People s Republic of China: Emergency Assistance for Wenchuan Earthquake Reconstruction Project

Transcription

1 Validation Report Reference Number: PVR-462 Project Number: Loan Number: 2508 December 2016 People s Republic of China: Emergency Assistance for Wenchuan Earthquake Reconstruction Project Independent Evaluation Department

2 ABBREVIATIONS ADB Asian Development Bank km kilometer PCR project completion report PMO project management office PPMS project performance monitoring system PRC People s Republic of China RRP report and recommendation of the President TA technical assistance NOTE In this report, $ refers to US dollars. Key Words adb, asian development bank, disaster management, earthquake, education, emergency assistance, lessons, people s republic of china, performance evaluation, reconstruction, rehabilitation, transport, validation The guidelines formally adopted by the Independent Evaluation Department (IED) on avoiding conflict of interest in its independent evaluations were observed in the preparation of this report. To the knowledge of IED management, there were no conflicts of interest of the persons preparing, reviewing, or approving this report. The final ratings are the ratings of IED and may or may not coincide with those originally proposed by the consultant engaged for this report. In preparing any evaluation report, or by making any designation of or reference to a particular territory or geographic area in this document, IED does not intend to make any judgments as to the legal or other status of any territory or area.

3 PROJECT BASIC DATA Project Number PCR Circulation Date Aug 2015 Loan Number 2508 PCR Validation Date Dec 2016 Project Name Emergency Assistance for Wenchuan Earthquake Reconstruction Project Sector and subsector Transport Road transport (non-urban) Theme and subtheme Economic growth Widening access to markets and economic opportunities Safeguard categories Environment B Involuntary Resettlement B Indigenous Peoples C Country People s Republic of China Approved Actual ADB Financing ($ million) ($ million) ($ million) ADF: 0.00 Total Project Costs OCR: Loan Borrower Beneficiaries Others Cofinancier Total Cofinancing Approval Date 19 Feb 2009 Effectiveness Date 21 Jun Jun 2009 Signing Date 23 Mar 2009 Closing Date 30 Jun Jun 2013 Project Officers Location From To M. Parkash W. Zhang X. Guangrui ADB headquarters PRC Resident Mission PRC Resident Mission Feb 2009 Feb 2010 Mar 2012 Jan 2010 Mar 2012 Mar 2014 IED Review Director V. Salze-Lozac h, Deputy Director General, IED and Officer-in-Charge, IED2 Team A. Perdana, Evaluation Specialist, IED1 F. Ahmed, Lead Evaluation Specialist, IED1 F. D. De Guzman, Senior Evaluation Officer, IED2 P. Choynowski, Consultant ADB = Asian Development Bank; ADF = Asian Development Fund; IED = Independent Evaluation Department; IED1 = Independent Evaluation Department, Division 1; IED2 = Independent Evaluation Department, Division 2; OCR = ordinary capital resources; PCR = project completion report; PRC Resident Mission = People s Republic of China Resident Mission. A. Rationale I. PROJECT DESCRIPTION 1. An earthquake with a magnitude of 8.0 struck Wenchuan County on 12 May 2008, which was about 92 kilometers (km) northwest of the Chengdu, the provincial capital of Sichuan, People s Republic of China (PRC). The earthquake affected a wide area, causing extensive damages and heavy losses in Sichuan, Shaanxi, and Gansu provinces, including seven other provinces (Chongqing, Yunnan, Hubei, Guizhou, Henan, Shanxi, and Hunan). The total disaster area covered 500,000 square kilometers, in which the 51 worst-affected counties in Sichuan, Shaanxi, and Gansu provinces covered 130,000 square kilometers.

4 2 2. The impacts of the earthquake were devastating. A large number of rural and urban houses collapsed, infrastructure facilities were damaged on a large scale, agriculture and industry suffered heavy losses, and there was severe environmental destruction. Information gathered as of 25 September 2008 indicated that of the million affected people, 69,227 were dead, 374,643 were injured, 17,923 were missing, and 1.5 million people had to be evacuated. About 8 million homes were destroyed and 24.5 million damaged, and 17,951 educational institutions were either destroyed or damaged. Transport, infrastructure, power supply, water and sanitation facilities, critical infrastructure such as hospitals and clinics and lifeline facilities, and communications were destroyed or badly damaged throughout the affected region. The total direct economic loss caused by the Wenchuan earthquake was estimated at CNY852,309 billion, representing 3.3% of the country s gross domestic product for the 2007 fiscal year. After the damage and needs assessment, the government identified specific sectors requiring emergency assistance in two of the worst earthquake-affected provinces (Sichuan and Shaanxi). 1 B. Expected Impact, Outcome, and Outputs 3. The Emergency Assistance for Wenchuan Earthquake Reconstruction Project was to support the efforts of the government to (i) restore the livelihood and economic activities of the affected population; (ii) accelerate poverty alleviation in the earthquake-affected counties, many of which had a high incidence of poverty; and (iii) rehabilitate and reconstruct public and community-based infrastructure vulnerable to natural disasters. Its envisaged impact was the accelerated restoration of transport and education infrastructure in earthquake-affected areas of Sichuan and Shaanxi provinces. 4. The project s expected outcome was restored people s access to transport and education infrastructure to pre-earthquake levels in 19 counties of Sichuan Province and four counties of Shaanxi Province.Project outputs comprised three components: (i) rrehabilitation of earthquake-damaged roads and bridges in 19 counties of Sichuan Province and four counties of Shaanxi Province, (ii) rehabilitation of earthquake-damaged educational institutions in three counties of Shaanxi Province, and (iii) capacity development support. C. Provision of Inputs 5. The loan was approved on 19 February 2009 and became effective on 24 June The actual closing date was 30 June 2013 a year after the expected schedule, with one extension. The total project cost was estimated at $441.6 million, including contingencies, taxes and duties, interest during implementation, and other charges. The Asian Development Bank (ADB) provided a loan of $400 million from the ADB ordinary capital resources to finance the project. The central Government of the PRC was to make the loan proceeds available to the Sichuan and Shaanxi provincial governments on a grant basis, while the provincial and local governments were to provide the counterpart financing for project management and the remaining costs of construction not covered by ADB financing. The actual project cost increased to $586.1 million due to price escalation of materials, local currency appreciation, and additional works required during implementation. The borrower covered the additional cost so the loan amount was unchanged. ADB approved a $700,000 attached technical assistance (TA) grant on 19 February 2009 to (i) build capacity for project implementation, (ii) build capacity for rural road 1 ADB Report and Recommendation of the President: Proposed Loan to the People s Republic of China for the Emergency Assistance for Wenchuan Earthquake Reconstruction Project. Manila.

5 3 construction in Sichuan and Shaanxi provinces, and (iii) establish model schools and train teachers in Shaanxi Province. 6. According to the project completion report (PCR), 2 the cost of project components in Sichuan Province increased by 32.7% from $340.9 million to $452.4 million. The increase resulted from (i) price escalation of materials and labor in Sichuan because of the large investment in reconstruction during , (ii) improved design to ensure greater capacity to withstand disasters, (iii) cost adjustment for more protection works to prevent landslides during the rainy season, and (iv) appreciation of the local currency during project implementation. 7. The cost of project components in Shaanxi Province increased by 15.1% from $100.7 million to $115.7 million. The increase was a result of (i) price escalation of materials, (ii) restoration of roads damaged by floods in 2010, and (iii) currency appreciation during project implementation. The total counterpart funding increased from $41.6 million to $168.1 million, an increase from 9.4% to 29.6% of the total funding requirement, of which the central government provided $110 million and the local governments provided $58.2 million. Only $0.1 million was paid from the ADB loan in 2009 for interest and commitment charges during construction. The Ministry of Finance paid the remaining costs through a special arrangement for the emergency loan. Unused loan proceeds of $35.1 million for interest and commitment charges during construction were reallocated for civil works. 8. The project was classified Category B under the ADB environmental categorization requirements. Any adverse environmental impacts were mainly limited to the construction stage and were considered manageable since these were reversible in the short term and affect a limited area. The project acquired mu 3 of land in Shaanxi, 29.7% more than estimated in the resettlement plans, and affected 575 households, 11.7% more than estimated. A total of 10,435.2 square meters of houses and buildings were demolished, 36.6% less than estimated, affecting 162 households, 3.6% less than estimated in the resettlement plans. The increased land acquisition was due to additional area needed to deal with landslides caused by floods during project implementation and low cost estimates. Affected persons were adequately compensated. There were no indications that indigenous peoples were affected. 9. The project was allocated 1,698 person-months of national consulting services, 1,404 person-months for Sichuan Province and 294 person-months for Shaanxi Province. Construction supervision consultants were to be hired to monitor the implementation of civil works, environmental protection, resettlement, and project performance. Given the emergency nature of the projects, the consultants were to be recruited through single-source selection. D. Implementation Arrangements 10. The Sichuan Provincial Transport Department was designated as the executing agency, responsible for overall administration of project implementation in Sichuan. The Sichuan Highway Administration Bureau was the implementing agency for project implementation, and established the project management office, which employed technical, financial, project management and safeguard experts. Hanzhong and Baoji city governments were the project 2 ADB Completion Report: Emergency Assistance for Wenchuan Earthquake Reconstruction Project in the People s Republic of China. Manila. 3 A mu is a Chinese unit of measurement (1 mu = square meters).

6 4 executing agencies in Shaanxi. Each executing agency established a project management office (PMO), headed by a project director and supported by a project management team. 11. The PCR indicated that no covenants were modified or waived during implementation. Two covenants were being complied with at the time of the PCR. The provincial audit offices of Sichuan and Shaanxi audited project accounts and financial statements of their respective provinces and the reports were submitted on time (PCR, para. 21). II. EVALUATION OF PERFORMANCE AND RATINGS A. Relevance of Design and Formulation 12. The PCR rated the project highly relevant at appraisal and completion. It indicated that the project was aligned with the government s development strategy and to the ADB operating priorities, including the Disaster and Emergency Assistance Policy, 4 to support national and provincial governments and other stakeholders to overcome damage caused by calamities. The PCR also indicated that the project was a response to the country s regulation on post- Wenchuan earthquake disaster recovery and reconstruction issued by the PRC government on 8 June 2008 and is consistent with the PRC's Eleventh ( ) and Twelfth ( ) Five-Year Plans. Rural road development was a priority for the PRC for achieving the goal of a harmonious society. The overall objective of the Rural Road Development Plan, approved by the State Council in February 2005, was for all townships and villages in the PRC to be accessible by paved roads by 2020.The affected local communities actively participated in the selection, design, implementation, operation, and maintenance of all works carried out under the project. 13. This validation acknowledges that this emergency assistance was conducted in a timely manner, under close coordination with the government and donors. The project was based on the government s damage assessment and drew on the experiences of ADB in delivering emergency assistance, rehabilitation, and reconstruction. The project also involved community participation in project design, implementation, and maintenance. On this basis, the project is assesses highly relevant. B. Effectiveness in Achieving Project Outcomes and Outputs 14. The PCR rated the project effective in achieving the project outcome. The performance targets in the design and monitoring framework both in the report and recommendation of the President (RRP) and in the PCR were to restore travel time to pre-earthquake levels by and restore the number of children attending school to pre-earthquake levels by December 2011.The PCR indicated that traffic flow and travel time on the roads and bridges were restored or exceeded pre-earthquake levels when the rehabilitated or reconstructed rural roads were opened to the public. Rural areas have also regained access to paved and all-season roads, making it easier for children to go to school. 15. The project has also delivered its expected outputs, which are (i) 3,467 km of roads rehabilitated or reconstructed with improved design standards by December 2011 in Sichuan Province, but is 33 km short of the target of 3,500 km; (ii) 317 km of roads rehabilitated or reconstructed with improved design standards by December 2011 in Shaanxi Province; and 4 ADB Disaster and Emergency Assistance Policy. Manila.

7 5 (iii) the rehabilitation or reconstruction of 12 schools by December 2011 in Shaanxi Province. 5 Another output was completed in April 2013 from the initial target of September This was the capacity building support for (i) implementing agencies for their speedy and smooth project implementation, (ii) schools and teachers, and (iii) project staff were trained for sustainable road operation and maintenance systems. 16. This validation would like to note that the PCR did not provide the data on pre- and postearthquake school attendance, so it lacks the basis to show that the second outcome indicator has been achieved. However, since the other outcomes and most of the outputs were achieved, this validation also assesses the project effective. C. Efficiency of Resource Use in Achieving Outcomes and Outputs 17. The PCR rated the project efficient in achieving outcomes and outputs. It stated that the project benefited the project area through (i) savings in vehicle operating costs from shorter travel time and improved traffic conditions, (ii) time savings, (iii) benefits from generated traffic, (iv) fewer accidents, (v) value-added of businesses along rural roads attributable to the project, and (vi) better education for employment and participation in economic activities. 18. The project s closing date was extended by a year from 30 June 2012 to 30 June Several factors contributed to the extension: (i) the slow approval of the design and the first bidding document, (ii) geologic hazards including landslides and collapse caused by torrential rain and floods in the project area in 2010 and 2011 in Shaanxi, and (iii) the change of design to coordinate with the construction of the Shiyan Tianshui expressway. 19. While the PCR documented most of the benefits from roads, it lacked discussion on the education outcome or outputs. Given the available information, this validation still considers that project benefits still exceed the cost and, thus, assesses the project efficient. D. Preliminary Assessment of Sustainability 20. The PCR rated the project likely sustainable and cited several reasons: (i) the project was designed and constructed in accordance with required engineering standards and latest seismic codes and is considered to be of sufficient quality to meet the design service life; (ii) the training provided through the TA grant strengthened the capacity of the executing and implementing agencies to ensure sustainable operation and maintenance; (iii) the executing and implementing agencies accumulated technical and administrative capacity for the management of construction and maintenance of rural roads and schools; and (iv) the Sichuan Provincial Transport Department, Shaanxi Provincial Transport Department, and the local governments are committed to maintaining the local roads and rural road networks. 21. Except for the first point, this validation notes that the PCR did not provide enough sources and evidences to show that the above conditions were met. Nevertheless, based on the information provided, this validation assesses the project likely sustainable. E. Impact 22. The PCR did not rate the impact of the project. But it noted that the rehabilitated road network resulted in better transport conditions and increased traffic capacity in the project area, 5 Of this number, two model schools were to be set up with multimedia facilities and science laboratories.

8 6 hence, creating better access to markets for local agricultural products, with more agricultural enterprises being established in rural areas. Local employment also increased during project implementation. Improved traffic conditions allowed people, especially those from remote areas, to take public buses or motorcycles to work, ensuring that more people participated in off-farm activities. The rebuilt schools, as well as the TA grant to train teachers, will also provide better access and quality of education. 23. Between 2008 and 2013, 19 project counties and cities in Sichuan experienced increase in income per capita of 45% 150% and a decline in poverty rate. This indicates that the project has helped the welfare recovery of the rural households. In this validation s view, the project s impact was satisfactory. 6 III. OTHER PERFORMANCE ASSESSMENTS A. Performance of the Borrower and Executing Agency 24. The PCR rated the performance of the borrower, executing agencies, and PMOs in Sichuan and Shaanxi provinces satisfactory. It stated that the PMOs were established on time with adequate staff resources. The Shaanxi provincial leading group held periodic meetings to monitor the project s overall reconstruction plan and provided policy guidance to the PMOs. The borrower, executing agencies, and PMOs fulfilled their obligations during project implementation. A project management system was put in place to ensure the effective use of funds. Domestic funds were mobilized on time, submission of withdrawal applications was timely, and contractors were promptly paid. This validation assesses the performance of the borrower and the executing agencies satisfactory. B. Performance of the Asian Development Bank 25. The PCR rated the performance of ADB during project implementation satisfactory. It indicated that ADB conducted regular loan review missions and provided effective advice to the PMOs on project implementation, monitoring, and procurement matters. Despite the large number of contracts, ADB reviewed and processed procurement documents efficiently. ADB processed the requests of the borrower and the PMOs promptly. Withdrawal applications were processed and disbursed on time. The PMOs expressed satisfaction with the transfer of project administration to the People s Republic of China Resident Mission, which helped in closer and more efficient communication and coordination with ADB. This validation assesses the performance of ADB satisfactory. IV. OVERALL ASSESSMENT, LESSONS, AND RECOMMENDATIONS A. Overall Assessment and Ratings 26. The PCR rated the project successful. It was (i) highly relevant, taking into account that it was conducted in a timely manner, and under close coordination with the government and donors, (ii) effective in achieving the outcome of restoring access to transport and education infrastructure to pre-earthquake levels, (iii) efficient in achieving the outcome and outputs, and is (iv) likely sustainable. This validation holds the same view as the PCR and assesses the project successful. 6 Beginning May 2016, IED adopts the ratings terminology of the April 2016 Guidelines for the Evaluation of Public Sector Operations on development impacts. In this terminology, a satisfactory rating coincides with the significant rating that was used before.

9 7 Overall Ratings Criteria PCR IED Review Reason for Disagreement and/or Comments Relevance Highly relevant Highly relevant Effectiveness in achieving outcome Effective Effective Efficiency in achieving outcome and outputs Efficient Efficient Preliminary assessment of sustainability Likely sustainable Likely sustainable Overall assessment Successful Successful Impact Not rated Satisfactory Borrower and executing agency Satisfactory Satisfactory Performance of ADB Satisfactory Satisfactory Quality of PCR Satisfactory Refer to para. 31. ADB = Asian Development Bank, IED = Independent Evaluation Department, PCR = project completion report. Note: This report uses the ratings terminology of the April 2016 Guidelines for the Evaluation of Public Sector Operations. Source: ADB Independent Evaluation Department B. Lessons 27. The PCR identified two lessons. First, the project engaged external monitors to enable timely response to involuntary resettlement impacts during project construction and ensure compensation and income restoration of affected villages. A framework approach for resettlement safeguard management was adopted and detailed resettlement plans were prepared for all subprojects with adverse impacts during implementation. This approach worked well with minor to moderate resettlement impacts for streamlining loan processing. 28. Second, public participation was solicited effectively with the use of public awareness campaigns on environmental protection and public health and these were well integrated with the operations and maintenance of completed roads and education facilities. This approach facilitated project implementation and can be adopted in future emergency assistance. This validation supports these lessons and has no other lesson to offer. C. Recommendations for Follow-Up 29. The PCR suggested three recommendations. First, the design of emergency project village roads needs to have more detailed implementation arrangements at the county level for project coordination, resettlement, and subproject prioritization to ensure more active participation and involvement of affected communities. Second, due diligence for prioritized road components should ensure that the reconstruction follow the existing right-of-way during project screening to ensure no demolition of structures and avoid land acquisition issues. Third, to facilitate project start-up, the PMOs should ensure closer coordination with donor funding organizations on project scope for the timely approval of domestic and donor requirements, and to ensure synergy and synchronization of construction works, environmental clearances, and resettlement. This validation finds these recommendations appropriate and has no additional recommendation to offer.

10 8 V. OTHER CONSIDERATIONS AND FOLLOW-UP A. Monitoring and Evaluation Design, Implementation, and Utilization 30. The RRP required PMOs to establish a project performance monitoring system (PPMS). The baseline data established for each of the selected indicators was to be incorporated in the project administration memorandum, with additional data collected during implementation. This requirement was covenanted in the project agreements and the PCR stated that the covenant was complied with as shown in Appendix 7. However, the PCR did not assess the PPMS, its design, implementation, or utilization. B. Comments on Project Completion Report Quality 31. This validation notes the following shortcomings of the PCR: (i) the discussion on the education side has been less intensive (para. 19), (ii) it lacked sources and evidence to back up claims under the sustainability discussion, and (iii) no assessment was made on the PPMS. Nonetheless, the PCR generally followed the guidelines and provided sufficient discussion on the ratings. The lessons and recommendations presented were also adequate. On the whole, the quality of the PCR is satisfactory. C. Data Sources for Validation 32. Data sources included the RRP, PCR, and loan review mission reports. C. Recommendation for Independent Evaluation Department Follow-Up 33. The PCR did not make a recommendation for an IED follow-up of the PCR. Given that the project was an emergency assistance that reconstructed or rehabilitated schools and roads and no major issues were brought out in the PCR, in this validation s view, a project performance evaluation report is not necessary.