Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 50142 CHINA Jiangxi I11Highway Project PROJECT PAPER DATA SHEET Country: People s Republic o f China Project Name: Jiangxi I11Highway Project Project ID: PO93906 Task Team Leader: Fei Deng Sector Managermirector: Ede Jorge IjjaszVasquez; Vijay Jagannathan Acting Country Director: Hsiao-Yun Elaine S u n Environmental category: A - Board approved RVP approved -_X -- Does the restructured project require any exceptions to Bank policies? Have these been approved by Bank management? I s approval for any policy exception sought from the Board? xno -Yes - N o - Yes x N o - Yes Public Disclosure Authorized Revised project development obj ective/outcomes [If applicable] There will be no change to the project development objectives and outcome indicators. Does the restructured project trigger any new safeguard policies? I f so, click here to indicate which one(s) [selection box like the one in the new ISR] N o new safeguard policies will be triggered by the restructuring. Revised Financing Plan (US$m.) Source Local Foreign 0.00 Borrower 481.39 IBRD/IDA 33.22 166.78 Others Total 166.78 514.61 Y Total 48 1.39 200.00 681.39
~ Introduction 1. This Project Paper seeks the approval of the Board to introduce the following changes in the China, Jiangxi I11 Highway Project (the Project) (Loan No. 4843-CHA7 Project ID P093906 ), and accompanying amendments to the project s legal documents. The specific changes would include: (i) reduction of the scope for Local Road Improvement Program (LRIP) component and related adjustments in intermediate results and their indicators; and (ii) increase disbursement rate for the LRIP component from 25% to 41%. The amount of the loan allocated to LRIP, US$10 million will remained unchanged due to price escalation and the proposed increase of the disbursement rate from 25% to 41%, which was recommended in order to fully utilize the Bank loan. Background and Reasons for Restructuring 3. Basic Project Information. The World Bank approved an IBRD loan for US$200 million for the Project on June 27, 2006. The Project was declared effective on February 8, 2007. The project development objective is to improve east - west passenger and freight flows in Jiangxi province by investing in the construction of an expressway, enhancing local roads, and strengthening highway management. Project components include (a) component A (about US$627 million): the construction of an expressway section, 117 kilometers long, linking Ruijin to Ganzhou in Southern Jiangxi, a section of the G76 east - west expressway corridor linking Xiamen in Fujian coastal province to Chengdu, the capital of Sichuan province; (b) component B (about US$74 million): upgrading to class 3 or class 4 of six local roads in Ganzhou prefecture, and(c) component C (about US$lO million): institutional strengthening. The loan is expected- to close by December 3 1, 201 0. 4. Project Progress. Based on the latest supervision mission conducted in March 2009, more than 90 YO of construction works of the expressway are completed and its opening to traffic is expected in the fourth quarter of 2009, several months ahead of the initial schedule. Phase I of the LRIP, Chongyi - Fengzhou local road (39 km), is substantially completed. Preparation of the phase I1 program, Chongyi to Longgou section (about 17 kilometers long), is currently ongoing. progress is also being made in the implementation of the Institutional Strengthening component: all three studies are progressing well and are expected to be completed in 2009. As of March 20, 2009, US$175.7 million of the Loan has been disbursed (equivalent to approximately 88 % of the total Loan). The most recent Implementation Status Report (ISR) (March 2009 Supervision Mission) rated the achievement of the Project development objectives (PDO) as satisfactory, and the Project s implementation progress (IP) as satisfactory (with Rui- Gan Expressway being highly satisfactory and LRIP being moderately satisfactory), and considered that all the Project objectives are likely to be achieved by Project completion. The Table below documents the I D0 arid overah IP ratings in the prcvious three ISRs, which indicates that the project has been constantly performing at a reasonably satisfactory level. Detailed ISR ratings are provided in Attachment 1. #5: 02/13/2009 Satisfactor! Reported in the PAD review. 1
#1: 05l23I2008 Xlodsrately Sittlsfactory #3: 10/25/2007 Satisfxtop 5. The main reason for the project restructuring is the change of investment focus of Ganzhou prefecture to act upon the State Government s directive (2006) in implementing a significant Rural Roads Pavement Improvement Program (RRPIP), with a total of 10,000 kilometers rural roads linking almost all villages of this prefecture by 2010 and serving about four million villagers, during the same period as Jiangxi I11 Highway Project. The funding sources of the RRPIP is indicated in the table below, and shows that the local government needs to raise approximately US$ 200 million in five years in order to carry out the W I P program. This has the result of greatly restraining the financial capacityof the local government to implement other projects, including the Jiangxi 111 Highway Project. As a result, Ganzhou Prefecture cannot raise the full amount of the promised counterpart hnds (US$60 million) to implement the LRIP component. Although the RRPIP focuses on roads of lower class than the LRIP, it has similar objective to the LRTP-reducing poverty by improving access to markets and services for poorer areas of Ganzhou City Prefecture. 255.20 264.70 2007 3222 881.88 354.42 23 1.03 296.42 2008 3920.3 1029.57 43 1.23 237.66 360 67 2009 2039 636.17 224.29 224.29 187.59 2010 2850 889.20 313.50 313.50 262 20 14908.5 4273.21 1639.94 1261.69 1371.58 6. Another reason for the changes made under the LRIP program is because four out of the six roads planned to be upgraded over two phases of the Project have been upgraded under separate road improvement plans. These works are of different standards which are lower than the criteria set out under LRIP. Details of the changes are provided in Attachment 2. In summary, one road section was canceled from Phase I of the LRIP, and the originally planned four road sections under phase I1 was reduced to one section. 7. As the size of the LRIP component has been significantly reduced, the Ministry of Finance has requested an increase on the disbursement rate from 25% to 41 % to hlly utilize the US$ 10 million loan allocated for the LRIP component and alleviate the financial stress encountered by Gandiou Prefecture. Proposed Changes 8. Reduction of LRIP Scope. The LRIP component under the Jiangxi I11 project initially included two roads identified for Phase I (Chongyi - Fengzhou road, 48.5 km; and Meicun - Longpu road, 34.8 km), and four roads to be determined for Phase 11. All the roads had to be selected according to their expected positive social impacts, government support, and technical 2
standards, as agreed at the time of negotiation. In reality, four out of the six roads planned to be upgraded under LRIP have been implemented under separate road improvement plans. For example, the Meicun - Longpu road was incorporated into the pavement rehabilitation plan for snow and ice disaster subsidy of the Ministry of Transport in 2008. The remaining roads originally selected for phase 2 were upgraded under the separate RRPIP advanced by Ganzhou Prefecture. Seeking to alleviate financial stress of the local government and support their good efforts in improving lower standard rural roads, it was agreed that the LRIP for the Jiangxi I11 project would include only Congyi-Fengzhou (39 km) and Congyi-Longgou (17 km) roads at an estimated cost of about US$30 million, instead of the US$70 million as originally planned. A detailed summary of progression of the LRIP component is provided in Attachment 2. 9. Increase of LRIP Disbursement Rate. During appraisal, the disbursement rate of the LRIP was set at 25%. On January 8, 2009, the Bank received a letter fiom Mr. Wu Jinkang, Deputy Director-General, International Department, Ministry of Finance (MOF), People's Republic of China requesting an increase in the disbursement percentage for category (l)(b) Civil Works from 25% to 41%. With the increased disbursement rate, the loan amount of US$ 10 million allocated to this component would (i) alleviate financial stress of Ganzhou Prefecture, (ii) accommodate for price escalation on civil works under the project, and (iii) fully utilize the World Bank loan. The increases in disbursement percentages proposed above are made for sound social-economical and financial reasons and the proposals do not impact the development objective or the ability of the Project to achieve said objective. Total loan amount and its allocation will not change. Analysis 10. These changes should not have any major effect on the original economic, financial, technical, institutional or social aspects of the project as appraised. There is no change in the environmental category of the project which is already a category A project. The relevant environmental and social safeguard documents related to this road addition (Congyi-Longgou road, 17km) have been reviewed by the Bank and are currently under revision in order to fully comply with Bank's requirement. There is no exception to Bank policies. 11. The LRIP component under Jiangxi I11 project, after project restructuring, will still include two roads, the Chongyi - Fengzhou road and the Chongyi - Longgou road. Both roads will belong to the main arteries of Chongyi County and benefit rather poor areas-hardly accessible before Jiangxi I11 project-with various activities, tourism spots, factories and mines. Both these roads will become the east - west backbone of Chongyi County and various unclassified paved roads implemented under the parallel RRPIP will connect to it. The Chongyi - Fengzhou road has been implemented. Lessons have been drawn from this experience and the various problems that occurred during construction phase due to a challenging topography. The Bank project provides agood opportunity for local governments to build their capacity in achieving roads that are more environmental friendly, engineering sound and people oriented. This experience will be helpful for other local road projects to be built in Jiangxi. 12. The reduction in the scope of the LRIP will not exert impact on the current implementation of the Project, including achievement of the PDO, as set in the project appraisal phase. Rather, it will lggely relieve the financial constraint that Ganzhou Prefecture Government 3
is facing with regards to the RRPIP. The W I P will provide basic accessibility to four million villagers and immediately reduce poverty, which coincides with the PDO of Jiangxi I11 Project. Expected Outcome 13. The proposed project restructuring does not require any change of the PDO. As aforementioned, both roads under LRIP belong to the main arteries of Chongyi county and benefit rather poor areas that are hardly accessible before Jiangxi I11 project, with various activities, tourism spots, factories and mines. The recently identified road under Phase II- Chongyi to Longgou-links four poor townships totaling 50,000 inhabitants under Chongyi County with the town of Chongyi. This directly contributes to the Project s poverty reduction objective by improving access to markets and services for poorer areas of Ganzhou City Prefecture. 14. Outcome targets of Jiangxi I11 project have to be revised in accordance with the proposed restructuring. Initially, for each of the six roads to be upgraded, the outcome indicators included (a) increased average daily traffic, (b) reduced number of days closed, (c) reduced travel time, and (d) increased daily bus services. The same outcome indicators will be kept after project restructuring, but targets will be limited to only two local roads (see the project changes highlighted in the Results Framework and Monitoring Table, Attachment 3). Benefits and Risks 15. There are no significant risks associated with the proposed Project restructuring. There are no additional safeguard and fiduciary impacts associated with this modification. Counterpart financing for implementing the Chongyi - Longgou road has been secured by a clear commitment of Ganzhou prefecture to implement it. 4
Attachment 1 Detailed ISR and Overall IP Ratings Moderately' Moderatel? Financial Ilsnagement Counterpart Funding Moderately3 Moderately Moderately I'roc iircinrn t Monitoring and Kvaluation Satis actory 1. The Overall IP was rated MS due to lack of commitment for counterpart funding, delay in local roads improvement program, and environmental issues related to EMP compliance. 2. Project management was rated MS due to lack of action plan for the rural road component and little progress made on institutional strengthening component. 3. The Counterpart Funding has been rated MS for the last three ISRs due to lack of counterpart funding to meet the original commitment. 5
Attachment 2 Phase Nameof roads Length Design Reasons of the change (Km> standard Plan after change Status of implementation Chongyi- Fengzhou 48.5 Class3 The first 10 Km is already class 3 road with asphalt pavement, therefore only 39 Km is implemented 39 Km of the road is completed under LRIP and opened to traffic Anyuan- Dingnan Xinfeng- Chijiang Dawen- Dingnan 37.75 Class2 45.2 36.2 Km in Class 3, 9Km in class 4 26.2 Class 3 It was incorporated into the pavement rehabilitation plan for snow and ice disaster subsidy of MOT in 2008 The counterpart domestic funds raising was affected due to the increased investment on the construction of rural road The counterpart domestic funds raising was affected due to the increased investment on the construction of rural road Major repair works for class 2 highway To pave the existing 19Km sandy road To pave the existing 5Km sandy road The construction of 19.33 Km cement concrete pavement started in 2008, the rest 18.42 Km of asphalt pavement is in good condition. 26.2Km has been improved to class 3 road with asphalt pavement, the rest 19Km sandy road was proposed to be paved under the State subsidy program in 2008 and planned to be completed in 2010 21.2 Km has been improved to class 3 road with asphalt pavement, the rest 5Km sandy road was proposed to be paved under the State subsidy program in 2008 and planned to be completed in 2010 6
Revised Annex 3: Results Framework and Monitoring Attachment 3 PROJECT DEVELOPMENT OBJECTIVE Improve east-west passenger and freight flows in Jiangxi province by investing in the construction of an expressway, enhancing local roads, and strengthening highway management CHINA: Third Jiangxi Highway Project Results Framework OUTCOME INDICATORS USE OF RESULTS INFORMATION [A] Supporting trade-led growth in Jiangxi province through improved highway access to prosperous eastern region and export outlets [B] Reducing poverty by improving access to markets and services for poorer areas of Ganzhou City Prefecture [C] Improving highway sector management in Jiangxi province INTERMEDIATE RESULTS [A] Approximately 117 km of the Ruijin- Ganzhou Expressway (RGE) [B] Local roads in the direct areas of influence of the project in Ganzhou City Prefecture [C] Staff of JPCD and related agencies with improved technical and management capacity in the road sector. [A] In the Ganzhou-Ruijin Corridor: A. 1 Increased average daily traffic A.2 Decreased accidents on the existing road G323 A.3 Decreased travel time [B] On the road sections of the Local Roads Improvement Program: B 1. Increased average daily traffic B.2 Reduced number of days closed B.3 Reduced travel time B.4 Increased daily bus service [C] Implementation of key recommendations from the institutional strengthening components RESULTS INDICATORS [A] Completion of 117 km of the Ruijin-Ganzhou Expressway [B] Successful improvement of two local roads in the Ganzhou City Prefecture totaling about 56 km3 [C] Successful completion of the institutional strengthening studies and staff trained [A] The development plans of the local governments are integrated with the national and provincial transportation links and the highway access to Xiamen in Fujian [B] The selection of the local road sections maximizes the benefits for the low-income population in the Ganzhou City Prefecture [C] The policy-related studies, training and technical assistance are relevant and have an overall positive impact. USE OF OUTCOME MONITORING Monitoring of implementation progress and action plan to address possible delays Originally there were six local roads (see Reduction of LRlP Scope for more information 83.3 km plus Phase I1 () planned for during Appraisal 7
Outcome Indicators [A] Ruijin-Ganzhou Expressway Original Baseline 2005 Original ' Targets for 2010 Revised Targets for 2010 Achievements to Date RGE works are more than 90% completed. Average daily traffic in the Ganzhou and Ruijin corridor 0 RGE AADT (PCU/day) o Ruijin-Huichang o Huichang-Yudu o Yudu-Ganxian o Ganxian-Zhanggong 0 G323 AADT (PCU/day) o Ruijin-Huichang o Huichang-Yudu o Yudu-Ganxian o Ganxian-Zhanggong 7,321 11,011 10,137 12,164 14,000 15,000 16,000 17,000 4,000 6,000 6,000 8,000 The corridor is not yet open to traffic. G323 Average accident (fatal) rate [AccidentsAOO x IO6 veh-km (fatal/ x lo6 veh-km)] o Ruijin o o o o Huichang Yudu Ganxian Zhanggong District 23.87 (2.01) 34.80 (0) 14.89 (1.49) 19.50 (2.05) 24.93 (1.25) 15 (0.83) 18 (1.11) 11 (0.87) 13 (1.07) 5 (0.52) Average travel time Ruijin- Ganzhou (minutes) 150 75 8
[B] Local Road Improvement Program I 0 Average daily traffic (PCU/day) o Chongyi -Fengzhou o Meicun-Longbu o Phase 11-Road 3 o Phase 11-Road 4 o Phase 11-Road 5 o Phase 11-Road 6 o Chongyi - Longgou 0 Number of days closed per year o Chongyi -Fengzhou o Meicun-Longbu o Phase 11-Road 3 o Phase 11-Road 4 o Phase 11-Road 5 o Phase 11-Road 6 o Chongyi - Longgou 1,299 664 88 76 1,800 1,000 10 6 Upgrading of Chongyi -Fengzhou road is completed and open to traffic. Chongyi -Longgou road is currently under preparation and civil works have not yet commenced. 0 Average travel time (minutes per section) o Chongyi -Fengzhou o Meicun-Longbu o Phase 11-Road 3 o Phase 11-Road 4 o Phase 11-Road 5 o Phase 11-Road 6 o Chongyi - Longgou 180 210 60 50 0 Daily Bus Service (busedday) o Chongyi -Fengzhou o Meicun-Longbu o Phase 11-Road 3 o Phase 11-Road 4 o Phase 11-Road 5 o Phase 11-Road 6 o Chongyi - Longgou 18 0 40 25 9
[C] Institutional Strengthening Implementation of key recommendations from the institutional strengthening components JPCD adopts systematic tunnel safety management plan and ensures resources for emergencies in place. JPTD4 has completed draft report on the study and is currently being reviewed by an international tunnel expert. Policies recommended by this study is to be adopted. Reduced accident rate in the expressway network in Jiangxi Province o # of accidentdl 00 x 1 O6 vehkm o # of fatalitiedl 00 x 1 O6 vehkm Electronic toll collection strategy implemented by JPCD 7.61 0.37 6.15 0.24 JPTD has completed draft report on the study of expressway roadside safety and is currently being reviewed by an international road expert. Policies recommended by this study is to be adopted. Following a new policy defined by MOT, JPTD is implementing electronic toll collection on the main toll gates of its expressway network. From March 2009, Provincial Communication Departments have been renamed Provincial Transportation Departments. The JPCD is now known as JPTD. 10