (i) the PMO to hire no later than project negotiations a Procurement Agent with adequate qualifications and procurement experience in projects financed by the Bank or other multilateral financial institutions, and under terms of reference acceptable to the Bank; (ii) the Bank task team to provide continuous procurement training during project preparation and implementation with initial training focused on differences between Bank procurement policies and procedures and local regulations; and (iii) the PMO to prepare by project negotiations a Procurement Management Manual satisfactory to the Bank. The Procurement Agent has been hired and the Procurement Management Manual has been prepared prior to project negotiations. In addition, a procurement plan has been prepared by the PMO and agreed with the Bank prior to project negotiations. A brief summary of the procurement capacity and risk assessment and project procurement arrangements is provided in Annex 3. E. Social (including Safeguards) 45. For the proposed project, Components A, B and C will involve civil works. For Component A, according to the final feasibility study, most of the proposed activities will be carried out within the existing right-of-way. For Component B, it involves the construction of a 16.9 kilometer pathway for bicycles and pedestrians connecting the northern mountainous area and to Renmin Park and Longyuan Lake Park in the center of the city, which will involve the acquisition of 9.06 hectares (ha) of land, including 5.86 ha of state owned land and 3.2 ha of collectively owned slope land from four villages in three urban districts. No house demolition or relocation is required. For Component C, it involves the construction of one bus interchange and five bus depots. Since the interchange will be constructed within the existing station plaza, no new land acquisition will be required. For the five bus depots, two of them - Zhongzhan and Macun Bus Depots will be upgraded within the area of the existing depots with no new land acquisition. Three new bus depots, Dongxuegu, Yimen, and Dabeizhang Bus Depots will involve the acquisition of about 7.76 ha of land, which will affect 38 households from four villages. Most of the acquired land is farmland. No house demolition or relocation is required. A screening was conducted for all three components and concluded that there are no locally funded projects linked with the proposed project. 46. For the land acquisition and resettlement impacts from these components, Involuntary Resettlement (OP4.12) is triggered. For all the impacts from Components A, B and C, a Resettlement Action Plan (RAP) and a Resettlement Policy Framework (RPF) have been prepared by the Jiaozuo PMO in accordance with relevant Chinese laws, regulations, and World Bank requirement. A RPF was prepared due to the following considerations: (i) whether Component A will eventually involve any land acquisition and house demolition is pending on the completion of the detailed project design during project implementation; and (ii) the scope of Components B and C might change during implementation. For the currently identified land acquisition and resettlement impacts under Component B and C, the proposed compensation for land is set at CNY34,000 to CNY62,000 per mu (US$83,606 to US$152,459 per ha) among 13

22 affected villages, which is based on the most recent provincial regulation on comprehensive land price for acquired land areas in Under the overall management of the resettlement leading group in Jiaozuo Municipality, the PMO will lead the resettlement operations. They will work closely with the Jiaozuo Land Resources Bureau and Jiaozuo Urban Demolition and Resettlement Office under the Housing and Urban-Rural Development Bureau, with the cooperation of the working groups in town and sub-district. During resettlement implementation, an experienced external monitoring agency will be selected to conduct independent resettlement monitoring and evaluation. The monitoring results will be regularly reported twice a year and, if needed, remedial actions will be developed. 48. Public consultations have been conducted during RAP/RPF preparation including surveys and public meetings with the project affected people. Information about the project impacts, compensation policies, rehabilitation options and grievance procedures has been provided to the affected people through the disclosure of RAP and RPF in the project areas. 49. Focus group discussions and key informant interviews have been used to consult with the potentially affected people and obtain views and preferences regarding resettlement impacts, compensation policies, and rehabilitation measures. These views and preferences have been taken into account during RAP revision, and the majority of the potentially affected people agree that the resettlement and rehabilitation measures planned under the RAP would be adequate to address and mitigate any adverse impacts. 50. In addition to social safeguards, the project also involves some broader social issues, particularly gender considerations in project design and implementation. The focus of the project on public transportation, non-motorized green corridor and accessibility for pedestrians as well as safety improvements will have positive impacts on women as they are more likely to walk, cycle and use public transport, and travel to multiple destinations at off-peak times. Based on the survey and group discussions, a set of gender sensitive recommendations were collected and passed to the design team. An important gender-sensitive intervention included in the project design is to provide reliable public transport for primary and middle school children, which will have a positive impact on women's time-poverty and workload. 51. The RAP and RPF were locally disclosed at the government website and the PMO on November 27, The RAP and RPF were disclosed on the Bank InfoShop on January 24, 2014 and January 8, 2014, respectively. F. Environment (including Safeguards) 52. The project is classified as Category B and triggers Environmental Assessment (OP4.01) and Physical Cultural Resources (OP4. 11).). An Environmental Assessment (EA) and a standalone Environmental Management Plan (EMP) have been prepared in accordance with Chinese EA regulations and the Bank safeguards policies. The majority of the project is in the urban area of Jiaozuo City where land is already heavily influenced by human activities. An 8 kilometer loop of the green corridor, as part of the 16.9 kilometer green corridor (about 5 meters wide) dedicated to pedestrians and cyclists, will be situated in a mountain area to the north of the urban area; however, no ecologically sensitive sites (e.g. natural habitats) are impacted by the project. 14

23 53. The project will, in fact, bring positive impacts such as the improvement of road safety, reduction of traffic congestion and accidents, and will contribute to the reduction of vehicle emissions in the selected areas of Jiaozuo City. However, there may be nuisances associated with small scale construction and some adverse impacts during operation, such as (i) disposal of waste and wastewater generated at the bus depots; (ii) safety issues related to gas filling facilities at the bus depots; and (iii) disposal of waste generated by green corridor users. These potential adverse impacts are small scale, site-specific, and can be readily mitigated with good engineering design and good construction management practice. 54. There are six Physical Cultural Resources (PCRs) in the vicinity of the alignment of the green corridor, i.e. Qunying Aqueduct; Wanglanguang Grave, Niangniang Temple, Dangyangyu Porcelain Kiln Site, Longsi Cemetery and Yuanrong Temple. The first four are classified as registered cultural relics, and the last two are un-registered PCRs. As part of the EA process, alternatives of the green corridor have been compared and the final alignment was selected to avoid impacts on sensitive sites including PCRs. Site investigation has been conducted by the EA consultants, together with consultation with the PCR specialist and local PCR management authority. The EA concluded that the green corridor will not have significant impacts on the PCRs during construction and operation phases. Jiaozuo PCR Management Authority has approved the alignment of the green corridor. 55. The green corridor will connect to the entrance of two recreation parks (i.e. Fengshan Park, Longyuanhu Park), and pass through one park (i.e. Renming Park). Fengshan Park in the northern mountain used to be a stone pit quarry and was reclaimed to a recreation park. Renming Park and Longyuanhu Park are man-made urban park/garden built in 1957 and 2006 respectively. There parks are not considered as natural habitats. The EMPs included measures to avoid or mitigate adverse impacts on trees and vegetation, and measures to timely restore the affected vegetation in the project influence area. It is estimated that the green corridor will attract 670 people on a daily basis and 1,400 per day at the peak season. These green corridor users will not likely pose significant pressures on the PCRs and the parks along the green corridor, given that these users accounts for a small percentage of the total people visiting the sites. 56. An EMP has been developed proposing adequate mitigation measures. Environmental Codes of Practices (ECOPs) have been developed for construction contractors which will be incorporated into bidding documents and civil work contracts. For the bus depots, mitigation measures have been developed to collect and dispose of waste and wastewater during the operation phase. Risk assessment has been conducted for the gas filling facilities, and adequate mitigation measures have been proposed. For the green corridor, special considerations have been given to the road safety design, good drainage provisions, as well as inclusion of toilets and garbage bins for the green corridor users. Taking a precautionary approach, specific measures for PCR conservation have been proposed in the EMP, including that (i) the construction plan will be sent to the PCR Authority for further review and comments; (ii) construction will be designated in the area out of the PCRs' protection area and heavy machinery will be strictly restricted in the area close to these PCRs. In addition, the EMP specifies institutional arrangements during the construction and operation phases, capacity building activities, a monitoring plan, and the budget for the EMP implementation. 15

24 57. Public consultations were conducted during the EA process, including questionnaire surveys and public meetings with the project affected people and local Environmental Protection Bureau and PCR Authority. Information about the project, potential environmental and social impacts, and planned mitigation measures were provided to the public during these consultations. Local villagers generally supported this project, and gave comments on how to reduce construction impacts. PCR Authority provided specific recommendations on the selection of the green corridor alignment. Feedback and concerns were addressed in the project design and in the EMP. 58. The EA and EMP were locally disclosed at the governmental website and the PMO on November 14, The EA and EMP were disclosed on the Bank InfoShop on January 8, 2014 and January 22, 2014, respectively. 16

25 Annex 1: Results Framework and Monitoring CHINA: Jiaozuo Green Transport and Safety Improvement Project Project Development Objective (PDO): The proposed project development objectives are to improve transport safety and efficiency along the selected transport corridors and to promote non-motorized trips within the pilot green corridor in Jiaozuo City. PROJECT DEVELOPMENT OBJECTIVE INDICATORS Cumulative Target Values Unit of Data Source/ Responsibility Description Indicator Name M u Baseline Frequency for Data (indicator ea r219Methodology Collection definition, etc.) Indicator One: Number of annual. IndiatorOne Numer f anualaccident data PMO and Rolling transport related average fatalities along the Number annually aidt data a Riara om project corridors projct orriorsstatistics RSSC of 3 years Indicator Two: Travel time by public transport during peak hours on the Minutes hor project corridors S a 2From Puji Rd to Sub-Indicator 2.1: Jiefang Road Minutes Year 5 bus GPS cmmpand Dongyuan Rd company (5.3 km) SPMO and bus From Puji Rd to Sub-Indicator 2.2: Renmin Road Minutes Year 5 bus GPS Renmin Rd (7.1 company PMO and bus From Jiefang Sub-Indicator 2.3: Ta'nan Road Minutes Year 5 bus GPS Rd to Yinhu Rd company (4.7 km) Indicator Three: User satisfaction Lia1 PMO and bus ratio of public transport services company Sub-Indicator 3.1: User Li % 6 PMO and bus Year 5 user survey satisfaction ratio of women company L Indicator Four: Annual number of non-motorized trips within the green Number 0 200, ,500 5 obse PMU ad corridor5 observation HURDB corridor 17

26 INTERMEDIATE RESULTS INDICATORS Z.' Unit of Cumulative Target Values Da t asource/ Responsibility Description o Baseline Frequency for Data (indicator i Measure F Methodology Indicator Name Collection definition, etc.) Component A: Safe System Integrated Corridor Management Indicator IniatrOn:SaeSytmprogress One. Safe System Yes/No No Yes Yes Yes Yes Yes annually PMO foundation established report Indicator Two: Length of project Km annually progress PMO and corridor improved report HURDB F1 Trained in 2 Indicator Three: Number of people progress PMO and Number ,000 40,000 60,000 annually road safety whose road safety awareness is raised report HJURDB facilities Component B: Green Corridor Development Indicator Four: Length of corridor [ Km anl [progress PMO and constructed report HURDB Component C: Public Transport Improvement Indicator Five: Overnight parking Number annually progress PMO and bus capacity increased l report company Indicator Six: Percentage of buses l % annually progress PMO and bus equipped with ITS on-board units report company Indicator Seven: Annual bus ridership L Number annually progress PMO and bus report company Component D: Institutional Strengthening Indicator Eight: RSSC in function Yes/No No No No No Yes Yes annually progress PMO with dedicated report staff and budget Indicator Nine. Number of officials prges MOadiu Ic Number annually progress PMO and bus and staffs trained report company 18

27 Annex 2: Detailed Project Description CHINA: Jiaozuo Green Transport and Safety Improvement Project 1. The development objectives of the project are to improve transport safety and efficiency along the selected transport corridors and to promote non-motorized trips within the pilot green corridor in Jiaozuo City. 2. The project consists of four components, including (i) Safe System Integrated Corridor Management; (ii) Green Corridor Development; (iii) Public Transport Improvement; and (iv) Institutional Strengthening. The total cost is US$ million equivalent, to be financed by an IBRD loan of US$ 100 million and counterpart funding of US$ million equivalent. Detailed costs of each component and distribution of the Bank loan are listed below (see Table A2.1). Table A2.1 Detailed Project Costs (in US$ million) Project Component Total WB WB loan allocation A Safe System Integrated Corridor Management % Al Technical Assistance on Safe System Approach A2 Integrated Corridor Implementation A3 Road Safety Education and Emergency Response B Green Corridor Development % C Public Transport Improvement % Cl Bus Interchange C2 Bus Depots C3 Advanced Bus Operation System C4 Bus Procurement D Institutional Strengthening % Dl Trainings and Study Tours D2 Technical Assistance Studies D3 Project Management Total base costs Physical Contingency Price Contingency Total project costs Interest during Implementation Front-end Fee Total Financing Required Component A - Safe System Integrated Corridor Management. This component will develop and implement an integrated package of engineering, education and traffic regulation 19

28 improvements with embedded Safe System principles on the selected corridors in Jiaozuo City. It includes: (a) Sub-component Al - Technical assistance on Safe System approach. This subcomponent will finance consultancy services on a technical assistance program to Jiaozuo Municipality to collect baseline transport safety data for the selected project corridors, conduct analysis of causes of accidents, develop remedial measures based on the analysis, and monitor and evaluate safety performance of the project corridors; (b) Sub-component A2 - Integrated corridor implementation. This subcomponent will finance: (i) civil works and traffic management measures focusing on three selected transport corridors: Jiefang Road (5.3 kilometers), Renmin Road (7.1 kilometers) and Ta'nan Road (6.0 kilometers, including a short section on Zhanqian Road); and (ii) ITS covering the project corridors as well as the adjacent areas. The design, construction and operation of the corridors will introduce the ICM approach, which comprises an integrated package of improvements for road space allocation, bus priority, pedestrian crossings, bicycle facilities, ITS, parking management, and school zone safety. Specifically, it comprises the following key elements: * Civil works include road rehabilitation within the existing right-of-way, reallocating road space based on the demand of each transport mode, separating various modes to reduce safety risks, junction channelization, provision of road signs and markings, improvement of bus stops, access points, pedestrian crossings, and bicycle facilities, as well as greening, lighting and utilities works along the selected project corridors. * Bus priority, including dedicated bus lanes and traffic signal priority, will be provided on two out of the three project corridors, i.e., Renmin Road and Ta'nan Road. * School zone safety improvement measures will be implemented for the primary and middle schools located along the project corridors, including adding protection facilities and traffic management measures, redesigning nearby areas to provide safer waiting areas for parents as well as traveling and crossing paths for students, and installing pedestrian traffic signals. * Parking and taxi management will be introduced on the project corridors to regulate and/or restrict roadside parking to ensure allocated space to NMT, and provide dedicated drop-off and loading areas for taxis. * ITS includes a traffic command center, a traffic analysis and optimization system, an area traffic control system, a traffic monitoring and regulation system, a traffic information system, a traffic safety data collection and analysis system, a traffic accident response system, and some auxiliary equipment and vehicles. (c) Sub-component A3 - Road safety education and emergency response. This subcomponent will enhance road safety in Jiaozuo through improved road safety awareness, traffic regulation compliance and emergency medical response services focusing on the project corridors. It will finance: (i) construction of two road safety 20

29 education centers at Renmin Road and Huanghe Avenue, respectively, and procurement of relevant equipment; (ii) design and implementation of road safety education campaigns; and (iii) procurement of equipment for post-crash emergency medical services. Specifically, it will address the following aspects: * Social marketing campaigns to improve traffic safety awareness and compliance with safety standards and rules to support the enhanced traffic regulation in the project corridors. These campaigns will target all relevant stakeholders and use all appropriate media, taking into account local literacy levels and language needs. Media will include local television, radio, newspapers, movie theaters, billboards, and posters. * Enhanced work-, school-, and community-based education programs will be included and targeted within the project corridors. These will be integrated with the traffic regulation and social marketing campaigns. * Enhanced post-crash safety services targeted within the project corridors to improve the survivability of road crash victims and their longer-term recovery prospects. These services will include more effective emergency response systems and rehabilitation facilities. 4. Component B - Green Corridor Development. The component will introduce a 16.9 kilometer green corridor (about 5 meters wide) dedicated to pedestrians and cyclists, which links the downtown area and a scenic tourist area in the mountains north of the city. It starts from Longyuanhu Park, goes through Renmin Park, Yanhe Park and Fenshanzhen Park, and forms a loop in the mountains which connects Yuanrong Temple. It will benefit both the commuters and the recreational users. It will finance the construction of a new road section, including one bridge, in the mountains, rehabilitation of the sections along the Qunying River and existing urban roads, and provision of safe at-grade intersections, NMT facilities, green corridor signage and markings, and lighting, greening and landscaping along the corridor. 5. Component C - Public Transport Improvement. This component will assist Jiaozuo Municipality to improve the service quality of its public transport system through a comprehensive range of activities. It will finance: (a) construction of a bus interchange adjacent to the railway station; (b) upgrading and construction of 5 depots; (c) expansion of the advanced bus operation system; and (d) procurement of new buses. (a) Sub-component C1 - Bus interchange. This sub-component will finance the construction of one bus interchange/terminus adjacent to the north square of the railway station. The design of the interchange will ensure the transfer convenience between different city bus routes as well as between inter-city buses and railway. The interchange will also include necessary office facilities for the bus company and service facilities for the passengers. (b) Sub-component C2 - Bus depots. This sub-component will finance the upgrading and construction of 5 depots to provide more parking space and better maintenance capacity to the bus company. Both running depots and maintenance depots will be included to provide all levels of maintenance for better service reliability. It includes 21

30 upgrading of the existing Zhongzhan and Macun depots and construction of the new depots at Yimen, Dongxuegu, and Dabeizhang. (c) Sub-component C3 - Advanced bus operation system. This sub-component will improve the bus company's advanced bus operation system to provide better service quality. It will finance: (i) upgrading of the existing bus control center to provide new backup; (ii) expansion of the GPS-based dispatching system including procurement of GPS units and mechanical diagnostic devices for the buses; (iii) development of a passenger information service system including on-board broadcasting, web- and mobile-based information dissemination, real-time arrival information display at the bus stops and associated communications systems; and (iv) provision of a CCTV monitoring system covering the bus vehicles, bus stops, bus interchanges and depots. (d) Sub-component C4 - Procurement of new buses. This sub-component will finance the procurement of about 286 new bus vehicles to operate on the project corridors and in other areas in support of Jiaozuo's public transport priority strategy. The new buses will provide air conditioning and universal accessibility to riders. 6. Component D - Institutional Strengthening. This component is not only needed to support the implementation of the project, but also will allow Jiaozuo Municipality to have the capacity of improving urban transport in a sustainable manner in the long term. It includes three sub-components: (a) Sub-component D1 - Trainings and study tours. This subcomponent will support training activities and study tours for relevant entities in Jiaozuo to better implement and manage the project, focusing on the areas of World Bank policies and procedures, integrated corridor improvement, green tourism corridors, urban road safety, ITS, and public transport operation, etc. (b) Sub-component D2 - Technical assistance studies. This subcomponent will finance targeted TA studies based on the needs assessment of relevant agencies, including: parking strategy and planning; green corridor and non-motorized transport planning; school transport safety education materials, and urban transport decision-making system. (c) Sub-component D3 - Project management. This sub-component will engage consultants to provide technical advisory and project management support to the PMO and purchase some project management software. 22

31 Annex 3: Implementation Arrangements CHINA: Jiaozuo Green Transport and Safety Improvement Project Project Institutional and Implementation Arrangements 1. Henan Province, as the Project Implementing Entity, acts through Jiaozuo Municipality to implement the project. The implementation arrangements are as follows: (a) A Project Leading Group (PLG) led by the Vice Mayor and consisting senior officials from all relevant departments of JMG was established to oversee the preparation and implementation of the project. The PLG will be maintained through the entire implementation period and key members will meet regularly for reviewing project progress and addressing key issues that arise during implementation. (b) A Project Management Office (PMO) was established at the JMFB to be responsible for overall project management and coordination, procurement management for all contracts under the project, financial management for all project funds, supervision of all implementation activities (including safeguards), and project reporting, in accordance with the Bank's guidelines. 2. JMG has assigned the implementation responsibilities of each activity under the four components to the respective municipal agencies. These agencies, guided by the PMO, will act as the PIUs and carry out engineering design preparation, collaboration with other relevant agencies, land acquisition and resettlement, construction management, and monitoring and evaluation, of the respective activities in accordance with the Bank's guidelines. The table below summarizes the detailed implementation arrangements of each project activity. Component Activity Responsible Agency Safe System Integrated Technical assistance on Safe RSSC/Public Security Corridor Management System Bureau Integrated corridors HURDB ITS Public Security Bureau Road safety education center Public Security Bureau/ Transport Bureau Road safety campaigns Public Security Bureau Post-crash safety services Health Bureau Green Corridor Development Green corridor HURDB Public Transport Bus interchange HURDB Improvement Bus depots Transport Bureau Advanced bus operation system Bus Company' Bus procurement Bus Company There is one bus company in Jiaozuo, which is a 100 percent state-owned enterprise. As of end 2013, the bus company is operating 38 bus routes with about 700 bus vehicles. Annual bus ridership in Jiaozuo in 2013 was million passenger trips. Under the Bank project, it will provide technical specification on the advanced bus operation system and bus vehicles. The PMO will be responsible to procure these goods and the bus company will be responsible to operate and maintain them. The bus company will not receive any funds from the Bank loan. 23

32 Institutional Strengthening Trainings, TAs & project Finance Bureau management RSSC - Road Safety Steering Committee HURDB - Housing and Urban-Rural Development Bureau 3. According to the Bank's experience with similar project cities in China, the above arrangements normally work well, particularly when the PLG members can meet regularly to review project progress. Since this is the Bank's first engagement with Jiaozuo Municipality, substantial training has been provided to the PMO, PIUs and relevant municipal agencies on Bank's procurement, financial management, environmental safeguards and social safeguards during preparation, and will be continued throughout project implementation. 4. To better achieve the safety improvement objective of the proposed project, JMG has committed to establishing a Road Safety Steering Committee (RSSC), building on the existing Road Safety Coordination Group in Jiaozuo. The proposed structure of the RSSC (see below) has been agreed and the RSSC is expected to be formally established by Jiaozuo Municipality by no later than December 31, It will be headed by the Mayor of JMG and the working office will be established at the Traffic Police with full-time staff and dedicated budget. Technical assistance will be provided to the RSSC on carrying out the activities under Component Al, including safety data collection, analysis of accident causes, proposing remedial measures and monitoring and evaluating the safety performance in the selected project corridors. Through implementing and coordinating this subcomponent and additional capacity building activities under the institutional strengthening component, the RSSC is expected to familiarize with the day-to-day function as a lead safety agency and become a permanent office to oversee road safety issues in Jiaozuo. Additional technical support will be provided by the Bank team and road safety related grants, if available, during project implementation. Road Safety Committee Mayor/Vice Mayor/Secretary Members: road safety responsible personnel from each agency Development & Traffic Police Transportation Education Bureau Work Safety Reform Commission Brigade Management Bureau Administration Finance Bureau Transport Bureau Health Bureau Housing and U-R (& Bus Company) Development Bureau Financial Management 5. The FM capacity assessment concluded that the Project FM arrangements satisfy Bank requirements and identified the following principal risk: PMO financial staff's lack of experience in managing complex Bank financed projects. 24

33 6. Mitigation measures to address the above risk have been agreed, including: (i) preparation and issuance of a FMM acceptable to the Bank to standardize project FM procedures; and (ii) in addition to extensive FM training from the Bank, HPFB who has experience with the Bank financed operations will arrange more extensive workshops and experience sharing. The FMM has been finalized and accepted by the Bank prior to project negotiations. 7. Overall, the residual project FM risk after mitigation is assessed as Moderate. 8. The PMO established at the JMFB will be responsible for the project management and implementation, including project FM related day-to-day works including project accounting and financial reporting. The PMO has one financial manager, one accountant, and one staff responsible for the preparation of withdrawal applications. As all of the counterpart funds are included in the government budget, the payment of counterpart funds is the responsibility of the treasury unit within the JMFB. Through observation and review of educational background and work experience of the staff identified for financial and accounting positions in the PMO, the task team concluded that they are qualified and appropriate to conduct the work they are expected to assume. 9. Budgeting. The PMO will prepare the annual project work plan, including the funding resources and budget. All counterpart funds of the project will be included in the municipal government budget. The budget for counterpart funds committed by the government will be reviewed and approved by the local People's Congress and be included in their sectoral budget. Budget variance analysis will be conducted semi-annually by the PMO to inform management of significant variances from plan that may need corrective actions. 10. Funds flow. The Bank loan proceeds will flow from the Bank into a project Designated Account (DA) to be set up at and managed by the HPFB. The HPFB will be directly responsible for the management, maintenance, and reconciliation of DA activities. Supporting documents required for Bank disbursements will be prepared and submitted by the PMO through the JMFB to the HPFB for further disbursement processing. The HPFB will, from the DA, reimburse the funds to the PMO for the Bank financed portion paid by the PMO first or disburse the funds to contractors directly for payment of eligible expenditures. 11. The World Bank loan agreement will be signed between the World Bank and the People's Republic of China through the Ministry of Finance (MOF). The on-lending agreement will be entered into by the MOF and Henan Province through the HPFB, which will be further on-lent to Jiaozuo Municipality through the JMFB. The JMG will be the final debtor. 12. Accounting and financial reporting. The administration, accounting, and reporting of the project will be established in accordance with Circular #13: "Accounting Regulations for World Bank Financed Projects" issued in January 2000 by the MOF. The standard set of project financial statements has been agreed between the World Bank and MOF. 13. Yongyou (User Friend), a computerized accounting and reporting system approved by MOF and assessed by the Bank, will be adopted by the PMO for this project. The detail chart of accounts and project profile will be established before project start. 25

34 14. The PMO will be responsible for the overall project implementation, management, monitoring, and coordination. Original accounting documents for project activities will be retained by the PMO. The PMO will work together with the HPFB to prepare the project financial statements. The unaudited semi-annual project interim financial reports (IFRs) will be prepared and furnished to the Bank by the PMO no later than 45 days following each semester (the due dates will be August 15th and February 15th), in form and substance satisfactory to the Bank. 15. Internal control. The PMO has adequate FM regulations in place. In addition, the project related accounting policy, procedures, and regulations were issued by MOF, and the FMM will be prepared and issued to standardize the project FM procedures. 16. Audit. Henan Provincial Audit Office (HPAO) has been identified as the auditor for the project. The annual audit reports will be issued by HPAO and will be due to the World Bank within six months after the end of each calendar year. HPAO has extensive experience with auditing the Bank financed operations. According to the World Bank Policy on Access to Information, the audit reports for all investment lending operations for which the Invitation to Negotiate was issued on or after July 1, 2010 need to be made publicly available in a timely fashion and in a manner acceptable to the Bank. Audit reports will be made publicly available on the website of the provincial auditor. Following the World Bank's formal receipt of the audited financial statements from the Borrower, the World Bank will also make them available to the public in accordance with the World Bank Policy on Access to Information Disbursements 17. Four disbursement methods are available for the project: (i) advance, (ii) reimbursement, (iii) direct payment, and (iv) special commitment. Supporting documents required for Bank disbursement under different disbursement methods are documented in the Disbursement Letter issued by the Bank. 18. One segregated DA in US dollars will be opened at a commercial bank acceptable to the Bank and will be managed by HPFB. The ceiling of the DA has been determined and documented in the Disbursement Letter. Upon receipt of the PMO's withdrawal application, HPFB will reimburse funds to the PMO for the Bank financed portion paid first by the PMO or directly disburse funds to the contractors for payment of eligible expenditures. 26

35 19. The World Bank loan will be disbursed against eligible expenditures (taxes inclusive) as indicated in the following table: IBRD Loan Allocated Percentage of Category Amount Expenditures (in US$) to be financed (inclusive of taxes) (1) Works for the Project 34,816,000 43% (2) Goods for the Project 60,911, % (3) Consultants' services, non- 4,023, % consulting services, training and workshops and incremental operating costs for the Project (4) Front-end fee 250,000 Amount payable pursuant to Section 2.03 of the Loan Agreement in accordance with Section 2.07 (b) of the General Conditions (5) Interest rate cap or interest rate 0 Amount due pursuant to collar premium Section 2.07(c) of the Loan Agreement Total 100,000, Retroactive Financing. Retroactive financing will not be used under this project. 21. Supervision Plan. The FM supervision approach for this project is based on its FM risk rating, which will be evaluated on regular a basis by the FM specialist in line with the FMSB's FMM and in consultation with the task team leader. The initial FM supervision will focus on financial staff training and compliance with the Bank's FM and disbursement related requirements. Procurement 22. Capacity Assessment. The procurement capacity assessment identified the lack of experience with World Bank financed projects of the procurement staff in the PMO and PIUs and possible influence of domestic procurement practice on project implementation as the principal risks. In particular, the activities under the project will be implemented by multiple government agencies, whose experience in project management and implementation varies. The mitigation measures agreed include: (i) procurement under the project to be centralized to the PMO. The PMO will be responsible for carrying out all the procurement under the project, with assistance from the PIUs and relevant line departments of the government; (ii) an experienced procurement agent to be recruited based on TOR prepared by the PMO and agreed to by the Bank.; (iii) continuous procurement training to be provided by the Bank or training institution 27

36 acceptable to the Bank during project preparation and implementation to raise awareness of the differences between the domestic practices and the Bank's procurement policies and procedures; (iv) a project management consultant to be hired by the PMO to assist with design review and contract management; and (v) PMO to finalize by negotiations a Procurement Management Manual acceptable to the Bank. Overall procurement risk is considered as Substantial. The Procurement Agent has been hired and the Procurement Management Manual has been prepared prior to project negotiations. 23. Applicable Guidelines. Procurement will be carried out in accordance with the "Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011; and "Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011; and the provisions stipulated in the Loan Agreement. National Competitive Bidding (NCB) shall be carried out in accordance with the Law on Tendering and Bidding of the People's Republic of China promulgated by Order of the President of the People's Republic of China on August 30, 1999 subject to the modifications stipulated in the Legal Agreement in order to ensure consistency with Bank Procurement Guidelines. 24. Procurement of Works. Works procured under this project will include civil works under the following components: (i) Safe System Integrated Corridor Management; (ii) Green Corridor Development; and (iii) Public Transport Improvement. Procurement will be conducted using the Bank's Standard Bidding Documents for all International Competitive Bidding (ICB) and National Model Bidding Documents agreed with or satisfactory to the Bank for all NCB. 25. Procurement of Goods. Goods procured under this project will include equipment and instruments under the following components: (i) Safe System Integrated Corridor Management; and (ii) Public Transport Improvement. Procurement will be done using the Bank's Standard Bidding Documents for all ICB and National Model Bidding Documents agreed with or satisfactory to the Bank for all NCB. 26. Selection of Consultants. Consultants selected under this project will provide services to the following components: (i) Safe System Integrated Corridor Management; and (ii) Institutional Strenghening. Selection will be conducted using the Bank's Standard Request for Proposals for all Quality- and Cost- Based Selection (QCBS) and Quality- Based Selection (QBS). Consutlants that are Universities and Government Research Institutions will be selected in accordance with the provisions of 1.13(c) and 2.8 of the Consutlant Guidelines. 27. Training, Workshops and Study Tours. Plans for training, workshops and study tours will be developed by the PMO and included in the project annual work plan for Bank review. Expenditures incurred in accordance with the approved plans for training and workshops will be the basis for reimbursement. 28. Procurement Plan. A Procurement Plan has been prepared by the PMO and agreed with the Bank prior to project negotiations. It will be made available in the project's records and on the Bank's external website. The Procurement Plan will be updated annually or as required to reflect implementation needs and improvements in institutional capacity. 28

37 29. Frequency of Procurement Supervision. Prior review supervision will be carried out through the World Bank. Procurement post reviews will be carried out by the Bank every 12 months. The procurement post review sampling ratio will be one out of five contracts. 30. Thresholds for Prior Review and Procurement Method. The thresholds for procurement method and prior review are indicated in the table below: Description Thresholds for Procurement Method Thresholds (--) ICB < US$25,000,000 NCB <US$200,000 Shopping (--) ICB < US$3,000,000 NCB <US$100,000 Shopping Consultant (--) QCBS/ QBS Services <=US$300,000 CQS Thresholds for Prior Review Description Contracts subject to Prior Review ICB All First 2 NCB works contracts by Works NCB each PIU irrespective of value and all contracts >= US$10,000,000 Direct Contracting All ICB All First 2 NCB goods contracts by Goods NCB each PIU irrespective of value and all contracts >=US$ 1,000,000 Direct Contracting All Consulting firm selection >=$300,000.n a. First 2 IC contracts irrespective of Cn iv d al co s lt nts le tinngal value. e Conviesul SSS (firm) All SSS (individual) >=$20,000 First 2 CQS contracts irrespective of Value. ICB=International Competitive Bidding; NCB=National Competitive Bidding; 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; (-) = Not Applicable 31. Retroactive financing. There are no contracts to be procured under retroactive financing. 29

38 Environmental (including Safeguards) 32. The majority of the project (Components A and C as well as approximately half of Component B) is in the urban area of Jiaozuo City where land is already heavily influenced by human activities. An 8 kilometer loop of the green corridor, as part of the 16.9 kilometer green corridor (about 5 meters wide) dedicated to pedestrians and cyclists, will be situated in a mountain area to the north of the urban area; however, no ecologically sensitive sites (e.g. natural habitats, natural forests) are impacted along the alignment. There are six PCRs in the vicinity of the alignment of the green corridor. The project therefore triggers Environmental Assessment (OP4.01) and Physical Cultural Resources (OP 4.11). The project is classified as a Category B project. 33. Environmental Assessment (OP4.01). The PMO has engaged an EA consulting firm to prepare an EA for the proposed project in accordance with the Chinese EA laws/regulations and the Bank safeguards policies. As part of the EA process, alternatives of the green corridor have been compared and the final alignment was selected to avoid impacts on sensitive sites including PCRs. Options for the safe system integrated corridors have been considered during the feasibility study and EA process. 34. The project, by design, will bring about positive impacts such as the improvement of road safety, reduction of traffic congestion and accidents, as well as contribute to the reduction of vehicle emissions in the selected areas of Jiaozuo City. However, it will also cause general construction related impacts, such as disturbance to local communities and traffic, dust, noise, wastewater, and disposal of spoil materials. During operation, major adverse impacts will include: (i) disposal of waste and wastewater generated at the bus depots; (ii) safety issues related to gas filling facilities at the bus depots; and (iii) disposal of waste generated by the green corridor users. The green corridor will connect to the entrance of two recreation parks (i.e. Fengshan Park, Longyuanhu Park), and pass through one park (i.e. Renming Park) which features recreation squares and vegetation in the urban area. Fengshan Park in the northern mountain used to be a stone pit quarry and was reclaimed to a recreation park. Renming Park and Longyuanhu Park are man-made urban park/garden built in 1957 and 2006 respectively. There parks are not considered as natural habitats. The EMPs included measures to avoid and mitigate adverse impacts on trees and vegetation, and timely restore the affected vegetation in the project influence area. It is estimated that the green corridor will attract 670 people on a daily basis and 1,400 per day at the peak season. These green corridor users will not likely pose significant pressures on the PCRs and the parks along the green corridor, given that these users accounts for a small percentage of the total people visiting the sites. The EA confirms that potential negative impacts are small scale, site-specific, and can be readily mitigated with good engineering design and good construction management practices. 35. Based on the EA, a stand-alone EMP have been developed, including, amongst others, the following: (a) ECOPs for construction contractors have been developed to address construction related impacts including solid and wastewater management, source and transport of construction waste and materials, and disturbance to local businesses etc.; 30

39 (b) For reallocation of road space, the ECOPs specify requirements for notification of public civil works, restoring local businesses during construction, on-site traffic safety management, and mitigation of other construction related nuisances; (c) For the bus depots, mitigation measures have been developed to collect and dispose of waste and wastewater generated during the operation phase. Risk assessment has been conducted for the gas filling facilities, and risk mitigation measures have been proposed in the EMP; and (d) For the proposed green corridor, mitigation measures have been developed for both general impacts from construction and site-specific environmental impacts and special considerations have been given to the road safety design, good drainage provisions, as well as inclusion of toilets and garbage bins for the green corridor users. 36. Physical Cultural Resources (OP4.11). There are six PCRs in the vicinity of the alignment of the green corridor, i.e. Qunying Aqueduct; Wanglanguang Grave, Niangniang Temple, Dangyangyu Porcelain Kiln Site, Longsi Cemetery and Yuanrong Temple. The first four are classified as registered cultural relics, and the last two are un-registered PCRs. Site investigation has been conducted by the EA consultants, together with consultation with the PCR specialist and local PCR Management Authority. The EA concluded that the green corridor will not have significant impacts on the PCRs during construction and operation phases. Jiaozuo PCR Management Authority has approved the alignment of the green corridor. Taking a precautionary approach, specific measures for PCRs conservation have been proposed in the EMP, including: (i) further site survey will be conducted prior to construction; (ii) the construction plan will be sent to the PCR Authority for further review and comments; (iii) construction will be designated in the area out of the PCR's protection area; (iv) heavy machinery will be strictly restricted in the area close to these PCRs; and (v) Chance Find Procedures for PCRs are included in the civil work contracts. 37. The EMP specifies institutional arrangements during the construction and operation phases, capacity building activities, a monitoring plan, and the budget for the EMP implementation. An environmental management unit with qualified and designated staff will be established within the PMO. Contractors and supervision engineers will be required to assign qualified environmental staff to their team to ensure effective implementation of the EMPs. 38. In accordance with OP4.01, public consultations have been conducted during the EA process, including questionnaire surveys and meetings with project affected people and local Environmental Protection Bureau and PCR Management Authority. The consultation on the EA TOR was undertaken in June to July 2013; and the consultation on the EA and EMP in September Information about the project, potential environmental and social impacts, as well as planned mitigation measures has been provided to the public during consultations. Local people generally supported this project, and gave comments on how to reduce construction impacts. PCR Management Authority provided specific recommendations on the selection of the green corridor. Feedback and concerns from the consultation have been addressed in the project design and in the EA and EMP. 31

40 39. The EA and EMP were locally disclosed at the governmental website and the PMO on November 14, The EA and EMP were disclosed on the Bank InfoShop on January 8, 2014 and January 22, 2014, respectively. Social (including Safeguards) 40. Involuntary Resettlement (OP4.12). For the proposed project, the components of Safe System Integrated Corridor Management (A), Green Corridor Development (B), and Public Transport Improvement (C) will require civil works. For Component A, according to the final feasibility study, most of the proposed measures will be carried out within the existing right-ofway. For Component B, it involves the construction of a 16.9 kilometer pathway for bicycles and pedestrians connecting the northern mountainous area to Renmin Park and Longyuan Lake Park in the center of the city. A total of 9.06 ha of land will be acquired, including 5.86 ha of state owned land and 3.2 ha of collectively owned slope land from four villages. No house demolition or relocation is required. For Component C, it involves the construction of one bus interchange and five bus depots. Since the interchange will be constructed within the existing station plaza, no new land acquisition will be required. For the five bus depots, two of them - ZhongZhan and Macun Bus Depots will be upgraded within the existing depot area with no new land acquisition. Three new bus depots, Dongxuegu, Yimen, and Dabeizhang Bus Depots will involve the acquisition of about 7.76 ha of land, affecting four villages in two districts. Most of the acquired land is farmland. No house demolition or relocation is required. During the construction of Components B and C, a total of 4.3 ha of land would be occupied temporarily. Based on the screening for all three components, there are no locally funded projects linked with the proposed project. 41. For all the impacts from Components A, B and C, a RAP and a RPF have been prepared by the Jiaozuo PMO in accordance with relevant Chinese laws, regulations, and World Bank OP4.12. A RPF is prepared for the following considerations: (i) whether Component A will eventually involve any land acquisition and structure demolition is pending on the completion of the project detailed design; and (ii) the scope of Component B and C might change during implementation. For the currently identified land acquisition and resettlement impacts under Components B and C, the proposed compensation for land is set at CNY34,000 to CNY62,000 per mu (US$83,606 to US$152,459 per ha) among the affected villages, which is based on the most recent provincial regulation on comprehensive land price for acquired land areas in Under the overall management of resettlement leading group in Jiaozuo City, the PMO will lead resettlement operations. They will work closely with the Jiaozuo Land Resources Bureau and Jiaozuo Urban Demolition and Resettlement Office under the Housing and Urban- Rural Development Bureau, with the cooperation of working groups in town and sub-district. During resettlement implementation, an experienced external monitoring agency will be selected to conduct independent resettlement monitoring and evaluation. The monitoring results will be regularly reported twice a year and, if needed, remedial actions will be designed. 43. On Indigenous Peoples (IP) Policy, a social screening was conducted in the project affected areas, which is based on the discussion with local government agencies and consultation with the affected people. There are no ethnic minority communities in the project areas and the Bank's policy on IP is not triggered. 32

41 44. In addition to social safeguards, the project will also involve some broader social issues, particularly gender considerations of project design and implementation. The focus of the project on public transportation, non-motorized green corridor and accessibility for pedestrians as well as safety improvement will have positive impact on women as they are more likely to walk, cycle and use public transport, and travel to multiple destinations at off-peak times. Based on the survey and group discussions, a set of gender sensitive recommendations were collected and passed to the design team. An important gender-sensitive intervention included in the project design is to provide reliable public transport for primary and middle school children. It is found that mothers are usually the member in the family to spend time taking the children to school; with the improved public transport, they will experience less waiting time at the bus stops and delay in journey. Therefore, the intervention will have a positive impact on women's timepoverty and workload. 45. The RAP and RPF were locally disclosed at the government website and the PMO on November 27, The RAP and RPF were disclosed on the Bank InfoShop on January 24, 2014 and January 8, 2014, respectively. Monitoring & Evaluation 46. A results framework has been developed (see Annex 1) and provides the basis for project M&E. Methodology for data collection and baseline data availability of each PDO-level indicators are described below. The intermediate results indicators are straightforward and the baseline data have been provided by the PMO. The PMO will be responsible for monitoring implementation progress and collecting actual data for each indicator regularly. Bank financing has been allocated under Component D3 to cover the incremental costs of the project M&E. 47. Number of annual transport related fatalities along the project corridors. Jiaozuo Traffic Police has an existing system for traffic accident statistics and the project M&E will utilize this existing statistical system. Baseline data of a 3-year rolling average (Year 2011, 2012 and 2013) of the total fatalities on the three project corridors is collected. Component Al will engage a road safety consultant to assist the Traffic Police/RSSC to improve its data reliability and analytical work. As part of the technical assistance, annual accident data will be disaggregated by gender and age, and a control corridor will be introduced for comparison purposes. 48. Travel time by public transport during peak hours on the project corridors. Baseline data has been collected by the feasibility study consultant during project preparation through on-site observation. The project will finance the on-board GPS units for the buses, which can serve as a reliable tool for collecting bus travel times after installation. 49. User satisfaction ratio of public transport services. A public transport user satisfaction survey has been carried out and the baseline data have been collected and disaggregated by gender. A survey using the same methodology will be carried out by the bus company in year 5 of project implementation. The costs will be funded by Component C3. 33

42 50. Annual number of non-motorized trips within the green corridor. The baseline data is zero since the corridor has not yet been built. Actual data in year 4 and 5 will be collected through on-site observation and the costs will be funded by Component C3. 34

43 Annex 4: Operational Risk Assessment Framework (ORAF) CHINA: Jiaozuo Green Transport and Safety Improvement Project Project Stakeholder Risks Rating Moderate Description: Risk Management: (a) JMG's support and commitment to NMT and public (a) The Bank team will continue to share with JMG international experience on how to achieve transport promotion may be adversely affected due to rapid a livable and sustainable city through NMT and public transport promotion during motorization and increasing private car users, which will implementation, and ensure that JMG remain fully committed to the PDO. hamper the achievement of the PDO. (b) The gender recommendations have been reflected in the designs of the feasibility study. The (b) A gender survey was carried out during preparation and task team will make sure that the detailed designs will incorporate the gender recommendations the recommendations have been passed on to the design team. and such designs will be implemented to address women and children's concerns. Positive social impacts may be jeopardized if design to address considerations to women and children is not carried out during implementation. Resp: Bank & Client Stage: Implementation Due Date: Recurring Status: Ongoing Implementing Agency Risks (including fiduciary) Capacity Rating: Substantial Description: Risk Management: (a) Since this is the Bank's first engagement with Jiaozuo (a) Substantial trainings on Bank's financial management, procurement, environmental and Municipality, there is no precedent for fulfilling Bank's social safeguards policies have been provided during project preparation to the PMO and fiduciary and safeguards requirements. relevant agencies and will be continued through implementation. Adequate resources will be (b) Implementation, operation, and maintenance of urban allocated by the Bank team to monitor the PMO and local agencies' compliance. transport systems, including civil infrastructure, bus fleet, and (b) The Bank team will urge the PMO to hire experienced consultants to carry out the design of ITS, demand high levels of technical capacity. Currently, lack the project. Capacity building activities will be carried out to enhance the technical capacity of of technical capacity with the PMO as well as the relevant relevant local agencies during implementation. agencies, especially in terms of the "soft" elements such as ICM, ITS and Safe System approach, poses a major risk to the achievement of the PDO. Resp: Bank & Client Stage: Implementation Due Date: Recurring Status: Ongoing Governance Rating: Moderate Description: Risk Management: (a) The PMO is established at the Jiaozuo Finance Bureau, (a) The PMO will hire consultants to strengthen its technical capacity for project which is traditionally responsible for budget allocation but implementation. The PMO will seek the PLG for support if key issues arise related to overall may lack appropriate decision making on key technical management and critical decision making. aspects related to transport. (b) The PLG will be responsible for overseeing project implementation and aligning the (b) The design and physical works of each project activity objectives and priorities of the PIUs. The Bank team will closely monitor the PIU's will be carried out by the various PIUs, who have different commitment to the PDO during implementation. sector objectives. There is a potential risk of failure to align (c) There has been a strong growth in infrastructure investment in Jiaozuo during the past five these various objectives towards the PDO. years. Transport infrastructure investment will remain on top of ZMG's agenda and ZMG has (c) The increasing government borrowing poses a potential committed that the investments under the proposed project would be prioritized in its annual 35

44 risk to the timely availability of counterpart funds. The investment program. The availability of counterpart funds and JMG's commitment to the project may not receive adequate allocation from the project will be closely monitored during implementation. municipal fiscal budget considering the competing priorities that JMG faces. Resp: Client Stage: Implementation Due Date: Recurring Status: Ongoing Project Risks Design Rating: Substantial Description : Risk Management: (a) "Soft" elements of the project design, such as ICM, ITS (a) The Bank team will urge the PMO to hire experienced consultants to carry out the detailed and Safe System approach, are relevant new concepts to the designs of the components. The Bank team will also work closely with the PMO and mobilize PMO and PIUs. This unfamiliarity may lead to risks international and domestic expertise to assist the client with detailed designs and associated with technical approaches to underpin safety and implementation. Capacity building activities will be carried out to enhance the capacity of efficiency in the project. relevant municipal agencies during implementation. (b) The green corridor component is a first pilot in Jiaozuo to (b) The client will retain international and/or domestic experts who can advise on operational promote NMT trips. The client is open to adopting new and technological practices and advancements prior to procurement. Any changes technologies or strategies to ensure that the final outcomes are recommended to the project detailed designs after approval will be measured on a cost-benefit aligned with current international best practices. However, basis. Further, procurement of ITS equipment will be thoroughly vetted based on market changes in technology or operational practices could lead to analysis. cost escalations that may result in project cost overruns compared to feasibility study cost estimates. Resp: Bank & Client Stage: Implementation Due Date: Recurring Status: Ongoing Social & Environmental Rating: Moderate Description : Risk Management: The project will involve civil works, which may entail Environmental: negative social and environmental impacts. (a) Safeguards training has been provided to the client and an environmental supervision consulting firm has been procured as a third party entity to ensure that the EMP is being Environmental: followed during construction. Capacity buildings activities are included in the EMP. If the EMP is not properly followed during implementation, negative impacts on the local environment will occur Social: regardless of the quality of the plan. (a) Safeguard training has been provided to the client along with RAP preparation, and a resettlement monitoring and evaluation agency will be selected to ensure that RAP is being Social: followed during implementation of land acquisition and resettlement. In addition, a grievance (a) The project involves a modest amount of land acquisition mechanism has been included in the RAP, which has been disclosed to the affected people. and resettlement; however, the PIUs do not have experience (b) The Bank team will ensure that the detailed designs incorporate the gender considerations, with implementing Bank resettlement policies and if the RAP especially on subcomponents that could improve women's safety and accessibility. is not properly followed during implementation, negative impacts on the housing and livelihoods of local residents could easily occur. (b) Gender consultations have been conducted and the recommendations have been passed on to the design team. Resp: Bank & Client Stage: Implementation Due Date: Recurring Status: Ongoing Positive social impacts may be jeopardized if design to address considerations to women is not carried out during implementation. 36

45 Program & Donor Rating: Low Description : Risk Management: There are no other projects/activities or other development N/A partners in the same program. Resp: Stage: Due Date: Status: Delivery Monitoring & Sustainability Rating: Moderate Description: Risk Management: (a) There is a risk that the 'soft' elements, such as public (a) The Bank will work closely with the client and provide value addition during transport service improvement, traffic management, and implementation to ensure the delivery quality of 'soft' elements. Capacity building through public awareness may not be implemented to a high quality, workshops, training, and study tours will highlight relevant technical aspects. which might hamper the overall sustainability of the project. (b) The Bank will assist the client to establish an appropriate institutional framework for (b) The sustainability of the green corridor will not be operating and maintaining the green corridor with dedicated staff and funding as necessary. possible unless adequate funds for operation and maintenance (c) Project technical assistance will aim to assist the client with the development of a longare allocated and there is designated staff. term strategy to deal with future urban transport issues that address the growing number of (c) The outcome of the project may not be sustained due to tourists and cars in Jiaozuo in a sustainable manner. transformation in development priority from 'people' to 'vehicle'. With the continued growth in the number of private vehicles, Jiaozuo might return to plans for road construction to cater to motorization trends, especially if they appear to Resp: Bank & Client Stage: Implementation Due Date: Recurring Status: Ongoing support further tourism development. Overali Risk Following Review Implementation Risk Rating: Moderate Comments: The major risks with project implementation are related to: (a) implementing agency capacity; and (ii) project design. (a) This is the PMO's first Bank infrastructure investment project and it is not familiar with the Bank's fiduciary and safeguards policies. (b) The Safe System approach requires shared responsibility and accountability among all relevant stakeholders, including the road designers, road operators and road users. Failure to address the institutional issue may jeopardize the long-term sustainability of the project outcomes. (c) The project design concepts, such as and Safe System (CM approach, are relatively new to the local agencies of JMG. They may lack the capacity to implement these elements with satisfying quality, which will hamper the achievement of the PDO. (d) Growing government borrowing poses a potential risk to the timely availability of counterpart funds. JMG may fail to allocate sufficient counterpart funding from the municipal fiscal budget to support the project investments, considering the competing priorities that the local government faces. Trainings are the Bank's safeguards and fiduciary requirements have been provided to the PMO and PIUs during preparation and will be continued throughout implementation. The Bank team will allocate adequate resources for technical support and project supervision (including monitoring of the availability of counterpart funds) during implementation. Extensive capacity building programs will be provided to enhance local agencies' capacity in dealing with urban transport issues so that the project outcomes will be sustainable. 37

46 Annex 5: Implementation Support Plan CHINA: Jiaozuo Green Transport and Safety Improvement Project Strategy and Approach for Implementation Support 1. The strategy for implementation support plan is based on the risk assessment through the ORAF process. It aims at making implementation support to the client more efficient and effective. The strategy focuses on implementation of the risk mitigation measures defined in the ORAF to ensure high quality and sustainable outputs that support the PDO while meeting Bank implementation and safeguard standards. The following risk categories are rated as "Substantial" or "Moderate": (i) stakeholder; (ii) capacity; (iii) governance; (iv) design; (v) social and environmental; (vi) delivery monitoring and sustainability. 2. Stakeholder. The proposed approach is to engage Jiaozuo Municipality in a vision of sustainable and livable city development through international experience sharing and capacity building during project preparation and implementation. In addition, a public consultation and participation strategy will be devised and implemented to ensure the cooperation of local stakeholders. 3. Capacity. The project will include a comprehensive capacity building program, comprising: (i) training activities to the PMO by World Bank technical, procurement, financial management, and safeguard specialists (including a gender specialist); and (ii) capacity building activities to the municipal agencies responsible for implementing the various subcomponents that will focus on planning, operation, and maintenance of a modern public transport system and traffic management. 4. Governance. The Bank team will monitor the performance of the PMO and the commitment of the PMO and PIUs to the achievement of PDO during implementation. The Bank will seek the PLG for support and devise remedial measures if required. 5. Design. The task team will retain technical specialists for integrated corridor management, road safety improvement, and public transport priority to review detailed designs and procurement documents. In addition, periodical capacity building activities will be conducted during implementation to ensure that the key staffs in the PMO and PIUs understand the project concept. 6. Social and Environmental. The Bank team has reviewed the EIA/EMP and RAP/RPF prepared by the client, and ensured that these instruments are specific and comprehensive yet practical and achievable. Trainings on safeguards policies will be continued during implementation and adequate resources will be allocated for monitoring the PMO's compliance. 7. Delivery Monitoring and Sustainability. The Bank will closely monitor the detailed design and implementation of the project components to ensure the quality of delivery. In addition, the capacity building activities and technical assistance offered to the bus companies, traffic police, permanent road safety committee, and PMO/PIUs will be planned to facilitate quality of delivery as well as the project's long-term sustainability. 38