/"~~~ s:" / 4 fA

Document of The World Bank Public Disclosure Authorized

ReportNo. 12833-4A

STAFF APPRAISAL REPORT Public Disclosure Authorized

CHINA

XINJLANGHIGHAY PROJECT

Public Disclosure Authorized JULY 8, 1994

Public Disclosure Authorized Trinsport Operations Division Country Department II East Asia and Pacific Regional Office ClURRENCY EQUIVALENTS (As of January 1994)

Currency Unit = Yuan (Y) $1.00 = Y 8.70 Y 1.00 =$ 0.115

FISCAL YEAR

January 1 - December 31

WEIGHTS AND MEASURES

1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square meter (i 2) = 10.76 square feet (ft) 1 square kilometer () = 0.4 square miles (mi2) 1 hectare (ha) = 0.01 (ki 2) = 2.47 acres (ac) = 15 mu 1 mu = 666.7 m = 0.0667 ha 1 kllogram (kg) = 2.2046 pounds (bs) 1 metric ton (m ton) = 2,204 pounds (Ibs) ACRONYMS AND ABBREVIATIONS

SFYP Eighth Five-Year Plan CDISCO CommunicationsImport and Export Service Corporation CRISPP Reform, InstitutionalSupport and PreinvestmentProject E&M Electical and Mechanical EA EnvironmentalAssessment EAP EnvironmentalAction Plan EIRR Economicltenal Rate of Return GNP Gross National Product OVAIO Gross Value of Agrcultural and Industrial Output HCHAB High-GradeHIighway Administration Bureau IIPDI HighwayPlanning and Design Institute HSRI HighwayScientific Research Institute ICB Iterational CompetitiveBidding 1ST Joint supervisionteam MOC Ministry of Communications MOF Mistry of Finance mvpd motor vehicles per day NTHS National Trunk HighwaySystem PEO Project ExecutionOffice PMS PavementManagement System PSB Public Security Bureau PSO Project SupervisionOffice PSTP Public Security's Traffic Police (GeneralTeams) RAP R¢settlementAction Plan RDB Road Data Bank RMF Road MaintenanceFee ROW Right-of-way SOE Statementsof Expenditure SPC State PlanningCommission TCU TechnicalCoordinating Unit TUDH -Urumqi-DahuangShanHighway UKH UrJmqi-KuytunHighway XAR XinjiangUygur AutonomousRegion XCD CommunicatiorisDepatment XCS Xinjiang CommunicationsSchool XCTWS Xinjiang CommunicationsTechnical Workers School XHAB Xinjiang HighwayAdministation Bureau XHGHCA Xinjiang High-GradeHighway Construction Authority XHPSDI XinjiangHighway Planming,Survey and Design Instute -i-

CEINA

XNJIANG HIGHWAY PROJECT

LoAN ANDPROJECT SUmmARY

Borrower. People'sRepublic of China Beneficiaries: xinjiangUygur Autonomous Region Amount $150 millionequivalent Terns: 20 years, including5 years of grace, at the Bank's sandard variableintrest rate ProjectObjectives: The project has been designed to (a) support continued developmentof road infrastructureto fadilitatemobility and increasethe efficiencyand safetyof road transportin the interest of stimulatingeconomic activity; (b) promotethe developmentof the Region's highway agencies for transport planning and investment prioritization, construction and maintenance; (c) improvethe efficiency of roadpassenger trasport sevis; and (d) improvehighway maintenance opmatins. project Desrption: The prqject comprises(a) tfie constructionof the 283.3 km Turpan-Urunqi-DahuangshanHighway (TUDH) of which about 101.3km are four-laneaess controlledand about 182.0km are high standard(two-lane); (b) improvementof 16 km of linking roads that interconnectwith and feed trafficto TUDH at major intersections/interchanges;(c) an institutional strengthenig componentwhich wiU provide training and equipmentfor seven key agencies of Xnjiang's Commicas Departent; (d) upgradingof the Region'shighway maince cpabilit; (e) road safety measures;and (f) a study of intercityand rura passengertransport. Project Beefts: The main quantifiablebenefits associatedwith the highway componentsinclude savings in vehicleopeting costs, reduced traveldistances and traveltimes, and savingsthmugh a reduction of traffic accidents. Other benefitswould stem from reduced congestionon the existingroads, includingbetter conditionsfor bicyclesand agriculturaltAffic, and acceleratedindustrial and agricultural growth based on improved ansport fcilities. Additionalexpected but unquantifiedbenefits would result from reduceddiupton to trafficservice caused by snowand flooding; less cargodamage and added convenienceto passengers. Other benefitsexpected from the institutional strengtheing would include morecost-effective use of investmentfunds, higher quality control of rad constructionand more efficientmaintenmce of roads. Risks: The mostimportant risk facingthe projectis a possibledelay in the implementationof the 22.4-kmconnection within the city of Urumqi. The provincialgoverment has givenits assuranceand commitmentto timelyimplementation of this connection.Based on expeiencewith ongoing highway projects, other rsks centeron (a) implementatondelay and constructionquality, and (b) timely and successfulimplementation of trining and technicalassistance. The prepartion of the projecthas benefitedsubstantially from the Bank'sprevious experience with similar highway projects in China, as well as from the active involvementof the Ministry of Communicationsand foreign experts in projectprepaton andthe preparationof bidding documents. Packagingof the TUDH contractsto attractlarge, experiencedcontractors and the careful formulationof constructionsupervision arrangements are exptd to be stfficient safeguardsto minimizedelays. To reduce the technicalassistance risks, a detailedimplementation progran for tte first two yearsof thesecomponents has beenformulated and a full-timecoordinator and two assistantshave been designatedby the ProjectExecution Offine (PEO). EstimatedCosts: Local Foreign Total - ($ million) -

Worlm TUDHand Liningroads 90.9 97.2 188.1 RozdSafety-Pilot Program 0.3 0.4 0.7 Subtotal 2L 297.6 188 Supervisionof construction 4.2 4.1. 8.3 Equipment 4.8 11.1 15.9 Training 0.6 2.6 3.2 Studies 0.7 0.4 1.1 BaseCost La IQ. 115.8 217.3 Physicalcontingencies Lh 9.5 10.2 19.7 Price contingencies 55.4 13.2 68.6 Subtotal 64.9 2A BL Landacquisition and resetdement 11.9 - 11.9

TotalProect Cost 17. 139. 317. FImdncngPMain

Mnjiang RegionalGovemment 126.1 - 126.1 CentralGovernment 41.4 - 41.4 IBRD 10.8 139.2 150.0

Total Financing 12L. 192I 317.5

EsthmatedDisbursement:

Bank Group FY 19S 1226 1297 122g 122 2Q ($ million) Annual 24 24 34 38 25 5 Cumulative 24 48 82 120 145 150

Povety Category: Not applicable.

Economic Rate of Return: 18 percent

La dentifiableta and dutiesof aboutY 47 million($5.4 million)are not shownin the projectcosts and wouldnot be financedfrom thepeeds of the loan. Ten percentof worksand supervision. - iv -

CONTENTS

1 Tmasport Bottlenecks and Rdorms ...... 1 A. Baclground ...... 1 B. T1rafic...... 1 C. TransportReforms ...... * . 2 D. BankGroup Participaon ...... 3 E. TheHlighwaySusector ...... 4

2 XbiuagUygur Autonomos RegionTransportSector ...... 11

A. Sitation and Economy ...... 11 B. Transport Network ...... 13 C. TrafficCharactedisticsandGrowth ...... 14 D. TheVehic1leFleet ...... 15 E. Intercity and Ru aPassenger Transport ...... 15 F. The Truckng Industry ...... 16 G. EighwaySafety ...... 17 H. Highway Adm ttion ...... 17 L. lanning,Budgetng and Pinancing ...... 18 J. Engineering,Constction and Maintenae ...... 20 K. Taining ...... 21 L. HighwayDevelopment ...... * ...... 21 3 TheProJect ...... 23

A. Project FormuLationand Preparation ...... 23 B. Project Objectivesand Rationale for Bank Involvement ...... 23 C. P1roectScope ...... 24

This report is based on the findings of a November 1993 arais mission comnpsg Hatim Ha (rransport Specilst, Task Manager), Yasuhiro Kawabata (Consuln, Engineeing), Claude Salem (InstutionalTraining Specialist) and Katunori Suzwid (Environment),Ruwayne Jaywerdene (Consultant, Resettlement), Ole Sylte (Consultant, Highway Maintenance)and Richard Muskaug (Consultant, Highway Safety). Mr. Alf Jerve (Resettlement)and HenningLauridsen (Consultant, Passenger Transport) contributed to the pieparation of the project. Peer reviewers for the prqject were Jacques Yenny (Trnsport Economist),Paul Cadario(Economist) and WilliamPatson (neer). MTe Divion Chief is Richard Scurfieldand the Departnent Director is NWholasC. Hope. v -

3 lm Projec (cont'd)

D. Enviroiental Assement ...... 37 B. LandAcquisitionand Resetdement ...... 38 F. Cost stimates...... 39 G. Finacing ...... 40 H. Im atio...... 41 L Prourement ...... 44 J. Diburnets ...... 47 K. Auditing ...... 48 L. PojectSupervidon,Reporting andMo nitoring ...... 48

4 EconomicEvaluation ...... 49

A. Bmefits andB fia ...... 49 B. THia-Urmq-DahuagshnHlghway ...... 50 C. rojectRis ...... 56

AgreementsReached andendaon ...... 57

TAXES

1.1 Road Accident Risk in Various Countries,1991 ...... 59

2.1 Xnjiang: FreightandPassengerTraffic, 1980-92 ...... 60 2.2 XICiang:Road Network, 1992 ...... 61 2.3 Xijiang: Length of Highway by Tffic Mx and by ADT, National and ProvincialRoadsOnly ...... 62 2.4 XMjiang:Vehice Fleet,1985-92 ...... 63 2.5 Xagjiang Iterity eand Ruray Buds Flet, 12 ...... t...... 6. 4 2.6 Xijiang: Freight Handledby Public and Private Trucls, 1985-92 ... 65 2.7 ICinjiang:RoadAccients (1985-92) ...... 66 2.8 Xinjiang:Hlighway Revenues and Expenditures...... 67 2.9 Xmjiang: Fuel Prices...... 68 2.10a PlannedHighway Developmentin 8FYP (1991-95) ...... 69 2.10bP nnedHighwayDavopment l ...... in 9FYP (1996-2000) 70

3.1 Te Upgadingand New ConstructionProgram for .nlngRoads along ITUDH ...... 71 3.2 PrqeaCost Summary ...... 72 3.3 EsimatedDisbursement Schedule ...... 73 - vi -

TAS (cont'd)

4. la RecentTraffic Growth on the ExistingTUDH- TuEan-Ureqi trn) Section ...... 74 4.lb RecentTraffic Grwth on the ExdstingTUDH - Urumqi-Dahuangshan(Northem)Secdon ...... 75 4.2a PzojectedDily TrafficVolumes for SelectedYears by Sectionon Proposedand Existng TUDH- Cae of: MediumTaffic rowth andTols ...... 76 4.2b ProjectedDaily Traffic Volumesfor SelectedYears by Section on Proposedand EidstingTUDH - Case of: MediumTraffic Growth andNoTolls ...... 77 4.3a ProjectedDaily Traffic Volumesfor SelectedYears by Section on Proposed and ExistingTUDH - Case of: Low Traffic Growth and Tols ...... 78 4.3b ProjectedDaily Traffic Volumes for SelectedYears by Section on Prposed and xisting TUDR - Case of: Low Traffic Growth adNoTol ...... * 79 4.4 TypicalEconomic Vehicle OperatingCosts on Existingand Propose4 TUDH ...... 8s 4.5a Summaryof Internal EconomicRates of Return and Sensitivity Analysesby Section of TUDH - Case of: Medium Traffic Growth andTols ...... 81 4.Sb Summaryof Internal EconomicRates of Return and Sensitivity Analysesby Section of TUDH - Case of: MediumTraffic Grow.th andNoTos ...... 82 4.6a Summaryof Internd EconomicRates of Retun and Sensitivity Andysesby Sectionof TUDH- Cae of: Low TrafficGrowth andTolls ...... 83 4.6b Summaryof InternadEconomic Rates of Retunand Sensitivity Analysesby Sectionof TUDH- Caseof: Low TnrfficGrowth andNoTolls ...... 84

CHAIM

1. Xljiang Communications Department(XC) ...... * .... 85 2. XlnjiangEighway Adminaion Bureau (xHAB) ...... 86 3. Project Executo Office(PEO) ...... g.... . 87 4. XinjingIlghwayPlnning,Survey andDesignlnstitute(PDDI ) ...... 88 S. XlnjiangTaffcSciencelnsdttte X SI) ...... 89 6. XljiangCmmncaosSchool(XCS) ...... 90 7. Ogniz Stture of ;anjiangCommuniations Tecbnical WroInSdScool (XCrVWS)...... 91 -vii -

ANNIEx

1. InsttutionalStrenghening ...... 92 2. Terms of Reference for the Xinjiang HighwayNet.. ,rk MaintenanceStudy . . 1w3 3. Road SafetyIniprovement ...... 103 4. Terms of Reference for the XinjiangIntercity and Rural Passenger Tanort Study ...... 112 S. EnvironmentalAssessment and Action Plan Summary ...... 115 6. ResettdementAction Plan ...... 132 7. InplementationSchedule ...... 140 8. SupevisionMission Schedule ...... 144 ti 9. DocumentsAvailable in the Project File ...... 146

FIGuREIN TEXT

2.1 Highway Reverues and Expendituresin Xinjiang in 1992 ...... 19

MANS

1. IBRD No. 25200 Turpan-Urumqi-DahuangshanHighway (TUDH) 2. IBRD No. 25201 Major Highway DevelopmeptProgram National Trunk Highway 3. IBRD No. 25203 XinjiangTransport System 1. TRANSPORTBOTTLENECKS AND REFORMS11

A. BACKGROUND

1.1 The transportsystem in Chinahas grownconsiderably over the last four decades. Between1952 and 1992,the length of the highwaysystem increaws ty a factor of nine and the length of the railway network more than doubled. Despite ts development,the transportnetwork is one of the sparsestin the worldcompared with the area and populationit serves. The mainreason for this is China'slow levelof tansport investment,which averagedonly 1.3 percentof gross nationi product (GNP)during 1981-91,as comparedwith 2-3 percentfor othe: countriessuch as India,the Republicof Koreaand Brazil. The trsport systemis alsocharacized bv high intensityof freight tfc. To produceone dola of economicoutput, China handles 50 percentmore ton- klomete (tun-hn)of trafficthan India and Brazil due to a relativelylarge heavy-industry sector, relianceon coal as the majorsource of energyand a large volumeof otherbulk pWducts.These factors have resulted in a gapbetweer transport supply and demandthat is manifestedby the existenceof tanport bottlenecks,the aminirve aioning of lihoiedtasport capacity,the poor qualityof servicesand lossesto the economy. 1.2 The economicsystem in Chinais undergoinga major tanition towarda marketorietain and this transitionwill involvemany reforms in the tansport sector designedto increaseefficiency and improve its responseto marketforces. Ihese reforms, whichstared in 1979,are nowaccelerating due to newgovernment policies announced in 1992and 1993by the 14thParty Congress.

B. TAWMC

1.3 Since1979, China has experiencedrapid growthof traffic, cosstent with fast exanion of theeconomy, which averaged about 9.5 percenta year during1980W90. This growthtrend tapered off as the supplyconstraints became more conspicuous and the growthof theeconomy slowed down in 1989/90.However, resumption of higheconomic growthsince 1991has broughtabout a correspondingsurge in transportdemand.

1.4 TamfficGrowth. Despitethe capacity onstraintsand relatedbottenecks, during 1982-12total freighttraffic grew at 8.1 percentper annumand total intercity passengertaffic at 9.7 percentper annum. Highwayfreight traffic grew at the highest annualrate of 14.7percent, comparcd with 6.6 pent for railwaytaffic and 9.5 percent

11 Thisciaptr is an abatet of the Banksector report (No. 11819-CHA)ChnaliighwayDewlopnm andMwat 1, OpdoOpsand Sme*sqi, February1994. - 2 - for coastaland inland waterway traffic. Despiteits rapidgrowth, mtercity passenger travel per capitain Chinaremains very low, at abouttwo thirdsof the levelfor India. This is dueprimarily to the swverecapacty corstraints.Civil aviation traffic, which grew at about 21 percent per annum during 1982-92,is still very liited, and most long-distance journeysare madeby rail. 1.5 TransportDemand and ModalSplit Trends. Althoughthe railway's share of traffic has declinedover the la.l decadeas the share of road tffic has grown, rail trno still dominats freightand passengertraffic in China. In 1992,57.3 percentof freightand 45.5 percentof passengertraffic were moved by mail,and the rest was moved by road,inland waterway, coastl shipping,pipeline, and civilaviation. This preeminence of the railwayis due in partto the past dependenceofthe Chineseeconomy on heavy industryand in part to the relativelylong transportdistances. In the case of passenger transport,dominance of the railwayis due to the poor qualityand inadequatecapacity of the road systemand intercitybus services,the virtual absence of privateautomobiles, and the limiteduse of civil aviation. The movementtoward a marketeconomy will increase demandfor market-responsivetansport services,favoring a shiftto roadtransport but stil leavinga growingmarket for the relativelylow-cost rail transportsystem.

C. TRANSPORTREFORMS 1.6 In the past decade, China's economicreforms have aimed to increase economicefficiency through meazures designed to reducenational government intervention in the productionand distributonprocess, reduce the Government'sdeficits and subsidies to steowned enterprises,and open the economy by expandingtrade and allowing fuirther partcipationof privateand colectdveenterprises. In the transportsector, several reforms havebeen undertaken in line with theseobjectives-many with Bankassistance. Notably, the Govemmenthas: (a) reducedthe extent of commodityprice distortionsby (i) decreasingthe volumesof commoditiesproduced in the StatePlan, and (ii) raisingthe in- plan pricesof commoditiescloser to marketlevels; lb) increased the tariffs charged by state transport entpises, including railway, highwayand waterway, tr, levels approachingtheir long-run marginalcosts; (c) encouragedpoicial governmentsto developmany local railways, which now total some4,400 route-Lnand interconnect with the nationalstandard gaugenetwork; (d) allowedprivate individualsand collectiveand townshipenterprises to provide passengerand freight tmnsport serices on roads and inland waterways,and encouragedprovincial and nationalauthorities to develop tansport systemswith pnvate sectorfinancing; -3 -

(e) carriedout majorstructural reforms in the orgnizationand management of civil aviationand in the ports,leading to increasedfimancial autonomy and accountability,and to lesscentral government controls thus paving the way for introductionof competitiveservices; (f) reduceaoperating and capitalsubsidies for major infstructure seices, throughhigher cost-recovery and increasedreliance on user-fundedcapital construction;and (g) encouragedthe introductionof more moderntechnology in the trsport systemprimarily by improvingrolling stock technologyin the railways; enhancingcontainer and bulk handling capacity in theports; improving road pavementdesign and geometricstandards for the expansionof moo on in the highwaysubsector; and increasingthe use of computerzeddata processingand planningtechniques in operadonsin all modes.

D. BAK GROUPPAMnC]PATION

1.7 The BankGroup has supported initiatives by the Governmentin thetWansport ector throughloans and credits totaling$4.0 billion for 26 projects. The dialogue betweenthe Governmentand the BankGroup on transportsector operations and strategy has beenstrengthened tbrough long-term strategy studies for railways,highways and ports development,and through project preparation activities and project-financed studies as well as sectorstudies canied out in collaborationwith Chinese authorities. The variousstudies have, inter alia, emphasizedthe arers of multimodaltransport investment and the setting of sectoralpriorities based on systemwideeconomic evaluation techniques.2I A Bank Gru reporttitled COna'sRaiway Sraegy (No. 10592-CHA)was isued in February 1993 and a report titled -0lghwayDevelopment and Manageme Lses, Opdons and Strategies(No. 11819-CHA)in Febmary1994. In addition,there are ongoingstudies on the trucling industryand highwayfinancing, a studyof the provincialroad construction industrywould be undertakenunder the Fujian Highway Project, a studyof interprovincial trafficfacilitation and a highwaycapacity study would be undertakenunder the National HighwayProject (Hebd/lean), and a studyof intercitypassenger trasport is being includedin the proposedproject Furthermore,the Ministryof Conmmications(MOC) and the Bank have hunched an institutional-strengtheningcomponnt f: MOC in the ChinaReform, lIntitutional Support and Preinvestment Project (Credit 2447-CHA, FY92). The BankGroup also conducted a surveyof the nationalwater transport system in the mid- 1980s,which has reaffirmedthe needto furtherexploit the large potentalof the Chinese waterways. As a fotlow-upto the study, the preparationof a multipurposeinland waterwayproject was initiatedrecentdy.

VI Sixof Xt sudis haveexloared multimodal pricing and investment iwsws in a more ye ad moe miaUy oriented analycal ramework than was fotmedy avilable to aina's decida Sidcom-heoangdmg CompehensiveTranwort PIamius Stdy (OCTPS);to Yan Eomic Zon Tanpot Suy (YZIS); he CoalTrst Study(CTS); dte Railway Invem Study (W); to Soutes Cosa Region Stategic Issue in Port and Shiaug Develope Study (SIPS; and t Pric Reform Sdy. -4 -

1.8 On the bads of the above-mentionedsector work, the Bankwill depen its involvementand expectsto assistthe Governmentin the designand implementationof institutionaland sectoral reforms in other areas, including management gy formulation,investment planning, priing and financing,deregulation of services, ional management,and tnser of advancedtransport-related technology tough trining and provisionof up-to-dateequipment. Chinese authorities and the BankGroup are ently prepaing a comprehensivetransport sector strategy paper that is expectedto help guidesector development in a consistent,cohesive policy framevwork. 1.9 Theabove-mentioned projects and studies are helping to spurthe growth and modenizationof the transportsystem. However,much more needsto be doneto bring aboutthe changesrequired to dealeffectively with the emergingissues. To alleviatethe tansport bottlenecksand rationalizethe transport system, the Govemnment will need to take the followingmeasures by the year 2000: (a) increasethe total level of transportinvestment in relationto GNP,to expand capacityto meet the new traffic demandsand to clear up the backlogs causedby past underinvestment;

b) aim for balancedinvestments among the majorfreight trsport modesof rilways, highways,and waterwaysin termsof optimaleconomic cost of tasport;

(c) realignfurther the prices of freighttransport sevices andthose of the major commodities,especially coal, to bnng them closerto their real costs; (d) increa further the productivityof existing transport assets through technologicalmodeon and managementreforms; and (e) improveand epand tho multimoda transportsystem, both acms and withinmodes, with particular emphasis on moreextensive use of containers

E. T HIGHWAYSUBSECIOR

The NationalHighway Network and Its Utilization

1.10 The highwaynewrk totaledabout 1,057,000km in 1992but, relativeto eithberpopulation or geographicarea, rankedamong the sparsestin the world. About 30 percent of China's villageshave no access to roads adequatefor motor vehicls. rvestmtin the highwaysubsector has been rathe&modest, at 21 percent of tota investmet in the transportsector during the SeventhFive-Year Plan (1986-90).Since the eamly1980s, the highwaysystem has carriedan increasZngshare of traffic. The network is, for the purposes of deign and technicalspecifications, classfied by MOC as Expresway (access-controlledhighways with dividedcaniageways for the exclusiveuse of motorvehicles), and Clsss, 1I, 1 and IV for varioustraffic apddes in different - - teain. For administradvepurposes, roads are classifiedas national,provincial, county, village,and specialpurpose.

1.11 China's road network consistsmainly of ang roads with neither dt capacitynor strengthto carrycurrt andprojected future taffic. Manyof the roadsneed upgradingin additionto normalmaintenance and rehabilitation.A Bankpolicy study on road deteiorationin developingcountries classified China among the counties with an extsive andobsolete road networkin needof modernizationto meetthe rapid growthin road transportdemand. Although China has not neglectedroad maintenance,its outmoded maintenancetechnology would not be sufficientto arrestthe aclerated deteriorationof the agingroad systemnetwork. Chinaneeds to mobilizedomestic and external resources fcr modeniing its road systemwith specialemphasis placed on technologytransfer, instutional improvement,and developmentof skills. Thereare few absorpdvecapacity constraintsrelative to achievingthese objectivesgiven China's decentalized, stable, and financiallyaccountable highway administraton structure. 1.12 The rapidgrowth of highwaytfic stemsnot only fromthe country's rapid economicgrowth but also fromother factorssuch as the nationalpolicy of shiflingshort- had tansport from rail to road as well as the expansionof the servicesector and rurl industries. Furthermore,with the increasein foreigntrade, growth in tasport demand will be concentratedin transportcorridors serving the mainports and their hinterlands and, with the containerizationof the highervalue commodities,most domestic movements of this foreigntrade are expectedto go by road. The neweconomic activities have generated trafficin excessof whatmany of the existng facilitiescan accommodate.Congestion on roads resultingfrom the mix of slow-movingnonmotorized and motoized traffic is a seriousproblem. 1.13 The vehickfleet in 1992totaled some 6.9 milliontrucls, busesand cars, mainlygasoline powered with truckscomprising about 67 percent. Most trucks are of four-toncapacity with outmodeddesigns and low fuel efficiency. Thesevehicles were manufactureddomestically and, until recently, the productionof trucks was barely suffidentto replacethe retiredvehicles, let alonemeet growing demand. It was not until the early 1980sthat large numbersof modernvehicles were importedand joint ventures with foreign manuf s began startedto manufacturetrucks and passengercars. Productionhas grownsteadily, reaching 714,000 units in 1991,of which410,000 were trucks,180,000 cars, and 124,000were chassis, finished mostly as buses. Thisproducdon is contributingto the creationof a modem fleet, although the older vehicles still predominate.

1.14 The tractor and motorcyclefleets, at 5.4 millionand 6.5 million, well exceedthe sizeof the truckand bus fleet. Bothtractors and motorcyclesoffer a relatively cheapand basicform of transport,but add seriouslyto trafficcongesdon and are among the majorcauses of road accidents. 1.15 Growthin the truckand bus fleethas beenfairly steady at an averageannual rate of 12.3 percentover the last 12 years, with particularlystrong growth in small passengervehicles. Growthin the taor and motorcyclefleets has increasedsharply, with motorcyclesshowing the strongestgrowth of all vehicletypes.

1.16 The micldng industiy consistsof publicly ownedtrucks operatedby trucking companiesaffiliated with local (provincial or district)highway authoriies, and other trucd opet by fctories, cooperativeoranizations and, recently,private individuals. The relaaon of trucldngregulations in tie early 1980sallowed own-account trucks to haul cargofor otherfaories and coopertves and thus promotedcompetition between public and own-accounttrucks. In fact, nonpublictrucks have absorbed most of the growthin trafficover the past few years. However,trucking costs are extremelyhigh, stemmingin part fromtechnological factors (poor roads, outnoded trucks, relatively low ulization of carying capacity,etc.) and from a lack of experiencein fleet management,which is essentialto the developmentof modernand efficienttrucldng services. While market forcesare expectedto playa moreimportant role in shapingthe industryin the future,it is necessaryto understandthe currentconstraints to such developmentand to identifythe measuresneeded to allowthe reshapingof the industryto takeplace. In order to explore ese issuesmore fully, a ProvincialTrucldng Study was includedas a componentof the HenanProvncial Highway Project, and a separatestudy of theHighway Trucking Industry was part of the formalsector progam for FY93. 1.17 Road safetyis an imporait issue in China's transportsystem. A study completedin 1987under the First HighwayProject found the accident mWtto be 100 deathsper 10,000vehicles, one of the highestin the world CTable1.1),3J and cosftg the Chineseeconomy close to $1 billion,amnually. The studyalso identifiedessential measuresneeded, including improved police accident reportng; introduction of comput- based accidentanalysis; identificationof accidentcauses and dangerousroad spots; prpation of guidelinesfor road safety design; improvedadministrative procedures; improvedmanpower tining; and prepation of a road safety action plan. The responsibilityfor highwaysafety matters was transferredfrom MOC and the provincial CommunicationsDepartments to the Ministryof PublicSecurity and its provincialunits in 1988. This decisionhas createdtransitional administrative problems. These have been overcomein someprovinces through good coopion betweenthe provincialhighway administion bureausand the concemedpublic securityunits. Moreover,th public securityand highway bureau personnel often work togetherto identifyand improveroad configurationsat high-frequencyaccident locations. There bas beenalso impoveme in the accidentrepordng system,as advocatedin the 1987 study. In most provinces, computerizedrecord systemsare in place.

HighwayAdmiton, Planningand Finance 1.18 Adminision of the ighw networkis theresponsibility of the provincial govemments,through the Highways Bureaus of the Provincial Communications Departments(PCDs). Arrangementsfor administrion varyamong provinces; in the more

Vl Tabl ae pilacedat the and of repor - 7 - decentralizeones, the county and municipal governments perfonn some administive and all of theoprational functionsrelating to the highwaynetwork. The central government's MOCprovides genera policyguidance and supportto the PCDs throughits nationwide policiesand regulatons, specfying design and construction standards. MOC also provides speialized manpowerfor planningand design, and alsoconstruction equipment for major provincialcivil works, if needed.However, the PCDs are financiallyindependent of MOC and carry out all road planning,construction, maintenance, and operationof roadsand waterwaysin the provinces. MOCis moreheavily involved in certainlarge projectsthat are cusidered of nationalimportance, for whichMOC shares part of the financialburden. 1.19 Whle the provincesmanage the country's highwaynetwork, MOC is responsible for pknning and investmentstrategies for the development of the National Highwy System. A reclassificationof the country'sroad networkin 1981led to the deignationof key interrovinciallinls as NationalHighways. More recently,MOC has been evolvinga long-termstratgy for the systematicupgrading of the nationalsystem in :ey corridorsover a 30-yearplanning horizon. Knownas the NationalTrunk Highway System(NTHS), the system,comprising 12 majorroads i r the exclusiveuse of motor vehicles(Map IBFD 24225)would connectall the provincialcaptals and cities with ppulations exceeding500,000. This systemis giventhe highestpriority. Construction of 25,000km of high standard,access-ontrolled roads is expectedto be completedby 2025. Priorityfor early constructionis beinggiven to thoseroutes already identified as congeted and hindeing economicactivity. By the end of 1991, some500 km of the systemhad been built, and a totalof 4,000km is envisagedto be completedby the endof the EighthFive-Year Plan (8FYP)in 1995. The provincialgovernments are responsible for route location,engineering design, construction, operation and maintenanceof the nationalhighway system. At the provinciallevel, in additionto copingwith the routine maintenanceof the networks,priority has been givento the expansionand improvement of the provincial,county and rural road networks,to providefor greater mobilityand to stimulatesocioeconomic activity, particularly in the country'sless developedregions.

1.20 A system for funding highwayconstrucion and maintenance is well establishedalthough there are differencesbetween provinces according to localneeds and circumstances.The mainrevenues are generatedby the RoadMaintenance Fee (RMF), typicallylevied on the revenueof freightand passenger port companiesand on the cacity of own-accountvehicles. The RMF is leviedby the provinceswho retain the majorityof the moniesafter remittinga portionto CentralGovernment agencies. MOC also direcdyreceives revenues from the AddedVehicle Purchase Fee, a supplementary earmarkedtax on vehicleimports and sales, and uses thesefunds, which currently reach aboutY 2 billon/year,to contdbutefinancing for: (a) the roadsincluded in the national highwaynetwork, providing a highershare of financingfor the poorer,inland provinces and a lower sharefor the richer,coastal provinces, and (b) constructionor rehabilitation of rural roadslocated in economicallyless-developed areas. However,according to a recentstudy by MOC, if fundingboth nationaland provincial roads remains at currently budgetedlevels until the year 2000,it will fall 30 percentshort of the amountrequired to developthe highwaysystem in line with the projectedgrowth in demand. The issue is - 8 - especily criticalin tihoseprovinces with the fastesteconomic growth, where road systems are experiencingthe highest levels of congestionand deterioration.

1.21 In additionto its role in planningand financing,MOC serves an important function as coordinator for the constructionof priority sections of the national highway network; in early 1990, MOC established a Technical Coordinating Unit (TCU) to maintainclose contactwith thoseprovinces executing projects financed by the Bank Group. The TCU's main focus has been to provide guidance to the projectexecuting agencies and to coordinate staff training and the developmentof a Road Data Bank and Pavement ManagementSystem at the provincial level, as part of a national investmentplanning and pioritiation system.

1.22 In swwnary, despite governmentefforts to improve the highwaysystem and its utilization and administration, much more is needed to modeniize the system to effectively meet the increasing demands placed on road transport, by improving both physicalcapacity and managementof the sector. The key areas, as reflectedin tbe recent righwayDevelopment and ManagementPaper (para. 1.7), on which the government should focus attentionfor improvementthrough institutionalreforms and taining are:

(a) the role of MOC, to be made consistent with the rapid administrative decentralizationtaking place in the managementand financingof highway developmentand maintenance,and for MOC to be strengthenedto carry out its reformed mandate,particularly in matters such as finance; standardsfor planning, design, and safety, promotionof the NTHS; and training;

(b) highway planning and investmentstrategies, to better identify short- and long-termhighway developmentpriorities;

(c) preparation of feasibility studies utilizing modem highway analytical techniques,based on data and relationshipsreflecting actual conditionson China's highways;

(d) highway maintenance, to be modernizedthrough improved planning and new technologyin order to optimizenetwork performance;

(e) cost recovery and financing, to provide the necessary resources to meet increasingfinancing needs for construction,maintenance and operationsand to encourageefficient use of the highway system;

(t) operations of the road user services industry, both freight and passengers, to reduce costs and improve quality o6 services, through promotion of competition,modern technologyand better management;and

(g) the road constuction industry, to improvethe management,understanding, and application of contract conditions; to modernize equipment, and to clariy client, contractorand supervisionrelationships. -9 -

The Bank's Experienceand StrategyIn Highways 1.23 Of the 10 Bank-assistedhighway projects, to date only the first Highway Projecthas been completed.The project,which was designedto constructand improve 7 sgments of the natonal and 59 segmentsof provincial/countyroad networksin nine prvinces, achievedits origilal objectivesand clearlydemonstrt the benefitsaccrung from improvedacessibility to communitiesdeprived of adequatetransport infiastrct in economicallyless-developed regions. Economicactivity in the areaof influenceof most project roads surgedand incomelevels increasednoticeably. Furthermore,the Bank's involvementfacilitated the acceptance of competitionin the contcting for road woris, in prefrence to force accountoperations, even for smallercivil workscontra, as wellas the meritsof supersion of constructionby speciallyassigned units.

1.24 The Bank straegy for fiture highwaylending for the mediumterm is deied in HighwayDevelopmen and ManagementIssues, Optionsad Straegies(pam 1.7). The stategy is to continuesupporting institutional development and sectowal reforms imetdat modernizingthe highwaysystem and its management,and prtng the investmentcomponents focusing on the high-prioritylinks of theNTHS and the provincial road networksthat feedinto it. A programfor institutionalstrengthening of MOCis being prpsaredand will be supportedunder the Bank Technical Assistance Credit (China Reform, hstitiona1 Supportand PreinvestmentProject - CRISPP)which became effective on March12, 1993. The mainobjectives of thisprogram are to strengthenMOC's capabilit in sectorplnning; to strengthenthe collectionand analysisof data, both for investment planmingfuions and for performancemonitoring; and to provideconsulting assstance in carring out selectedtransport sector policy and planningstudies.

1.25 Whilesome institutional development and sectoralreform components such as staff taining, environmentalprotection, resetement of individualaffected and road safetywill normallybe includedin everyproject, specific issues such as road financing, the efficiencyand quality of road freightand passenger services, the consuction industry and other issues identifiedduring the Bak's dialoguewith GOC, will be addressed selectivelyin individualprovincial projects through studies, pilot reforms or otheractions, witha viewto formulatingrecommendations that mayalso serveother provinces. During the next few years, the projects'investment components will continueto focus on high pority links of the nationalhighway system, and to supportthe developmentof the provinci road networks. Ite strategyalso envisagescontinued close collaboation with MOC,asisting it througheconomic and sectorstudies and throughlending operations, to adaptto the evolvingneeds of the Chineseeconomy. The issuesexpected to be addressed in the proposedproject and in forthcomingprojects include the following: (a) identficationof a structurefor adequateroad user chargesand financing mehanisms, in order to mobilize the necessary resources for road developmentand equitablyrecover from users the costs of the highway system; - 10-

() promotionof adequate road freight and passengerservices, including encouragementto private,collective, and townshipenterprises to enter the businessas part of the reformof the transportsector; (c) upgading the capacity and effectivenessof the highwayconstruction industryand creationof an enablingenvironment for the corporatizationof provincial constructioncompanies and openng opportunies for the developmentof collectiveand privatecontractors; (d) integrationof road transportservices with other modes,particularly in the field of containeization,and the establishmentof modern, integrated multimodalservices; (e) planningand budgeting of highwayexpenditures, including monitoring and controlof monetaryand physical objectives, and efficiency of disburssment procedures; (k) organizationand managementof the highwaycorporations being set up to operatetoll highways; (g) highwaymaintenance management, including finances, resource allocation, organization,and operations; (h) private financingof road infrastructureto analyzerecent experiencein Chinaand providea frameworkfor futureprivate investment;

(0) highwayconstruction costs to analyzecosting practices and assessactual prices and to stimulatecommercially oriented bid prices; and

(j) other issuesthat maybe of interestin individualprovinces. - I1 -

2. XINJIANGUYGUR AUTONOMOUS REGION TRANSPORTSECTOR

A. S1TUATIONADO ECONOMY

2.1 Xinjiang is the largest of China's provinces and autonomousregions, with a land area of 1.6 millionkm 2 (15 percentof China's total land area). The XinjiangUygur AutonomousRegion is surroundedlocally by Gansu and Qinghai Provincesand the Tibet Autonomous Region. It borders eight countries-Mongolia, Russia, Kazakhstan, Kyrgystan, Tajikistan,Afghanistan, Pakistan and India (see Map IBRD25203). Xinjisng is isolated from inland China and obstructed by mountainranges and vast deserts: the Tianshan Mountainsin the north, the Kunlun Mountainsin the south, the Pamir Plains in the southwestand the Gobi desert in the east. The climate is harsh, very cold in winter and hot in summer, with an annual rainfall of only 150 mm.

2.2 Xinjiang's current populationis about 15.3 million (1.3 percent of China's total). The average population density is a low 9.2 persons/kmn2 (10 percent of China's average). The populationof Xinjiangrepresents 13 differentethnic groups with Uygurs and Hans being the majority. It was because of this large ethnic population that an autonomous region was established in 1955. About 20 percent of the population in Xinjiang is urbanized; its capital, Urumqi, has a populationof about 1.3 million.

2.3 Xinjiangis rich in mineral resourcesincluding coal, petroleumand natual gas. The existenceof relativelylarge reservesof iron, gold, copper, nickel, berylliumand vermiculitehas been also confirmed. Despitethe presence of large desertsand mountains, Xinjiang has appreciable agricultural land and, to a lesser extent, water resources. Agricultural and animal production has been increasing and Xinjiang has become an important production area of grain and cotton in China and has large livestock herds, especiallysheep. The gross value of agriculturaland industral output(GVAIO) increased at an annual rate of 11.2 percentduring 1980-92and reachedabout Y 49 millionin 1992. GVAIO per capita in 1990 for the Region (Y 2,444) was about 90 percent of that for China, whereas the correspondingfigure for Urumqi (Y 5,107) was about 190 percent of that for China.

2.4 The current rapid economic growth in Xinjiang is expected to continue, based on the followingdevelopments: - 12 -

(a) Forelg direct Investmenthas recentlybegun to flowinto the large state sectorand is beingdirected inceasingly toward the exploitationof China's abundantmineral wealthj. (b) In 1992 Xinjiangwas grantedautonomy In economicmatters. This decisionallows local leaders of Xinjiangthe sameflexibility already enjoyed by the provincialleaders of Guangdongand Fujian. Provincialauthorities can aow playa pivotalrole in attractingforeign investment. (c) XiJang's; proximityto CentralAsia places it in an area where the industial countres are Likelyto becomeengaged in intensiveregional activity. A number of Central Asian countries-Kazakhstanand Turkmenistanin particular-havelarge depositsof oil and gas. (d) Extensivedeposits of hydrocarbonshave also been found in severalaress of Xinjiang,including the Tarim Basin, in the heart of the TalimkaWn Desertand the Turpan-Hamistructure. (e) X,jlang lieson the route of the newcommuHication link now developing betweenWesten Europeon the one handand Japan and the fast-growing economiesof the PacificRim on the other. China has alreadyopened a railway link betweenUrumqi and Almatay,the capital of Kazakhstan. Almatayis wellconnected by rail withWestern Europe, and Urumqilies at the westernend of the busyrail routebetween eastern China and Xinjiang. This 'land bridge"could become a mainartery betweenWestern Europe and the countdesof the PacificRim. 2.5 The core of the currenteconomy of Xinjiangis locatedon the north slope of the TianshanMountains between and Karamaywith Urumqiat the center. This areais one of 19 key areas of state land developmentin China. It containsthe main indusia developmentsin the Regionsuch as petroleum,petrochemicals, coal, eectric power, iron and steel, buildingmaterials, textiles and food industries. It accountsfor 43 percentof thetotal numberof industrialenterprises, 75 percento. theindustrial output and 50 percent of the agriculturaloutput of the Region. Moreover,it containsfour (Uwunql,, and Bole) of the six opencities in theRegion. The development of this area issupported by the onlyrailroad in the Regionand the two main arte¢ial rossoads of XinxinxaUrunqi-YiningRoad and Altay-Urumqi-HotanRoad. Tbe proposedTurpan-Urumqi-Dahuangshan Highway (rUDH) is an integralpart of this cro and, as such,is expectedto playan importantrole in advancingeconomic activity in the Regionas a wholeand in the north slopeof the TianshanMountains in paryiuar.

,L in March1993, Beijing took another imporlant step to upportXiajisng by openingthe oil andgs new to foraga paiipaon. Thismarked the first m th fomi investorshad been nvitd to help China developits mineral resources. - 13 -

B. TRANSORT NETWoPc 2.6 Xinjiangis servedby a sparsenetwork of railways,highways, civil aviation and a pipeline. The railwaynetwork in Xinjiangis quitelimited compared to that of other provinces. The Regionhas presentlyonly one main line (1,340 kIn), whichconnects Xinxinxiawith Alashakou as an extensionof theLanzhou-Xinjiang (Lan-Xin) railway line, andbranches at Daieyanto reachKorla. In recentyears, the Xinxinxia-Alasbakousection of Lan-Xinrailway lines has reachedits capacity. Doubletracking of the Wuweinan- Urumqisection is nowunder implementation, which would increase its trwsportcapacity from the present 11 milliontons per year to 35 milliontons per year. The southern Xinjiangrailway line (Daheyan-)is also planned to be extendedfrom Korla to Kashi. 2.7 The airline networkof Xinjianghas beendeveloped over just the past 10 years. At present,Xinjiang has 10airports, of whichUrumqi is classifiedas international. Nme localairports are connectedwith Urumqiby XinjiangAirlines. UrumqiAirport is servedby five nationalairlines and three internationalairlines. The networkconsists of 9 intraregionalair routesand 11 interregionalair routes,including 3 intemationalflights to Almatay,Istanbul and Tajildstan.The total lengthof the networkis about70,000 km. The numberof passengerscaied by air has increasedat a rapid pace (37.1percent per year) from 89,000in 1985to 820,000in 1992(Table 2.1).

2.8 Tne pipeline systemin Xinjiangis a local service conveyingcrude oil from the Tarimand Jungar fields to railheads.Oil productionhas increasedfrom 3.91 mi}lion tons in 1980to 7.62 milliontons in 1991(or a 6.2 percentincrease per year). The total lngth of the pipelinesystem in Xinjiangis 849 km, which presentlytransports 6.87 milliontons annually. Oil transportto refineriesin inner provincessfill dependson railways. However,the pipelinesystem for transportof crudeoil to the innerprovinces is nowunder study. 2.9 Xinjiang'shighway system extends about 26,000 km, of whichonly 28 km (0.1 percentof the total) are Class I roads, 3,694km (14.2 percent of the total) are Class I roads, 6,660km (25.6percent of the total)are Classm, 11,128kmn (42.8 percent of the total) are Class IV roads, and the remainderare tracks C(able 2.2). The administive classificationof the road systemin 1992was as follows:

an %

National 8,703 33.4 Provincial 6,007 23.1 County 9,031 34.7 Township 224 0.9 Other 2,059 7.9 1*1 26,024 - 14

2.10 Highwaysprovide the onlymeans of transportfor largeareas of theRegion. However,the extt of the highwaysystem in Xinjiangis limitedand a ignificantportion of the populationcannot reach it. The densityof the systemis only 1.57 km per 100knm, which is equivalentto one seventh of the nationalaverage. This reflects the low populadondensity of Xinjiang. As in the rest of the country,Xinjiang's highway design standardsare suitablefor light vehiclesand low taffic levels. About 38 percent(as of 1992)of the roadshave asphalt pavement, but the pavementsare of low bearingcapacity for the vehiclesthat circulateon them. Moreover,insufficient maintenance and the harsh weatheraffect adverselythe smoothand reliableoperation of highways. Due to the substantialgrowth in tffic volumeand steadyris in the use of heavyvehicles, these roadsincraingly are beconinginadequate to meetneeds. The regionalgove=ment is giving high prioity to repaing and strengtheningthese roads and to expansionof the highwaynetwork, especially Class m and IV roads.

C. TRAmc CHARACTERiSCSAm GRoWTH 2.11 Over the 1985-92period, traffic has been rising stronglyin all modes. However,highways and railwaysare theprincipal modes. Highwaytansport dominated both fieight and passengerservices. In 1992, highwaystrasorted 97 percentof the pasgers and 55 percentof the passenger-kilometersand 83 percentof the freighttons and 44 percentof the ton-kldometersin Xinjiang(rable 2.1). Railwayscried a lesser porton of freighttonnage followed by pipelines. However,railways caied the largest amountof ton-kilometersof freight,reflecting the verylong haul distances (920 km by r,il vs. about 90 km by road), Air transport,albeit very small, is playingan incrasngly impt role in Xnjiangbecause of the long distancesbetween cities and the smallsize of the highwaynetwork and its limited geographicdistrbution. Highway traffic, neveheles, roseat highrates, 8.5 percet per year for freightton-miles and 17.6percent per year for passenger-kilomeWs(Table 2.1). 2.12 The highwaytraffic growth rates are reflectedin the changesin taffic densitieson someof the 14,000km of Nationaland Provincial Roads in the RegionCrable 2.3). In 1985,about 8 percentof the Nationaland ProvincialRoad network cared more than 2,000 motorvehicles per day (mvpd). By 1992, the sectionscarying more man 2,000 mvpdhad increased to 18 percentof the network,while the length of roadscarrying over 5,000 mvpdhad reached364 km. The growthin highwaytraffic can be attributed to severalfactors: the rapid expansion of the economy, a growing vehicle fleet and liberalizato of trucing servicesin the early 1980s.

2.13 The increasein road freightand passengertransport is mosdyrelted to the improvementand upgrading of low-classroads. During1986-90, the totallength of Class m and IV roadswas increasedby about1,500 km and 4,500 km, respectvely. In 1985, highwaystransported 34 millionpassengers, growing to 145 milon passengersin 1992, whichrepresents an annualgrowth rate of about23.1 percent. 2.14 Highwaytraffic includes slow-moving vehicles, mainly tractors of various sizes, biycles and other nonmotorizedvehicles. In 1991, this slow-movingtaffic - 15 - accountedfor about 10 pent (in the convertedtraffic volume) of all motorizedtraffic in majorurban areas (e.g., Urumqi,, Miquan and Turpan). Althoughthis ctffic is decreasingon main roads, it is still a major factor in road congeston and traffic accidents. The secton of TUDHbetween Urumqi and Miquanalong tie existingRoute 216 has the worst traffic congestion. To tackle this problem, Xinjiangis starting developmentof access-controlledhighways where traffic volumes are sufficientlyhigh to jusfifythem (suchas TUDHand Urumqi-KuytunHighway). D. TMEVEHICLE FLr 2.15 The total vehiclefleet has expandedrapidly (12.6 percentper year for motoried weices) in the sevenyears between1985 and 1992(fable 2.4). Duringthis period,the fleetsof medium-and small-sizetrucls, and smallbuses and passengercars grew by 35 percent and 17 percent per year, respectively,reflecting the growth in prosperityand also the light-vehicleneeds of the groving numberof smallerenterprises in the economy. Also, motorcyclesregistered an impressiveannual growth rate of 20 percent. Tractors, which reached 192,000units in 1992, are mainly used for agicultur purposes,but also travel on the roads. This rapid growthposes particular problemsto tansport planners,in and aroundthe larger cities, especiallythe regional capital, Urumqi. E. INT=mn ANDRURAL PASsENGER TRANSPORT

2.16 As i .:ewherein China,intercity and ruralpassenger trspoe. servicesare characrized by overcrowdingigh load factors),high oeating costs and poor quality of service. Such servicesare providedby dtee categoriesof tranport companies:stat owned, collectiveand private. Thereare 1,188routes operated for passengertransport witha totallength of 355, 800 km wiiin the Region. The totalbus fleetused forintercity and rural pssnger transportaccounts for 5,525 vehicles,of which 3,192vehides (58 percent) are owned by 188 stateownedcompanies, 172 vehicles (3 percent)by 172 colectivecompanies and 2,161 vehicles(39 percent)by 2,161 privatecompanies (Table 2.5). Dueto theweakness of publicbusing, many large employers including industr and commecialcompanies have bought their ownbuses, making own-account busing a major passengercarrier. The numbersof thesebuses are not includedin the abovefigures. The own-accountbuses are generallyused in urbanareas. 2.17 In 1991,a total of 122 millionpassengers and 6,277million passenger-km were movedby intercityand rual buses. Of these, the regionalcompany carnied about 2.4 millionpassengers (2 percentof total)and 1,056million passenger-km (17 percentof total) with an averagehaul distanceof 440 ki/passenger. The remainderof the state owned companies carried 50.7 million passengers(42 percent) and 4,186 mmion passenger-km(67 percent),for an averagedistance of about 83 kmpassenger. On the otherhand, priate companiescaid 69 millionpassengers (56 percent) for 1,035million passeger-km (16 percent)for an averagetravel distanceof about 15 km. It shoud be pointedout that the shae of the privatecompanies has beenincreasing at the expenseof the stte-ownedcompanies. - 16-

2.18 Xinjiangauthorities are concemedabout the quality and efficiencyof passenger services and the proliferaton of own-accountbusing as well as the overregulationof the industryby the TransportAdministration Bureau of the Xinjiang CommunicationsDepartment (XCD) and the XinjiangPrice Bureau. However,recent changesin nationallegislation coneing operationof state-ownedenterprises (Ministry of Communicationslegislation on January8, 1993)will giveenterprises the rightto make investmentdecisions, set prices, employand dismisslabor, set salariesand to organize themselves,which would alow for more independentstrategic planning and operationof state-ownedcompanies. Also, XCD issuedon January15, 1993new regulations on road transport, which define and establish a new frameworkfor freight and passenger transportation. Accordingly,entrance into the passengertransport business has been greatlyliberalized and restrictionsas to routeand time schedule,and use of bus terminals and stops have been removed. The new regulationsalso remove restrictionson establishingrepair and maintenanceworkshops. All workshopsmust, however,have a cerificate to securea technicalminimum standard. 2.19 The intercityand rural passengertransport sector is changingrapidly, and there are reasonsto believethat the new nationaland regionallegislation will give room for furthersubstantial changes in the next few years. The bus fleetof privatecompanies mayincrease even more rapidly than today, and the state-ownedcompanies will havemore corporateindependence, which could lead to considerablechanges as to their operational strategies. The governmenttransport administration that guidesand controls the sectoris very complextoday. It willhave zoadapt to the changingconditions, and changeits role in accordancewith the shift from a centaly plannedeconomy to a marketeconomy. There is thereforean urgent need for steamliningand restructuringthe government organizationand consequently,there is an urgent need for a polcy-orientedstudy on intercityand rural passengertransport in Xinjiang. The proposedproject includes such a study(paras. 3.38-3.39).

F. TI%TRUCKIG INDURY

2.20 Roadfreight services have expanded significantly since 1985. Between1985 and 1991,the totalvolume of freightcarried by trucksgrew by about8.9 percentannually, whilefreight tunover grew by 13.2percent annually (Table 2.6). Between1987 and 1989,the shareof total freightvolume carried by private transportcompanies increased from10 percentto 34 percentand the corresponding share of totalfreight tumover handled by privatetransport companies increased from 6 percentto 32 pent. For theyears 1990 and 1991,the shareof privatetransport companies, both in termsof freightvoluiie and turnover,has declined,while the total freighthandled by trucksincreased slightly. The averagehaul distancefor both truckshas increasedfrom about 80 km during 1985-88to about90 km during 1989-91,reflecting an expansionof long-distancemovements. - 17 -

G. HIGHWAY SAFET 2.21 Road safetyis a seriousproblem in Xinjiang,as elsewherein China. In 1992 alone, 1,364 persons were Illed and 2,268 persons wexeinjured in the 4,077 accidentsreported to the policein that year (Table2.7). The relaively low numberof accidentsprobably reflects a low degreeof policereporting, especly in ruralareas. But the severityof accidents(the numberkilled in relationto the total numberkIlled and injured)is also high. Internationalcomparisons of the numberkilled in trafficaccidents per 10,000vehicles show that therate in Xinjiang(and China as a whole)is about20 times higher than that for WesternEurope and North Amenca. It shouldbe recognizedthat China and Xinjiangare in the early stages of motorization(when traditionallytaffic fatalitiesand injuries are high) and traffic is mixed (high proportionof slow-moving vehicles,bicycles, animal-drawn carts) and increasingat a fast pace, and the numberof pedestriansis high. 2.22 Whilethere is increasingconcern about road safety, XCD has hadless scope for actionfollowing the reorganizationof responsibilityfor road safetymatter in China in 1988. Most responsibilityfor mattersaffecting road safetynow lies with the Trafflc Police GeneralTeams of the PublicSecurity Bureau (PSB), including that for vehicle inspecion, driver taining, propagandaon safety, impositionof fines, driver licensing, enforcementof trafficlaws, relatedtraffic management, highway patrols and all aspects of accident control, reporting, investigationand reseach. However, XCD retins responsibilityfor all mattersconcerning safe highway design. XCDand the Traffic Police Genea Teamswould work togetherunder the projectto developa modestprogram to ddressthe road safetyproblem in Xinjiang(paras. 3.35-3.37).

H. HIGHWAYADM[LDlA11ON 2.23 XCD controlsall highwayunderaings in the Region(Chart 1). XCD reportsdirecdy to theregional governmmnt and acts as its administrativearm for planning, budgetingand financing of highwaytansport in theRegion. XCDconforms to thegeneral tansport policyand technicalguidelines issued by MOC.

2.24 The administtionof the road networkin the Regionta place atthre lvels: (a) XinjiangHighway Administation Bureau (XHAB),(b) general highway bureausin each districtand prefecture,and (c) local-levelhighway units of the county highwaybureaus. XCDadministers the regional highways through XHAB, and municipal andcounty transport bureaus administer local highways and village roads. Apartfrom the high-graderoads suchas TUDH,XHAB is responsiblefor all highwaymatters, including constuion and maintenance,but receivesprofessional and technicalguidance from the EngineeringAdministation Departnent of MOC. It has a staff of 129 (Chart2). The 15 municipaland prefectul highwaybureaus and the 77 countybureaus in tL.eregion have a total staff of about 16,620,of whichtechnical personnel are 793. 2.25 The XinjiangHigh-Grade Highway Construction Authority (through is ProjectExecution Office-PEO) is presentlyresponsible for theconstructon of high-gade - 18 - highwaysand is soon expectedto becomethe High-GradeHighway Administration Bureau, which will be in charge of the direction, coordination,planning, design, construction, supervision, operation, and maintenanceof high-grade highway projects in the Region (Chart3). The multi-agencyAuthority is led by two Vice-Presidentsof XinjiangPeople's Govemment (one is Director-General,the other Deputy Director-General)and by the Deputy Director of the XCD (ChiefOperations Engineer). The Authonitywas established to overcomeproblems of coordinationin design and implementationwhich were expected to emerge in matters such as land acquisition, resettlement, and construction of infratructure related to high-grade highways. Also, PEO is responsible for raising constructionfunds, includingcollection of tolls on these highways,and paying back bank loans. It currently has a staff of about 40 and this number will be increasedas the scope of work is expanded.

I. PLANNING,BuDGETG ANe FINANCaNG

2.26 Planning. XCD has overall responsibility for planning, construction, opation and maintenanceof the regional highway network. The prefectural and county authorities have considerableautonomy in planningsmaller road investments,but this is subject to the approvalof XCD. Each administrativegroup prepares investmentplans for the highway network under its jurisdiction and submits them to the planning division of XCD by June of each year for the next year's plan. XCD approves the next year's plan for each county or local authonty concernedbefore the end of March. Similarly, using inputs from lower-level administrative groups, XCD prepares the five-year road developmentplan, reflecting national or regional developmentpolicy guidelines and objectives. After review and approvalby the XinjiangRegional Government, the plans are implemented.

2.27 Budgeing. n commonwith other provincialcommunications departments in China, XCD's planning division adopts a balanced budget policy. The proposed highway expenditures are balanced against the revenues earmarked for highway development;the amount of investmentapproved for each year is closely related to the revenuesexpected for the same year.

2.28 Financing. Highway fundingsources and expendituresare summarizedin Table 2.8. Data for 1992 are dispayed in Figure 2. 1. Funding for highway construction and maintenancecomes from several sources, but by far the largest source is the road maintenancefee (RMI), which provided Y 661 million (about 85 percent) of all highway funding(Y 777 million)for the Regionin 1992. This fee is collectedby XCD from motor vehicles throughoutthe Region. XCD retains all revenuesfrom RMF after the following are paid: Y 15 million to the Ministry of Pinance's Energy and CommunicationFund; Y 10 millionto the State PlanningCommission (SPC)-controlled Budget Adjustnent Fund; and the Public Security Bureau (PSB) for their highway patrol and administive opeations (about 2.5 percent of the maintenancefee after deductingY 25.0 million for energy and communicationsfund and the budgetadjustment fund). The RMF retained by XCD increasedfrom about Y 289 million in 1986 to Y 620 millionin 1992. - 19-

F1gure 2.1: HIGHWAYREVENUE AND EXPENDntv IN XUNILGIN 19

5.32

4.2 Admlnturgto

Revenue Expenditures

: 0MM - & N Commuuafts Fmd 8n_ bzd A4anu nd mli

2.29 The fee rates for the RMF are determinedthrough discussionsamong the Regonal PlanningCommisson, XCD, the Regional Finance Departmentand the Priig Bureau, and are subject to approval by both the Regionaland Central Governments. The RWMFis levied monthlyon vehicles owned by transportcompanies as a percentageof their financial tunover (presently 15 percent of gross revenue). Other vehicles are cdrged a monthly fee (presently Y 150 per month per payload ton). Previously, dpificant disounts were offered to larger vehicles. However, neither the linear charing scale nor the discounts for larger vehicles are well suited to Xinjiang's highway financingneeds; recent prace would favor higher fees for the heavier vehicles that tend to cause dispoportionately greater damage and repair costs than in simple proportion to their weight.

2.30 Other sources of revenue include grants from MOC, which provided Y 111 million (14 percent of total) in 1992, and locally collected capital and self-raised funds with an aggregate amount of Y 5 million (1 percent). Te Region also ries highwayfunds by adding a paenger tariff surcharge,currently 1.0 fen per passger-km. The total amounts collected from this source were Y 33.1 million in 1991 and Y 36.9 million in 1992 and have been used for constructionof transportationteminals. Significanly, the XlnjiangRegion has also decided to ch-argea freight surcharge fee of Y 0.01 per ton-kilometerstaring in 1994. This is expectedto rise more than Y 120 milLion a year. Also, the regional governmentis expected to apply starting in 1995 a tax on increases in prices of land as a result of constructionof major highways. This is expected to generte an annual revenueof about Y 30-40 million. Both of these sources of revenue will be allocated to XCD.

2.31 In additionto road user charges discussedabove, substantialfuel taxes are levied, but these accrue to the Ministry of Finance (MOF) and are not allocated back to highwayfunding. Fuel taxes currently amount to 43 percent of the base price of gasoline and 13 prcent of the base price of diesl fuels. Total fuel prices, including taxes, are - 20 -

ignificantlyhigher than inteonal marketpnces, both for plannedallocations and for open-marketconsumption Crable 2.9).

J. ENGRNG, CONSRUCrION ANDMAITANCE

2.32 Eneeg. Roadand bridgeprojects are designedby the planningand designinstitutes at the regional,prefectual and countylevels. The XinjiangHighway Plning, Surveyand Desig Institute(XHPSDI) is qualifiedfor ClassI roads and is resposible for all majorroad, bridgeand tunnelprojects. XHPSDIis competentand has qualifiedand experiencedpersonnel. It carriesout mostof the work itself but also uses the servicesof MOC'sdesign institutes t'nd private consulting firms outside the regionon a contractbasis. Computer-aideddesign methods are usedfor engineeringesfimates, costs and structuralcomputations, but mostof the dradng workis donemanually. The design institutesat the municipaland countylevels are responsiblefor lower-gradecounty and townshiproad designworls. Thesedesign institutes are, in general,competent and have exerenced personnelfor carryingout their respectivehighway design task. 2.33 ConstructionSupervision. Xinjiang's Quality Control Center is responsible for quality testing and overaUlsupervsion of all tsport projects in the Region. Constructionof roads and bridges is supervisedby pesonnl from county, city and precal units. Gerly, theseunits hax a relativelycompetent personnel to supervise the worksadequately. The ProjectSupervision Office (PSO) of the XinjiangHigh-Grade HighwayConstruction Authority (XHGHCA) has been approved by MOCto carryout the supervisonof higher-classhighways in Xinjiang.It is responsiblefor construction quality, testingand overallsupervision of suchroad and bridgeprojects. 2.34 Construction. XCD's Highway EngineeringDivision is normally responsiblefor the constructionof key highwayprojects in the Region. XHGHCAis responsiblefor the managementand constructionof high-standardroads. The municipal and countybighway bureaus have their own constructionunits to carry out constuction of minor prects within their administrativedisticts. However, in recent years competitivebidding has beenintroduced in the Region,following the SPC dictive that all majorcivil worksbe awardedaftr competitivebidding. This led to the rapidgrowth of the domesticconstruction industry. Man) of thelarger regional and urbanconstruction bureaus,railway engineen and ming engineeringunits have been reorganizedinto fincially independentcontracting companies. Thus, the cstruction units under the XCDs of the variouscities and provincescan also particpatein transprovincialbidding actii Conacts for all the civilwork contract sections for the proposedTUDH will be selectedthrough prequ on and ICB (para.3.59). 2.35 Mn ce. Highwaymaintenance is carried out by countyhighway bureausunder the controlof municipalauthorities. Maintenanceis generallynot well organizedand not wellcanied out. Themethods are generallylabor-intensive. Out of the total 26,000km highwaynetwork in Xinjiang,14,700 kn are maintainedby XHAB,of which9,000 km are paved. The conditionof morethan half of the pavedroads is ated as "poor' or 'very poor." This issuewill be addressedunder the proposed project though - 21 - a study of highway maintenance(para. 3.33), provisionof maintenanceequipment (paa. 3.19), and trainingof personnelinvolved in the managementand executionof maintenance activites (para. 3.23).

K. TRAING

2.36 The staff of Xinjiang's highway departments have, in general, not been exposed to new technology and therefore often use outmoded work methods and equipment. XCD staff have benefitedfrom the trainingprovided by MOC and the regional taiing institutes, especially the Xinjiang CommunicationSchool and the Xirwiang TechnicalWorkers School. The proposedproject will support the training efforts of XC1) by (a) providing training to personnelof XHAB (andits branchesin the prefectures, cities and counties) and XHGHCA in the fields of highway planning, design, construction, supervision, maintenance and operation; and (b) strengthening the Highway Planning, Survey and DesignInstitute and the Traffic ScienceInstitute as well as the Communication School, CommunicationTechnical Workers Schooland XHGHCAthrough training of their staff and provision of modern equipment (paras. 3.21-3.30).

L. HIGHWAYDEVEOPMET

2.37 Xinjiang's investmentsin highwayshave increased from Y 5.9 billionduring the 6FYP (1981-85) to Y 21.3 billion during the 7FYP (1986-90). The deails of the highway network expansion over the 8FYP (1991-95)and 9FYP (1996-2000)are set out in Table 2.10.

2.38 The highwaydevelopment plans of Xinjiangset goals for three differenttime horizons: long term up to 20 years, medium term up to 10 years and short term up to 5 years, the latter coveringimplementation of the 8FYP. The broad long-termand medium- term goals are as follows:

(a) Long -TermHghway Development(to 2010). Completethe construction of inxinxia-Urumqi-Yiningand Altay-Urumqi-Hotanmain arterials, comprising392-km expressway, 540 km Class I highway and other classes with a total length of 38,000 km.

(b) Medim-Term Highway Development (to 2000). Maintain and upgrade the existing tunk road network (National and Provincial Highways)and develop and maintainthe County and Village roads. It is aimed to extend the total road networkto 30,600 kn by the year 2000, of which 222 km are exwessways, 190 km are Class I highwaysand 230 km are Class II motor- vehicle-onlyhighways. The 9FYP for highwayconstruction plan is shown in Table 2.10(b).

(c) Short-Term Highway Development(8FYP to 1995). The short-termplans for highway development are embodied in the 8FYP for the Region. Specificprojects are included to complete about 48 km of Class II motor- - 22 -

vehicle-onlyhighways. Construction of the proposedTUDH is expectedto commencein tfie secondhalf of 1994, and constructionof the Urumqi- KuytunHighway in 1996. Other constructionof nationaland provincat roadsincludes construction of 140-kngeneral Class E highways;upgrading of 206 km existingClass II highwaysand 362 km existingClass m and Class IV highways;and upgradingof 800 km Class IV and unclasd provincialhighways to Classm highways.In addition,1,584 km of new countyand townshiproads would be built. In 1995,the total lengthof the highwaynetwo_ -willreach 27,750km. The total 8FYP investmentis esfimatedat Y 2.7 billion. The short-termhighway construction plan is shown:in Table2.10(a).

2.39 Realizationof the plannedimprovements until the year 2000 wouldmean that ependitures,and consequently,revenues, and borrowings would have to increaseby about200 percentover their currentlevels (Table 2.8). It is doubtfulthat revenuescould be increasedby suchlarge amounts over a shortperiod of time. XCDhas estimatedfuture revenuesassuming that in additionto user feesgenerated by new highwaytolls a newreal estate tax wouldbe imposedon increasesin pricesof land as a resultof constructionof major highwaysand that those taxes as wellas the revenuefrom the freightfee (para. 2.30)would be alocatedto XCD. In practice,problems could arise in implementationand the full amountsof both sources might not materialize. Consequently,the proposed highway developmentplans must be consideredas ambitious, and probably their mplementationwould extend beyond the currentlyplanned completion dates. However, there is a dangerunder these circumstancesthat mantenancecould be sacrificedfor new construction. XCD is, however,aware of the need to improvphighway investment planningand prioritizationas well as the trend towardsrelatively less expenditureson maintenance.Although expenditures for periodicand routine maintenance increased at an annualrate of 20 percentduring the 1980s,the currentlevel (about Y 27,000/kminclusive of rehabilition) stillappears inadequate for actualneeds and warrantsa greatershare in the future. As a percentageof total highwayexpenditures in Xinjiang,maintenance has deaeasedfrom about 24 percentdurng 1985-90to about15 pent during1990-92 (Table 2.8) largelyas a resultof a 30 percentincrease in construcdonexpenditures. Xnjiang is thereforealso contideringways of allocatinga greatershare of resourcesto maintnance. The instituonalstrengthetrainng containedin theproposed project (paras. 3.21-3.3 1) shoud helpimprove investment planning and highwaymaintenance and increase XCD's institutionalcapacity to implementits futuredevelopment and maintenanceprograms. - 23 -

3. THE PROJECT

A. PiRoJCr FORMuLATONAND PREPARAON 3.1 China'sEighth Five-Year Plan (1991-95) highlights that transport botdenecks continueto be a beyconstaint to development.China's high economicgrowth is inducing evenhigher growth rates in tansport demand,as is commonin developingeconomies that havea low incomebase. Further,the diversificationand strucul transformationof the economy, toward more light and agro-industry,industry generally, and more interprovincialtrade, coupled with railways' capacity constraints, is causingan acederatng demandfor road transport. This nationalpattern is also true in XinjiangRegion, in pariular in its heavilytraveled east-west corridor along National Highway No. 312 from Urumqito Turpanin the east and Kuytunand the Kazakhstanborder in the west. This route is a key strategiclink amongthe 12 nationaltrunk routes in the NTHS,and is earmarkedfor early development.

3.2 The proposedproject was preparedunder the directivesof the Xinjiang CommunicationsDepartment, with theguidance of the StatePlanning Commission (SPC) andMOC. The feasibilitystudy for theproject's major component, TUDH was prepared by the XinjiangPlanning Survey and DesignInstitute (PSDI). Subsequentrevisions and updating confinned the economicbenefits and importanceof the proposedTUDH. Followingthe initial identficationmission in July 1992, the preparationmission in November1992, and thepreappraisal mission in April 1993,the project was appraisedin November1993.

B. PojEcr OBUEcnvEsAND RATIONALE FOR BANK INVoLvEzMNT 3.3 The proposedproject has the followingobjectives:

(a) supportcontinuing development of road infastuctureto faiitate mobility and increasethe efficiencyof road transportin the interestof stimulating economicactivity; (b) promotethe developmentof institutionalcapabilities of Xinjianghighway agenciesfor transportplanning and investmentprioritization, construction and maintenance; (c) improvethe efficiencyof road passengertransport services; (d) increasethe safetyof road transport;and - 24 -

(e) improvehighway maintenance operations to betterpreserve past investments in the Region's roads.

3.4 These objectivesare consistent with the Bank's assistance strategy for the highway sectr in China (para. 1.24). Although China has a fundamentally sound approach to highway development,it still lacks experience in the constructionof high- clas, limited-accesshighways (which are needed to eliminatebottlenecks in economically more developedcorridors) and would also benefitfrom technologicalimprovements in the constructionof lower-levelroads. The Bank's assistance in these areas is well placed, particularlywhen combined with its catalyticrole in promotinggreater investment for rural infastructure,as well as policy changes,institutional development and technologytransfer.

C. PROJECr SCOPE

3.5 The scope of the project includes:

(a) constuction of a 283.3-km highway (n new right-of-way(ROW) between Turpan, Urumqi and Dahuangshan(l'UDH) which consists of an eastem secdon between Turpan and Urumqi with a length of 176.3 km and a northern section betweenDahuangshan and Urumqi with a length of 107.0 km. These lengthsare classifiedby design standardas follows:

(i) about 101.3 km would be Class I (four lanes) consisting of about 47.5 km in the eastern section (28 km in the Poplar Valley area and 19.5 km from Urumqi to the Fertilizer Plant to the south) and 53.8 km n the northern section (from Hetian Road, north of Urumqi to Tianchi intersection);and

(ii) about 182.0 km would be Class II (two lanes for motor vehicles only) highway consistingof about 128.8 km in the eastern section (66.4 kan from Turpan to Poplar Valley and 62.4 km from Poplar Valley to the Fertlizer Plant) and 53.2 km in the northern section (from Tianchi intersection to Dahuangshan)with the exception that 6.9 km of the eastern section (consistingof about 4.8 km in the city of Turpan and about 2.1 km in Salt Lake area) wouldbe constructedas four-laneurban roads.

The ROW required for a four-laneClass I road would be provided for the full length of TUDH. TUDH would be operated as a toll facility. This would entail:

(1) supply and installation of electical, electronic and mechanical equipmentfor toll collection,telecommunication and lightingof bndges interchangesand toll collectionarea, on or along TUJDH,and - 25 -

(ii) constructionalong TUDH of managementand maintenancebuildings, parkingareas and a servicearea. (b) construction,rehabilitation and upgradingsections of six roadswith a total length of about 16 kn that would interconnectand feed traffic to the proposedTUDH at majorintersections and interchanges;

(c) construction/supervisionfor TUDHand the linkingroads; (d) provisionof equipmentfor: (i) controlof constructionquality and for monitoringof the environment duringthe constructionof TUDHand lining roads;

(ii) operationand maintenanceof TUDH; (iii) maintenanceof the Xinjiangregional highway network; anid (iv) institutionalstrengthening of the XCD and relatedinstitutions and the taffic police. (e) institutionaldevelopment consisting of strengtheningseven institutions and training schools affiliated with XCD;

(t) technicalassistance to carry out a study of highwaymaintenance policy optionsand to preparea programto maintainand rehabilitate the highway network;

(g) a road safety program consistingof (i) improvementof treatmentand analysisof accidentdata, (ii) improvementof trafficlaw enforcementwith emphasison speedregation and drunkendriving, and (iii) a pilotprogram on accidentblack spots improvement.These activitiesinvolve training, technicalassistance and purchase of equipmentand related computer software;and (h) technicalassistance to carry out a studyof intercityand mral passenger tasport Constructionof TUDH 3.6 The Turpan-Urumqi-DahuangshanHighway (TUDH) would consist of two setins, namelythe 176.3-kmnTurpan-Urumqi section (eastern section), and the 107.0-km Dahuangshan-Urumqisection (northern section). Thesesections are separatedby a 22.4- km link withinthe city of Urumqi. TUDH serves one of the most heavilydeveloped coridors in theXnjiang Region and forms a mainpart of thebasic cros- patternof major highwayscentered around Urumqi. It serves as the eastern and noifrn gatewaysto - 26 -

Urumqi. Moreover, the eastemnsection of TUDHfrom Turpan to Urumqiis a part of one of the 12 main roads in China selected by MOC for expressway development. The highwayis National Highway No. 312, which starts at Lianyun Port in Jiangsu Province and ends in City, Xinjiang. The northern section from Dahuangshanto Urumqi is a part of National Highway No. 216 from Altai to Hetan.

3.7 The eastern section of the existing TUDH betweenUrumqi, the capital of the Region, and Turpan to the southeastis about 193 km. The northern section from Urumqi to Dahuangshan,passing through Fukang, and serving Tianchi Lake, a major tourist attraction in Xinjiang, is about 122 km. The existing road is a Class HI road (except for about 15 km of Class II road immediatelynorth of Urumqi) which does not allow for separationof the motorizedand slow-movingtraffic along the whole length of the road. The recent high increases in traffic and the expectedfuture growth cannot be accommodatedby the existing road beyond 1998 at an acceptable level of service. The wideningof the existingroad would not be feasiblealong 40 km becauseof the extensive side development and the poor construction of the existing pavement and drainage strucures.

3.8 The proposed highway would be constructed to Class I and Class II standardsas stipulatedin the Chinesenational geometric standards for highways. The total length of the Class I sectionsis 101.3 km and that of Class II sections is 182.0 km. The ROWrequired for a four-laneClass I road would be provided for the full lengthof TUDH in order to allow for future expansion of the two-lane sections. However, the four-lane section between Shangshaheinterchange and the Urumqi ending point for the Urumqi- Dahuangshan section, with a total length of about 6 kIn, would be planned to allow exanson to 3ix lanes in the future and the ROW would be secured to accommodatesix lanes. This section is urban in nature and carries the highest traffic volumes.

3.9 Slow-movingvehicles such a3 tractors and bicycles will not be allowed access to TUDH. Access to and from TUDH would be providedat intersectionsand six interchanges; two in the eastern section, located at Jidong and Jinan, and four in the northern section at Fukang, Ganguanpu, Shangshahe and Kashidonglu. TUDH also includesabout 13 grade separations,about 3 long bridges, about 19 medium-sizebridges, about 75 small bridges, about 13 underpassesto provide access to adjacent property, and about 540 culverts. The pavementstructure for the Class I highway sectionconsists of 4- cm medium-grainedasphalt concrete, 5-cm coarse-grainedasphalt concrete, 6-cm asphalt- mixed crushed stoneunder which there are 20-cmcement stabilized macadam base course, and 25-46 cm macadam subbasecourse. The total thicknessis 60-81 cm. The pavement structure for the Class H highway section consists of 4-cm medium-grainedasphalt concrete,6-cm asphalt-mixedcrushed stoneunder which there are 18-cmcement stabilized macadambase course, and 29-32cm macadamsubbase course. The total thicknessranges between 57 and 60 cm.

3.10 TUDH would be operatedas an open toll highway. Four tolling stationsare planned in the eastern section, and five tolling stations in the northern section of TUDH. In addidionto civil works, TUDH includes: (a) the electical, electronicand mechanical - 27 -

(E&M)installations required for toll collection,telecommunications, power supply,and lighting;(b) constructionof one servicearea (to the w st of Tianchiintersection) and two parkingareas (Xiaochohuand Salt Lake); and (c) five managementand maintenance buildingsto be locatedat Turpan,Dabancheng, Wulapo, Urumqi North, and Fulang. 3.11 Thepreliminary and finalengineenng of TUDHhave been prpred by the Xnjiang HighwayPlanning, Survey and Design Institute(XHPSDI) and reviewedby Canadianexperts. MOC has approvedthe preliminarydesigns including those for the mountainoussection in October1993. Thedesigns were found to be generallysatisfactory to Bankstaff. The final engineeringdesigns and bid documentsfor the nonmountainous sections were completedin December 1993 and the correspondingones for the mountainoussection are expectedto be completedin August 1994. Both would be reviewedby the Canadianexperts. 3.12 The proposedTUDH is about 283.3-kmlong, not includinga 22.4-km sectionthrough the city of Urumqi. Continuityof TUDHand realizationof its fullbenefits neessitate that this sectionbe constructedand readyat aboutthe same time as TUDH constructionis completed. This connectionwould be locatedon a new ROW on the formerUrumqi River bed. It is envisionedthat it would be constructedto Class I standards. MOC's No. I Design Institute (Xian) was entrustedin June 1993 with preparingthe feasibilitystudy for this connection(according to TOR acceptableto the Bank). The prefeasibilitystudy was completedby the end of December1993 and the engineeringfeasibility study is expectedto be completedby the endof August1994. The prlminary engineeringstudy is expectedto be completedby the end of December1994. At negotiations,agreement was reachedAt XinjiangUygur Autonomous Region (XAR) wiufiunish, or causeto befurmished, to the Bank (a)promptly upon theirpreparaion anypans, sudis, specifications,construction and procurement schedues and suchother docwmentsevidencing the constructionof thisconnection, and (b)any records and repors in respectof or relatingto this connectionas may be reasonablyrequested by the Bank. 3.13 I3nkIngRoads. The openingof the TUDH would bring a significant increasein trafficto the roads connectingit to the citiesalong the existng roads and to other povincialroads transversal to the TUDH. Withoutthe properlinking to the cities and townsfrom interchanges and intersections, TUDH would not be effectivelyused. On the basisof a comprehensivereview of all roadslinking at six interchangesand several at- gradeintersections along TUDH, XCD selectedsix provincialroads, with a total length of 16 kIm,for new construction,upgrading and reconstruction(Table 3.1). 3.14 The designsfor theseroads were prepared by XHPSDI. The finaldesigns and bid documentswere completedin December1993 and are consideredsatisactory. Dueto the shortlength of tiese roads,no separatebid documentswere prepared for them; insteadthey are includedwithin the correspondingdocuments for TUDH. - 28 -

Supervion of Constructionof TUDHand LinkingRoads

3.15 Althoughindependent supervision of constructioncontracts is gailniggeneal acceptancein China, local staff still have only limitedexperience in the supervisionof majorhighway works, particularlythose awarded under ICB conditions. Basedon the experiencegained from ongoingBank-financed highway projects in othe. provinces,a combinedteam of localengineers, technicians and other personnel and foreignconsultants wouldbe set up to supenrisethe constructionof the TUDH and LinkingRoads. The organiaional arrangementsfor the constructionsupervision of the TUDH have been drawn up by PEO and were found to be adequate. The Terms of Referencefor supervisionwere approved by the Bankin August1993. The foreignsupervising enginees wouldbe integratedinto the organizationwith operational responsibilities. Furthermore, the foreignconsultants would help establishprocedures at all levels of the supervisory work,including on-site inspections and laboratory testing, and train local staff both through formaltraining sessions and on-the-job. 3.16 A joint foreign/localteam composed of about230 localstaff and 6 foreign expertcivil engineerswas agreedfor the supervisionof TUDHand Lnking Roads. They would be retined until completionof the constructonof TUDH. The forgn firm supplyingthe expertswould also providethree trainersto train 150 staff locallyfor one monthand 30 staffabroad for one month. The totaleffort by the foreignstaff is estimated at about 260 person-months,composed of 240 person-monthsfor supervisionof civil works, 5 person-monthsfor trainingboth locallyand abroad, and 15 person-monthsas contingencyto be used for unforeseenspecialist services to be used if and whenneeded. Equipment

3.17 The equipmentto be providedunder the project has beenidentified by XCD and reviewedby the Bank. The final agreed lists of equipmenttogether with their estmated costsare availablein the projectfiles. Theselists includeequipment required for operation and maintenanceof the TUDH, control of constructionquality and monitoringof the environmentduring constructionof TUDH and linkng roads, mantenace of highwaynetwork and institutionalstrengthening of XCD and relted institutionsand trainingschools and of the trafficpolice. The Bankand XCDagreed that the equipmentlists should be lookedat as subjectto reasonablechange with regardto type and number, and consequently,some flexibilityshould be exercisedduring project implementationto properlyallow for changingcircumstances and needs. 3.18 Equipment for TUDH. To set up and efficientlyoperate the oetral loboratoryin Urumqiand theregional laboratories in Turpanand Fukangin supportof the constructionsupervision activities, there is a need for equipmentand instruments, particularlyfor soils and asphalt concretetesting. In the course of drawingup the EnvironmentalAction Plan (EAP),the equipmentand instrumentsrequired to implement the environmena protecion measureshave been identified. For the opertiion and maintenanceof TUDH,equipment requirements have also been identified. This equipment is in additonto the sitelabomtory equipment and surveyinginstruments to be providedby - 29 - the contractorsfor the civil worksand the toll collectionand communication equipment to be providedby the contractorfor the electrical/mechanicalworks for TUDH. 3.19 Equipment for Maintenanceof Roads. This equipmentconsists of urgentlyrequired equipment for routine,penodic maintenance and heavy repair of roads to replenishthe equipmentfleet of the regionaland countymaintenance units. 3.20 Equipmentfor InstitutionalStrengthening. Theseconsist of specaized equipmentfor supportof the seveninstitutional training schools of XCI) that wouldbe strengthenedunder the proposed project (paras. 3.21-3.31) as wellas equipmentfor traffic police. The latter consistof equipmentrequired for enforcementof speed reguons, alcoholtesting and on-sitevehicle testing as wellas a computerand relatedsoftware for collecdonand treatmentof accidentdata and policecars for law enforcement. Isttutional Strengthening

3.21 The institutionalstrengthening measures included under the projectare part of a broad, longer-termeffort to build up the planning,construction, maintenance and overallmanagement capacities of the XinjiangCommunications Department in lightof its rapidlyepanding investmentand maintenanceprogram. The project has two specific areas of focus: first, to strengthenthe capacityof the XCD to analyzeand formulate sctoral policies,plan, construct,supervise, maintain and operatethe Region'shighway qsstem. Second, to strengthenthe recently created Xinjiang High-GradeHighway Constuction Authority (XHGHCA)in the planning, design, constructionand supervision as well as operation,maintenance and toll collecton on high-gradehighways in all of ICjiang. 3.22 Institutionalstrengthening objectives will be attained ftrough staff devlopmt and the provisionof relevantmaterials and equipment.The immediate objectiveswill be to: (a) establisha High-GradeHighway Administration Bureau (HGHAB) as a permanentoperational arm of the XCD,to be responsiblefor administing high-gradehighways within that Department.The projectwill facilitatethe smoothtransition of the ProjectExecution Office (PEO) from a temporary operationalunit of the XHGHCAto a permanentarm of the XCD.ll The organizatioal,financial and staffingmeasures prepared by XCDto achieve th objectiveare detailedin Annex 1 (Part 1). The HGHABwill be responsiblefor the implementationof newprojects, for the managementof completedprojects as well as the collectionof tolls and fees on the high- grade highways. When fully operational,in 1998, the HGHABwill be

11 On Novenber2, 1993,the Xinjiag Commicatios eparnt receivedaroval fromth Commite on GovenmenOrganization of the XAR, to establisha High-GradeHighway AdmiistratonBure withadminisvtave funition. - 30 -

staffedby 125at headquartersand will requirea total staff,at all levelsof approximately1,400 people. (b) enableXCD to draw on a more competentmanpower for the overhaul, repair and maintenanceof the entire highwaynetwork and of equipment .cessary for thosepurposes. This will resultfrom an increasein the skills and comtpetencyof its own personnelas well as of highwayrepair and maintenancepersonnel trained by the XinjiangCommunications Technical WorkersSchool (XCIWS) and the Xinjiang Communications School (XCS). The mateial, funancial,pedagogical and staff developmentmeasures requiredto achievethis objectiveare shownin AnnexI (Part2); and (c) enableHGHCA and other arms of the XCD to draw, for their needs in project and economicanalysis, highway and bridge designand highway safetyon the capacitiesof the XinjiangHighway Planning, Survey and Design Institute (XHPSDI)and the XinjiangTraffic ScienceInstitute (XTSI).The overalltraining of staff fromthese institutesis summarizedin AnnexI (Part 3).X/ 3.23 Training. Training will be the main instrumentfor achieving the ibtution strengthening objectives. It will be implementedthrough skills upgrading for staff from the aboveoffices, training and stu4y institutes,as well as for staf from the Xlnjiang Highway Admition Bureau tXHAB), the Xinjiang Communications Depatment (XCD)and the PublicSecurity's Traffic Police GeneralTeams (PSTP). A specialstrengthening program will focus on thecapacity of the XC`IWSand XCS, the two schoolsassociated with the XCD for tining staff in the highwaytransport sector. The ills upgadingprogram will consistof three kindsof training: (a) trainingconducted in Xlniangtaining institutions,(b) Waining provided by traininginstitutions located in otier parts of China, and (c) trainingthrough short-term study abroad or in awarenessand invatio studytours. Ir. total,the project provides for thetraining and sldils upgrading of 1,767sector personnel, 89 percentthrough in-ountry training (1,576 within China, i.e., 1,223in XinjiangRegion and 353 in other Chineseprovincial institutions) and l1 percent in exteral short-termstudy (121 staff members) or awarenessand investigation study tours (70). Short-termtraining abroad will be in areas for whichthere either is no current capacityin China or which involve exposureto and practicalinvolvement with new technologies.In mostinstances, this willbe precededby trainingin China,with the best performersbeing selected to proceedoverseas. Thosegoing on to studyand awareness tourswill laterassist in thepractical and operationalskills upgrading of thosebeing trained in Xinjiangor in otherprovinces. 3.24 Each of the agenciessupported by this componentprepared proporals for staff and institutionaldevelopment. The proposalswere reviewedin detail by the preappraidsland appraisal missions for interagencyconsistency and sectoralcoherence and

2,/ A detaid brakdown of the overalltaining program,by subjectareas and targeted institutions in ho Xiujiag highwaytanspott sectoris availablein the ProjectFile. - 31 - found to be satisfactory. In view of the central role of training for strengthening institutionalcapacity, the XCD has established(a) a LeadingGroup in chargeof personnel trainingunder the project chaired by the DeputyDirector and (b) an Officefor thisleading group to undertakethe planning,implementation, financial management and coordination of personneltraining. A trainingcoordinator to managethis componenthas been named to headthe officewithin the PEO Director's office; the coordinatoris assistedby two staff membersfrom the Scienceand Technologyand EducationDepartments of the XCD. Objectiveand non-discriminatorycriteria for selectingstaff for furthertrining, in eachof thecategonres and fieldsof training,have been agreed upon and will be madepublic at the start of the project. A TrainingReport detailing the scope,management, pianninig, and implementationcriteria for theTraining Component has beenprepared. It includesa two- year trainingprogram (1994195) for each of the relevantinstitutions..I/ Equpment to supportthe entitiesto be strengthenedis includedunder the equipmentcomponent of the proposedproject (para. 3.20). 3.25 The XinjiangCommunications Department (XCD) is the governmental deartment in charge of highwayand waterwaytransport within the XinjiangUygur AutonomousRegion (Chart 1). It is a policy-maldngagency, supervising the overall transportsystem, setting strategic operational and developmentobjectives, regulating the transportsystem and setting sector management policies, with planning and implementation overight responsibilities.The XCD overseesthe operationsof the Xhlang lighway AdministrationBureau (XEAB) whose main dutiesare to supervisenational roads and provincialarteries through maintenance subdivisions which also provide support to county andtownship road maintenance units (Chart 2). The XHABis also involvedin contacing and supervisionof highwayconstruction from the examination of designdocuments to the acceptanceof completedprojects; it monitorshighway conditions, assesses needs and daws plans for highwaymaintenance.

3.26 A managementaudit of the operationsof the XCD and its constituent bureaushas not yetbeen conducted. However, there is a clearneed to strengthenthe staff andoffices from the centralpolicy-making and serviceDivisions of the XCD,particularly thosewith oversighton the road transportsector as a whole. Withinboth the XCDand the XHAB,the specifictargets for trainingand staffdevelopment will be seniordecision- makers,professional technicians and managerialstaff in highwayplanning and design, egineeringand testing,and highwayconstruction. In the XHAB,st if willalso be trained in highwaymaintenance and repair. 3.27 The Projecthxecution Office (PEO)operates under the supervisionof the High-GradeHighway ConstructionAuthority and the Xinjiang Communications Department.It was establishedin April 1992to supervisethe constructionof high-grade highwayswith external funding. At the completionof thepresent project, it is anticipated that thePEO will becomepart of the High-GradeHighway Administation responible for

2/ Ike ThmmgReport supplemented by staffdevelopment programs of the XHPSDIand XTSI,is inludedas part of the ProjectFile. Also,included are thejustifications for theneeds undedlying eachrequest for htaing by eachrelevant insttution. - 32 - managementof the TUDHand other high-gradehighways in the Region. The PEO has an establishmentstaff of 40 organizedin 5 offices(see Chart 3). By 1998,it will havea headquartersstaff of 125 and a total establishmentof 1,400. 3.28 The PEO is a newlycreated Office, and mostof its staff has little or no aexrience in the constructionand maintenanceof high-gradehighways. Given the locationof XinjiangRegion, it is alsodifficult for the PEO to recruitqualified personnel fromother provinces. Current staff needs to be exposedand trained in thetechniques used in the planning,design, supervisionof constructionand maintenanceof high-grade highways.Particular areas of emphasisin skillsupgrading will be in general,operations and matials supplymanagement. The PEO has a taining coordinatorwho will be responsiblefor managingand coordinatingthe various elementsof the Institutional Strengteningand Training component. Staff from the ProjectSupervision Office (PSO) will be trained locallyand on-the-jobin supervisiontechniques (both high-gradeand reguar highwayconstruction); 57 staff persons(50 in supervisiontraining and 7 in environmentalprotection) will also be trainedin otherChinese institutions or in shortstudy toursabroad. 3.29 The policy-makingand sectormanagement capacities to be strengthenedat the XCD, as wellas the oversightand implementationand managementcapacities at the XHAB,will be closelycoordinated with strengtheningof capacitiesof the two principal technicalresearch and designinstitutes. The proposedproject would strengthentheir technicalcontrbution to the designand planningof all highways,especially high-grade ones. The componentsaddressing the needsof theseinstitutes will includethe following:

(a) Xinjiang HighwayPlanning, Survey and Design nstitute(XHPSDI). The Institutewas foundedin April 1961. It is the only comprehensive highwaysurvey and designunit in theXinjiang Uygur Autonomous Region (Chart4). With a staff of 402 (including150 speialized technicalcadres, 24 seniorengineers and 56 middlelevel technical cadres) the XHPSDIhas completedmore than 300 surveysin Xinjiang,including most of the large nationalhighway projects, large bridges and airport runways; it is curently chargedwith the designof TUDH. In anticipationof an increaseddemand in theprovision of surveysand designactivities in the sector,the proposed project'straining and spcializedequipment, would upgrade the competence of XHPSDI'sprofessional staff in the planningand designof highways, bridgesand trafficengineering. The XHPSDI'sgood curnt capacityin computer-aideddesign would be broadenedand deepenedto enableit to graduallybecome a designunit capableof undertalingmajor design work. (b) XlnJan Trfic Science istitute (XTSI). This Instituteis the sole research and developmentorganization in Xinjiangfor highwaytaffic analysis.It has a total staff of 110, including15 senior, 32 junior and 41 assistantengineers (Chart 5). The Instituteoperates with fundingfrom the XinjiangRegion's Scienceand Technology Committee, from the XCD, and fom contractwork for the MOC, and RegionalScience and Technology - 33 -

Committee.Additional funding is derived from motorvehicle testing, survey and design of new roads and bridges, test of new materials and paving technology. Under the project, both through training and the provision of equipment,XTSI capacitieswould be strengthenedin the use of materials for highway constructionand maintenance,traffic engineenng and traffic safety management. It would be called upon to undertake a study of intercityand nrual passengertransport, which forms a part of the proposed project.

3.30 Strengtheningof the capacityof XCD for maintenanceand constructionof highwaysis a pnority requirng an upgradedcapacity at the two technical traidng schools operating under the oversight of the XCD.4/ The elements of the component which address the needs of these schools aim to improve the quantity and quality of personnel availablefor highwaymaintenance and construction,including the maintenanceof highway equipment. Technicaland vocationaltraining experts under NorwegianTrust Funds have undertaken a detailed analysis of the capacities for these institutions to meet regional sectoral needs, and prepared detailedprograms for upgradingthe XCTWSand XCS. The recommendationsincluded in the consultants'report deal with possibleeconomies of scale in combiningoperations in the two schools,the developmentof short term courses in the critical areas of highwayand equipmentmaintenance and the training of trainers fromr,the two institutions.

(a) Xinjiang Communications Techlical Workers School (XCTWS). The role of this vocationalschool is to train qualifiedtechnical workers for the XCD institutions (Chart 7). Founded in 1953, the school started as a training center for vehicle operators and drivers. In 1984, its scope was broadened to repair and maintenance of highway construction and maintenanceequipment. In 1990, the program was expanded to include technicaltraining for highway constructionand maintenance. The School has a low capacityto train: only 1 group of 40 per specialty/yearcan be recruited from all over the Region. This translates into 440 students to graduate in 1993when the assessedneed is anticipatedto be over 700. (See Annex1 for a time series of the School's throughput). The shortfall is due to shortagesin the availabilityof technicallyexperienced teaching staff, in training equipmentand in operatingfunds. The school's class of 1993 has been trainedunder State scholarships(approximately 300) and under direct contract with governmentdepartments.

(b) X)jiang CommunicationsSchool (XCS). Establishedin 1982,the school is the sole polytechnicinstitution addressingtechnician level needs in the transportationsector (Chart 6). Its basic role is to train technical and b/ A iungcete at Shihiz is o involvedin vanous aspectsof cotnumg tning for staffof the XHAB. Stting in 1988,the ShihiziTaining Centerhas offered short courses(two to six months) at managil and workers' level. Informationon the taining outputof the Cewteris part of the PwojetFile. - 34 -

managementpersonnel in the fields of highway, automobile,planning and statistics,financial affairs and accountingfor the XCD and its subdivisions. The school also preparesfor pre-universityentry at Xian HighwayInstitute. Up to 1991, studentswere admittedon the basis of selectioncriteria; since that date the school recruits at the level of counties, and as a result there is a higher proportion of attendees from the 17 poorer counties in Xinjiang Region.

3.31 Public Security's Traffic Police General Teams (PSTP). Data on traffic police are containedin Annex 3 which deals with highwaysafety. Strengtheningof police teams is dealt with under the highway safety program (paras. 3.35-3.37) and consists of training of staff and purchaseof equipment. Two hundredeighty traffic police personnel (includingleaders) will participatein upgradingcourses in Xinjiangand seven higher level officers will conductinvestigations during overseasstudy tours to raise awarenessin public safety campaignmethods and traffic managementtechniques.

Highway Maintenance

3.32 Highwaysin Xinjiang are not well maintained. Only about 57 percent of the paved network maintainedby the HighwayAdministratien Bureau (HAB)is rated as good. This is due to:

(a) aging of the road network, most of which was not initia1lybuilt to a high standard;

(b) lack of qualitycontrol in maintenanceoperations;

(c) inadequate maintenance methods to produce repairs of high quality and sometimesinadequate technology especially for pavement surfacing;

(d) inadequatemaintenance equipment from both total number as well as types and standards, especially that about one third of the present equipmentof HAB is to be scrappeddue to old age; and

(e) insufficientfinancial resources.

3.33 To help address Xinjian. highwaymaintenance problem, XCD will carry out a highway maintenancestudy (incluied under the proposed project) to recommendan institutionalstructure for implementationand appropriatepolicies to ensure sustainability of investments (such as maintenance by contract); identify investments required to rehabilitatethe existingroad network to an acceptablelevel of serviceabilitytakdng budget constaints into consideration; and formulate and pnoritze a five-year highway maintenanceand improvementprogram so that a slice of it could be included in a future XinjiangII HighwayProject (Urumqi-Kuytun)proposed for financingby the Bank. Anne 2Zpresents the draft outline TOR for this study. The study would benefit from the recent introductionof the national pavementmanagement system developedby MOC. It would - 35 - be conductedin three stages. The first coverstraining of localstudy teams in HDM-l model methodologyand collectionof data; the second focuses on analysesof data, preparationand testingof alternativemaintenance interventions, and the third involves prepwarationof recommendationsand the final report. A Lead Group, comprising representativesfrom XCD and PEO/XHAB would ensure close liaison with MOC,provide guidanceon policyissues and the institutionalimplications of the recommendationsof the study,and provideguidance for the scopeand direction of the tiird stage,with a viewto expedientimplementation of the studyrecommendations. The studywould be conducted by XCD with assistancefrom MOC's HighwayScientific Research Institute and foreign consultantsto be financedunder the project. It wouldtake about 15 monthsto complete the study. Assuranceswere obtained at negotationsfrom XinjiangRegion that it would (a)undertake and, byDecember 31, 1995,complete the study on Xinjianghighway networc maintenancein accordancewith TOR satisfactory to the Bank, (b)establish a Lead Group conprisingrepresentatives of XCD and PEO/IXHBto administerthe said study and to providecomments on the resultsand recommendationsthereof; (c) by March31, 1996, furnishthe said studytogether with the commentsof the saidLead Groupto the Bankfor review;and (d) take appropriatesteps to implementthe said study's recommenidaons, takinginto accountthe commentsthereon of the Bankand the said Lead Group. 3.34 In additionto the study of highwaymaintenance mentioned above, the proposedproject contains the followingto improvehighway maintenance: (a) strengtheningof the CommunicationsSchool and the TechnicalWorkers Schoolwhich provide much of the skilledlabor requiredby maintenance operations.This is includedunder the institutional strengthening section of this report (paras.3.21-3.31); (b) strengtheningof quality control through the training of engineers for supervisionof worksincluded under TUDH (one hird of the traineeswill comefrom HAB) and the improvementof laboratoryfacilities. Advantage should be taken to learn from the quality control carried out during constructionof the proposedTUDH; (c) trainingof the staff in maintenancemanagement, management of materials andequipment fleets and improvedmaintenance methods. Thereis needto raise the awarenessof the importanceof good workmanshipand quality controlin maintenanceoperations; and (d) modeniizationof the maintenanceequipment fleet through purchase of key itemsunder the proposedproject.

Road SafetyProgram

3.35 Xinjiangmay not yet havethe crtical trafficvolumes required to develop and implementeffective road safetyprograms. However,the capital (Urumqi)and a number of major roads (such as TUDH and UKH) in the Regioncarry large traffic - 36- volumesand have taffic conditionsthat require actionsto be taken rapidly. Much can be done to improve the existing situation of large numbers of accidents resulting in many deaths and injuries. &nex 3 summarizesthe problems and presents an implementable road safetyprogram whichwas discussedand agreed with PEO, XCD and the traffic police team of the Public SecurityBureau.

3.36 The design of TUDH and the related linking roads was reviewed from a safety view point by the Canadian consultants and a Norwegian safety expert. Consequently, those designs have been prepared to a high standard and reflect safety considerationsadequately. The road safetyprogram included under the projectcomprises: (a) analyses of and research into traffic accidents, which involves training of traffic engineers and institutional strengtheningof the Traffic Science Institute through the provisionof 24 person-months(6 person-monthsa year for 4 years) of expertisein the area of accidentand safety research by a similarcompetent -search institute in China; (b) law enforcementwith emphasison speed and drunken driving which entails training of police officers ,and purchase of equipment; and (c) a pilot program on accident black spot ipovements in one prefecturewhich includestraining, technicalassistance and carrying out of physicalimprovements to high accident locations (black spots).

3.37 Based on the results of the pilot program for improvementof black spots, XCD would consider the utility of establishinga specialroad safety unit in the XHAB to take specific full-time responsibilityfor the regular identificationand improvementof accident black spots and to initiate and develop safety audit proceduresand other road sfety activities for applicationin the Region.

Intecity and Rural PassengerTransort Study

3.38 The proposed study would assist Xinjiang Region in reviewing and identfying the present and future problems of intercity and rural passenger transport subsector, and in organizing and providing the necessary new and urgently required provisionsand conrectivemeasures for improvementof the performanceof the subsectr in view of the market economicdevelopment in the Region. This study would be part of the provincial-basedstudies of highway sector issues, to be supportedby Bank highway prqjects as agreed betweenMOC and the Bank. The study would be expectedto be usefAl to other provinces since the economicframework of busing is relatively similar among provinces.

3.39 The study would include passenger transport: between cities and county towns, between county towns and their countryside,to other provincesand intenional transport. It would cover the followingareas: organizationof the industry; framework of economic, transportand technicalregulations under which the sector operates; existing and future demand for intercity and nrual bus transport; operationsincluding marketing, terminals, fl,et, maintenance,costs and pricing of services, competitionwithin the sector, legal and administrativecompetence and cost of the regulatoryagencies; and training. The study would be conductedin two stages, the first basicallyfor a diagnosisof the intercity passenger transportindustry and services and the second to prepare recommendationsfor - 37 - improvingtheir efficiencyand quality. A reviewpanel, comprising provincial and central governmentagencies and theBank would review the report on completionof the firststage and wouldprovide guidance for the scopeand directionof the secondstage. The review panel would also reviewthe stage 2 report with a view to fast implementationof the report's recommendations.The study, which would be conductedby the Xnjiang ScientificResearch Institute with assistance from foreign consultants to be financedunder the project,is expectedto last 15 months. Draft outlineterms of referencefor the study are shownin m&A. Assuranceswere obtained at negotiationsfrom XinjiangRegion that it would(a) undertake and, by June30, 1996,complete the studyin accordace th tenns of referencesatisfactory to the Bank; (b) establisha reviewpanel comprising representativesof the centralgovernment, the Bank andXinjiang Region to guidethe said studyandprovide comments on the resultsand recommendationsthereof; (c) by September 30, 1996, furnish the said study to the said reviewpanel for review; and (d) take appropiiatesteps to implementthe recom-mendationsof the study,taking into accountthe commentsthereon of the said reviewpanel.

D. ENVIRONMEAL ASSESSmENT

3.40 An EnvironmentalAssessment (EA) for TUDH and linking roads was prepared by the Eco-EnvironmentResearch Institute of the Chinese Academyof EinvironmentalScience in December1992 and submittedto the Bankin February1993. It identifiednoise, air pollution,water pollution, impacts on culturalrelics, etc., as major potental impacts. The alignmentwas modifiedto avi,d the ancienttown of Wulapo, whichhas archeologicalsignificance. Subsequentto the discussionbetween the Eco- EnvironmentResearch Institute and the Bank during the preappraisalmission in April 1993,additional studies on (a) migrationpatterns of Kazakhherders and other livestock migrationroutes, (b) detailedcultural relics survey, (c) impacts of constructiontaffic, and (d) socialsurvey of peopleaffected by resettlementor compensationfor land realocaton were conductedand the revisedEA was preparedon the basis of the resultsof these studies. The revisedEA, EA summaryand EnvironmentalAction Plan (EAP) were submittedin September1993 and werediscussed and furthermodified during the appaisal missionin November1993. The finalizedEA, EA Summaryand EAP werereceived by the Bankin January1994 and foundto be satisfactory.It has beenascertained that TuDH and its linkingroads would not affect ecologicallysensitive areas and, if appropriate actionsare taken, their constructionand operationshould have no significantadverse impacton the environment. 3.41 TheEAP specifies the measures, organizations, and monitoringargements requiredto mitigatepotential adverse impacts on the environmentduring the constructon and the operationof the highway.The main measuresrelate to noisecontrol, air quality includingdust, soilerosion and watermanagement, social disruption and interference with livestockmigration, selection and operationof borrowsites and quaries, taffic afety, culturalrelics and wastedisposal. The engineenngdesign and technicalspecifications for the highwayhave incorporatedthe appropriatemeasures required to be taken for environmentalprotection. Appropriateadministrative arrangements have been idenified to ensurethe enforcementof such measuresduring the constructiorand the opeatin of - 38 - the highway. Equipment for environmentalmonitoring would be provided under the project and will be procured early during implementationof the project. A summaryof the EA and EAP is presentedin Annex5. Copiesof the EA and EAP reports are available in the ProjectFile (Amex . Assuranceswere obtained at negotiationsfrom XCD that the envirownentalprotecdon measures stipulated in the EAP with respectto TUDHand linkingroads would be canied out in a mannersatisfactory to the Bank.

E. LAM AcQuisroN AN RESETLEmT

3.42 Regulations. The Land AdministrationLaw of Chinaand XinjiangRegional Land AdministrationRegulations are the legal basis for the planningand implementation of land acquisitionand resettlementfor all highwayprojects. The followingdocuments are also applied when land acquisitionis initiated.

(a) Preferential Policy on Land Acquisitionand Resettlementfor High-Grade HighwayConstruction in the XinjiangUygur AutonomousRegion (June 15, 1993); and

(b) Rules to Enforce'The ManagementRegulation of HouseRemoval in Cities' in the XinjiangUygur AutonomousRegion.

Land acquisitiin and resettlement are well regulated in China; procedures and compensation requirements generally conform to the Bank's policies on involuntary resettlement This has been confirmed in the June 8, 1993 report on involuntary resettlementin China (No. 11641-CHA).

3.43 TIpan-Urumqil-Dahuangshan Highway and Linking Roads. A ResettlementAction Plan (RAP) for TUDH and lining roads, includingan oudine for monitoringthe implementationof the plan was prepared by XCD and has been reviewed by Bank staff and was found to be generally satisfactory. Approximately1,520 persons are expectedto be affectedby the constructionof TUDH and linkingroads, of which about 1,022 (236 fimilies) will be affected by loss of residence,including those to be relocated because of noise pollution. A total of about 1,233 hectares will be acquired, including about 6.5 hectares of residential land and 110 hectares of agricultural land. All people affected by the constructionof TUDH and linking roads will be adequatelycompensated and resettled. The resettlement process will be administeredby the respective local governmentsat city/county, townshipand village levels, in accordancewith the terns of agreementssigned betweenPEO and the local governmentsinvolved. Those resettledwill be kept in productive employment either by assigning new land area or providing employment in close proximity to the presently held and or places of reidence. According to the RAP, all land acquisitionand resettlementactions are scheduled to be completedby the end of September 1994. A summaryof the RAP for the TUDH and linling roads is piesentedin Annex 6. A copy of the RAP is available in the Project File (Wnnex9). Assuranceswere obtained at negotiationsfrom XRGthat all land acquisiton andresettlment activities with respect to the TUDHand linkingroads would be completed accordingto the RAP in a mannersatisfactory to the Bank. - 39 -

3.44 Implementationand Monitoring. The implementationof the RAP for TUDHand lining roadswould be monitoredconcerning physical progress, disbursements and audits and socioeconomicimpacts. The administrativeframework for monitoring resetlement,idendfying the agencies responsible for eachaspect of monitoringis available in the projectfile. The administrativeframework also identifies two socialscientists who would contributean in

3.46 The costsof civil worksare basedon workquantities calculated from final engineeringdesigns except for the mountainoussection (28 kIn)where quantities are based on preliminaryengineering designs. The costs were computedon the basis of MOC's standardmanuals for laborand equipmentproductivity, the relatedannually updated costs and the currentmarket costs of materials. The unit rates were checkedagainst the unit pricesprovided in recentbids for similarhighway works executed under Bank financing. 3.47 The estimatedcost of equipmentis based on prevailingprices and those quotedby manufacturersand suppliersand includesthe cost of equipmentdelivered in Urumqi,spare parts, andrelated training if neededto operateand maintainthe equipment. The estimatedcost of consultingservices are basedon recentcontracts for similarservices underongoing highway projects, as wellas the actualcosts quoted by the consultingfirm that submittedthe winningproposal for the supervisionof constructionof TUDH and linkingroads. - 40 -

PROJECTCoST SUMMARY (January 1994 prices: $1.00 = Y 8.70)

Foreignt cost of Local Foreign Total Local Foreign Total total - (Y million) - - (S million) - (%)

TUDH and linkingroads /a 790.5 846.1 1,636.6 90.9 97.2 188.1 52 Road safetyblack spots - pilot popam 3.0 3.0 6.0 0.3 0.4 0.7 50 Subtotal 793.5 849.1 1,642.6 9.6 188.8 Supervisionof construction 36.7 35.9 72.6 4.2 4.1 8.3 49 EquiPment 41.7 96.4 138.1 4.8 11.1 15.9 70 Training 5.0 22.8 27.8 0.6 2.6 3.2 82 Tochnichl assitace/studies 5.5 3.7 9.2 0.7 0.4 1.1 40 TllotalBase CostM882.4 1Q007.9 1,890.3 101.5 115.8 ZL7.3 53 Physicalcontigency lb 83.0 88.5 171.5 9.5 10.2 19.7 52 Price coningcy 482.0 115.1 597.1 55.4 13.2 68.6 19 BaJe cost 'With contingencies 1.447.4 1.211.5 2658.9 166.4 13.2 I06 At

Landacquisition & resetlement 104.0 - 104.0 11.9 - 11.9 TotlllProiectt .551.4 1211.5 2.762.9 12L.2 139.2 it.7 4

Li Excludestaxes of Y 47 million ($5.4 million)as well as commitmentfees and izAereston Bank lam duing construction. &2Ten peret of TUDEIand linldngroads, road safety black spots and supvision of constuctio

G. FINANCING

3.48 The Bankloan of $150 millionwould finance about 47 percentof the total projectcost or 100pement of the foreignexchange cost and 6 percentof the localcost. TheCentral Government (MOC) would provide the equivalentof about$41 million,while the XinjiangUygur AutonomousRegion would provide the equivalentof about $126 millionto meet the remainingcosts of the project, includingcontingencies. MOC's fundingwould be restrcted to the constructionof TUDH. The Bankloan of $150million wouldbe onlent to the Regionon termsagreed between the Ministryof Financeand XlnjiangRegional Govemment for 20 years,including 5 yearsof grace, at 90 peroentof the rate payableto the Bankby the Borrowerwith 0.75 percentper annumcommitment fee on the outstandingbalance. Agreementwas reachedwith the Borrowerat negotaions that mwuldonkend the proceeds ofthe loan to theXnjang Regional Governmenton these tms. The XniiangRegional Government would bear the foreignexchange risks. The detailsof projectfinancing are shownin the followingtable. - 41 -

FINANCINGPLAN ($ million)

Xinjiang Cental Region Government Bank Total

TUDH - Civil works 36.6 41.4 99.5 177.5 TUDH - E&M supply & install 2.1 - 8.5 10.6 Roadwaysafety - black spots 0.3 - 0.4 0.7 Supervision 4.2 - 4.1 8.3 Equipment 4.8 - 11.1 15.9 Training 0.6 - 2.6 3.2 Studies- passengertansport & highway mantenance 0.7 - 0.4 1.1 Contingencies 64.9 - 23.4 88.3 Land acquisition& resettlement 11.9 - - 11.9

-m1ectTotal 126. 41A I5 0 I1. PercentLofTot 40 47 1QQ

H. IMPLEMENrAION

3.49 Iplementing Agencies.The implementationof the projectwould be the responsibilityof XinjiangCommunication Department. The PEO wouldbe theexecuting agencyfor the constructionof the TUDHand related lining roadsand their supevion as well as its relatedequipment and all other equipmentunder the projectexcept those destinedto the XinjiangHighway Administration Bureau. XHABwould be the extng agency for the pilot program of removalof accidentblack spots, study of highway maintenance,as wellas for the equipmentfor maintence of the highwaynetwork (othe thanTUDH). The PEO, theXCD Education and Science and Technology Divisions would be responsiblefor taining. Trainingprograms would be coordinatedwith thosein other ongoingBank-financed highway projects by MOC. Theexecuting agency for the intercity and rural passengertransport study would be the TrafficScience Insitute of XCD. Tbe TrafficPolice Team of the PubLicSecurity Bureau would be responsiblefor the safety component,except the pilot programfor removalof black spots. CMC Intemational TenderingCompany has beenretined by XCDas theprocurement agency for all aspects of civilworks of the projectrequiring international competitive bidding (ICB). CMCand the ChinaCommunications Import and ExportService Corporation (CIESCO) would be the procurementagents for equipmentto be procuredfrom abroad. The supevisionof constructionof the expresswaywould be carriedout by a joint foreign/localsupervision team. Uponcompletion, it is expectedthat TUDH would be operatedand maintined by - 42 -

the XHGHCA. SinceTUDH is a segmentof the nationalhighway system, MOC would also providegeneral supervision and guidancefor executionof the project. 3.50 TUDH and LinkingRoads. The implementationprogram for TUDHis shownin Annex7. All civil worksexcept for the two contractsections in the mountainous area wouldbe tenderedat the same time. The mountainoussections are expectedto be tenderedabout six monthslater becausetheir engineeringstudies are behindthe other sectionsby the sameamount of time. The trafficengineering contracts would be tendered aboutthe middleperiod of the civil worksfor TUDH. The invitationfor prequalification of contwactorsfor civil worksfor TUDH was issued in September1993 and the whole prequalificationprocess was finishedby April 1994.

3.51 The detaileddesigns and draft biddingdocuments for the nonmountainous sections(seven contract sections) were completedby the end of December1993. The correspondingdocuments for the mountainoussection (two contract sections) are expected to be completedby the end of August1994. Acquisitionof land and the resettlement processare exected to be ccmpleedby September1994. The installationof electrical, electonic and mechanicalsystems for the operationof TUDHis scheduledto commence aound the secondquart of 1997and be completedby the endof 1998. The construction of servicefacilities along TUDH would be a continuousprocess during the implementation period. The TUDHis expectedto be completedby the end of 1998.

3.52 SupervisIonof Constructionof TUDHand LinkingRoads. A teamof regional personnel, local engineersand techniciansrecruited from other provincial institutions,and foreignconsultants would be establishedto supervisethe constructionof the TUDHand theLinking Roads. Thejoint supervisionteam (JST) would be headedby a ChiefSupervision Engineer. A ResidentEngineer would be stationedon site for each of the nine civil works contracts. Terms of referencefor the consultantshave been finalizedand approvedby theBank. Invitationsto short-listedconsulting firms (approved by the Bank)for supervisionof constructionwere issued in September1993. A firmwas selectedin February1994, or about six monthsbefore the correspondingcontracts with contractorsfor civil worksfor the nonmountainoussections of TUDH. The consultants wouldbe mobilizedin August1994 to begintraining of localpersonnel in construction supervisionand helpset up the supervisionorganization.

3.53 Thing. Becauseof thelarge sizeand diversity of thetaining component, PEO has appoinieda full-timeInstitutional and TrainingCoordinator responsible for managingthe component.He wouldrelate to all organizationsin the sectorwith which the componentis concernedand wouldshare financial control over the resourcesaRlocated underthis component. Formal selection procedures for candidatesto be trainedhave been developedand agreedwith the Bank. Trainingabroad would be precededby training withinChina with the best performersselected for trainingabroad. Also, all traineesto be sent abroadwould have a good workingknowledge of Englishor else wouldtake a three-monthEnglish language course prior to travelingabroad. Each traineewould be requiredto submita reporton trainingreceived to his/herparent departmentor agency. Moreover,XCD has indicatedthat trainingto be providedunder the projectwould be - 43 -

related to career developmentand the professionalgrowth of the selectedstaff. At negodations,agreement was reachedthat X4R shall, by October31 of each year commencingin 1995,Jfrnish a rollingtwo-year training implementation schedule to the Bankand shall cany out thetraining under terms of referenceand in a mannersatisactory to the Bank.

3.54 Equipment. The responsibilityfor procurementof equipmentwould be divided between the two executingagencies. PEO would be responsiblefor the procurementof equipmentrelated to TUDH and the Traffic Police. XHAB would administerthe procurementof equipmentfor the maintenanceof the highwaynetwork (otherthan TUDH). The equipmentrequiued for laboratories,environmental monitoring, strengtheningof highwaynetwork maintenance and institutionalstrengthening would be procuredat an early stageof projectimplementation (1994/95), while that for the operation and maintenanceof TUDH is scheduledto be procured toward the end of TUDH construction(1998).

3.55 The projectas a wholeis scheduledto be completedby the end of 1999, withthe loanclosing date stipulated as December31, 2000. The implementationschedule for the projectis presentedin Annex7.

3.56 Operationsof TUDH. The Regionintends to operatethe newhighway as a toll acilityconsistent with its design. Tolls wouldbe collectedat nine points(Map IBRD25200), reflecting an open systemfor toll collection.To ensurethat the toRlrates wouldbe appropriatelystructured and that toll levels would not lead to a substantial reductionin thebenefits of highwayinvestment, the rationale for settingthe level of tolling wouldbe detenninedbased on the findingsof a studyto be undertakenby the Region, whichtakes into considerationlatest experience with operationof toll roads in Chinaas wellas similarstudies done under Bank-financed highway projects in China. Assurances wereobtained at negotiationsfiromXRG that XCD shall undertake, and byApril 30, 1998, complete and firnish to the Bank for its review and comments,an analysis and recommendaionforthe toll rateson TUDHtaking into considerationthe results of the ToU Rate Studyfor Xiamen-QuanzhouHighway caried out wnderthe FujianHighway Project (LoanNo. 3681-CHA)as wel as experiencewith tolls on majorroads in China. 3.57 Maintenanceof TUDH. TUDH will be operatedand maintainedby the xinjiang High-GradeHighway Admunistration Bureau (HGHAB)with headquartershi Urumqi. This bureau is expectedto establishfive maintenancecenters at Turpan, Dabancheng,Wulapo, Miquan and Fukang to maintainand operate TUDH. Construction of ihesecenters as well as their equipmentneeds are includedin the proposedproject. Followingthe institutionalstrengthening contained in the proposedproject, HGHABis ewpectdto be capableof properlyoperating and maintainingTUDH. - 44 -

I. PROCUREMENT

3.58 Procurementunder the project would be carried out as shown in the followingtable on the next page. The procurementarrangements for the projecthave takeninto accountthe experiencegained from previous Bank-financed highway projects. Thedocumentation, for procurement,which covers the prequalification of contractors,ICB and Local CompetitiveBidding (LCB) for civil works, ICB for goods and consultant servicescontracts has beenstandardized for Chineseconditions in coopeationbetween the Chinesegovemment and the Bank. Standarddocuments would be usedfor all relevant procurementprocesses under theproject. In particular,prequalification criteria for civil works under ICB procedureshave been tightenedand are now based on performance requirementspertinent to each of the contracts. Underprevious highway projects force accountwas acceptedby the Bankas a modeof implementationfor minorand scattered civil worlksin recognitionof the scarcityof constructionindustry units, particularly in the moreremote areas of the country. However,during recent years, a sufficientnumber of contractingunits becane capable of undertaldngroad improvement works through contracts awardedfollowing a competitivebidding process. Sincethe capacityof the contracting unitsis stilllimited, the provision of workopportunities for localconstruction units under the project wouldenhance further technical development and growthof the contating industry.

3.59 Works. The civil worksof TUDH wouldbe dividedinto nine contract sections(five for the Turpan-Urumqisection and four for the Urumqi-Dahuangsban section).Electromechanical works would be handledas onecontract. Adminiaon nd maintenancebuildings, service areas andtoll plazaswould be carriedout in severalsmall contracts. The linldngroads (six road sections)would be includedin the corresponding mainTUDH contract sections because of the smallsize of the worksinvolved. Contracts for mostcivil worls andfor theelectromechanical works for theTUDH (about 97 percent of total)would be procuredunder ICB. TherewiU be 10contracts (9 for civil worksand 1 for electromechanicalworks) in this categoryin the TUDH with an estimatedcost of $257 million. Contactswould be bid on a sliceand package basis; qualified firms would be allowedto bid for morethan one contractso as to attractinternational contractors and large Chinesecontractors. The contractsfor electromechanicalworks would be bid later duringthe constructionof the TUDH. All contractorsfor the nineICB contracts for civil works wouldbe prequalified. Domesticcontractors competing under ICB would be eligiblefor a ,.5 percentprice preference. Domesticcontractors are expectedto be competitivefor all contractsunder this project.

3.60 Other works, incluJIngsmall service facilities(toll plazas, maintenance depots,service and rest areas,administrative buildings, etc.), wouldbe awardedfollowing LCBprocedures acceptable to the Bank. Theseworks would involve contract estimated to costless than $2 millionper contract,up to an aggregateamount of about$11.4 million. Sincethese contracts are smallin valueand scatteredthroughout the Region and would be implementedover a four-yearperod, ICB would thereforebe neither justified nor practical,but foreignfirms wouldnot be precludedfrom bidding. The contacts for - 45 -

PROCUREMENTARRANGEMETS ($ million)

Total Procurementmethod project ICB LCB Other La NBF cost

Cil Works TUDH and LinkingRoads 242.8 11.4 - ^ 254.2 (113.3) (5.3) (118.6)

Road Safety: Black Spots - - 1.0 - 1.0 (0.4) (0.4)

TUDH- E&M SUDIn1and Instal 13.9 - - - 13.9 (10.4) (10.4) FWaU]Dmen 7.7 - 4.5 7.2 19.4 (7.7) (4-5) (12.2) DConstant;and Tining & Supevisionof Construction - - 12.0 - 12.0 (5.0) (5.0) Hihway MaintenanceStudy - - 1.0 - 1.0 (0.3) (0.3) PassengerTnsport Study - - 0.4 - 0.4 (0.2) (0.2)

Tmaining - - 3.7 - 3.7 (2.9) (2.9)

LandAcisition and Resettlement - - - 11.9 11.9 TI1 2AA 1. 211A 129 3Th1 (131.4) LI LI=. (150.Q)

NBF: Not Bank-Financed. Notes: (1) Figures in parenthesesrepresent the amountsfinanced by the Bank Group. (2) All figuresare roundedand includeestimated physical and price contingencies but excludethe cost of land acquisitionand resettlementwhich is shown as a separate component. la Other includesforce account,interational shoppingand limited internaonal bidding, and consulants and trining.. 1k Selectionof consultantsaccording to the Bank's Guidelines. - 46 - improvementof black spots(safety component) costing about $1.0 millionand involving worksscattered ftrough the Regionmay be implementedby force account.

3.61 Equipment.Generally, all contractsfor goodsand equipment costing more than $250,000equivalent would be awardedunder ICB. However,for equipmentwhere the numberof suppliersis small, limitedinternational bidding would be followed,in an aggregateamount not exceeding$2 million. All otheritems or groupsof itemscovering minor maintenanceequipment, laboratories, research and environmentalprotection puposes esat to costless than $250,000 per contractpackage, in an aggregateamount not exceeding$2.5 millionwould be procuredfollowing shopping procedures on the basis of a comparisonof prce quotationssolicited from at leastthree suppliers eligible under the BankGuidelines for Procurement.Domestic manufactures competing under ICB would be eigible for a marginof preferencein the comparisonof bids of 15 percentfor goods, or the prevailingcustom duties, whichever is lower. 3.62 Consultants. All consultantsrequired for constructionsupervision, staff trainingand studiesof highwaymaintenance and intercity rural passenger transport would be selectedand employedunder terms and conditionsacceptable to theBank in accordance withBank Guidelines on the Use of Consultants.Local expertise available in the various regional/provcial universitiesand institutesin the highwaysubsector would be used as muchas possible. 3.63 AdvanceContracting. XCDrequested advance contracting and retroactive fiancing in the followingareas: (a) Consultantsfor Supervisionof Constructionof TUDH. Thiswould allow trauiingof localsupervision staff and start-up of supervisionof construction of the TUDH by the time contractsare signed with contractors. The amountsubject to retoactivefinancing is estimatedat about$400,000. (b) Laboratory and Environmental Equipment and Vehicles for Joint Foreign/l,tal Supervision Team. So that effective supervison of constructionof TUDHand linldngroads can startas soonas possible,it is essentialthat the joint foreign/localsupervision team be providedwith laboratoryand environmentalequipment as wellas vehicles. The amount subjectto retroactivefinancing is estimatedat about$1.2 million.

(c) Conulans and Equipment for HighwayMaitenance Study. This wouldallow timely preparation of the highwaymaintenance progmm which is expectedto becomea part of the XinjiangII HighwayProject. This projectis beingconsidered for financingby the Bank. The amountsubject to retroactivefinancing is estimatedat about$200,000.

3.64 Agreementto the above three requests for advance contractingand retoactivefinancing is recommended,subject to XCDcompleting all Bankrequirenents, includingthose for procurement,environment and resettlement.The total amountsubject - 47 - to retoactivefinancing is estimatedat about$1.8 million. All of thisamount would apply to expendituresafter March 1, 1994.

3.65 Bank Review. All contractsfor civil works with an estimatedcost of $2 millionor more and all contractsfor goodswith an estimatedvalue of $250,000or more,and all consultants'contracts with an estimatedvalue of $100,000or more($50,000 in caseof individualconsultants) would be subjectto Bankprior review. This represents about95 percentof the estimatedtotal contractsby value. All other contractswould be subjectto ex-postreview. J. DsiURsEMEs 3.66 Disbursementof the loan wouldcover: (a) 56 percentof the total expendituresfor civil worksof TUDHand Linldng Roadsand the pilot programon improvementof accidentblack spots; (b) 80 percent of the total expendituresfor the supply and instaation of electricaland mechanicalequipment for the opeaon of the TUD1H; (c) 100 percentof foreignexpenditures for direcdy importedequipment or 100percent of local expenditure(ex-factory) for locally manutured equipmentand 75 percentof local expendituresfor other items procured locally;and

(d) 100percent of expendituresfor consultingservices and stafftraining. 3.67 To facilitatedisbursements, a SpecialAccount would be openedwith an authoized allocationof $10 millionequivalent, the estimatedaverage expenditurs for a four-monthperiod. The accountwould be openedin US dollarsin a bankacceptable to the Bank, and managedby the XinjiangRegional Finance Bureau. Applicationsfor replenishmentof the SpecialAccount would be submittedmonthly or wheneverthe Special Accountis drawn down to 50 percentof its initialdeposit, whichever comes first. A scheduleof esmated disbursementsis givenin Table 3.3, whichtakes into considation the projectdisbursement profile for transportprojects in Chinaand the potentdalrisks of delayin projectimplementation. 3.68 Disbursementswould be madeagainst authorized payment requet for work doneunder priced contracts for the civil worksand for the deliveryand installationof the eqipment. Interimcertification of civil workscompleted and costedat unit rates in the contac willbe preparedby thecontractors, reviewed by the supervisionteams/units and paymentsauthorized by PEO/HGHCAand HAB. Retroactivefinancing of up to $1.8 millionwould be appliedto expendituresmade after March1994 for consultantsfor svision of constructionof the TUDH and trainkngof local supervon staff ($0.4 million)for purchase of laboatoryand environmentalequipment as wellas vehicls for supervisionstaff ($1.2 million)and for consultantsfor praration of the highway - 48 - maintenancestudy ($0.2 million). Disbursementsfor staff trainingin China or abroad wouldbe madefrom the SpecialAccount against the actual costs of travel,subsistence and tuitionor trainingfees. For expendituresrelating to training,force account, contracts for worksand goods, eachvalued at $250,000equivalent or less, and contractsfoi services each valuedat $100,000equivalent or less for firmsand $50,000equivalent or less for individuals,reimbursement would be madeon the basis of Statementsof Expenditures (SOEs).Documentation supporting SOEs would be retainedby the implementingagencies and madeavailable for reviewby the Banksupervision missions.

K. AUDrNG 3.69 The ForeignInvestment Audit Bureau of the StateAuditing Administraion (SAA)would be responsiblefor auditingof projectexpenditures. Agreement was reached with the XWnng UygurAutonomous Regional Govermnent during negotiations that the project accoums and the Special Accounts, includingSOEs, would be auditd by independentadors acceptableto the Bank and that auditreports would be sent to the Bankfor review vithinsix monthsof the close of eachfiscal year. In the case of the SOEs,the auditreport wouldcontain a separateopinion by the auditorsas to whetherthe SOEssubmitted during the fiscalyear, togetherwith tie proceduresand internalcontrols involvedin their preparation,can be reliedupon to supportthe relatedwithdrawals. The BankGroup currently accepts SAA audits for thispurpose.

L. PROJEcTSuPEvSON, REPORTNGA MONMORIN G

3.70 The project wouldbe supervisedthrough Bank missionswhose frequency wouldbe guidedby the progressof the works. However,on the average,a missionat abouteight-month intervals would be mounted;a SupervisionMission Plan is presented in Annex8. In additionto fieldmissions, staff input wouldbe providedat headquar for project-relatedactivities such as completionof supervisionreports, procurement documentaionand contracts,staff trainingand equipmentproposals and follow-upand reviewof the studieson intercityand rural passengertransport and on maintenanceof highways.Moreover, the Bankwould monitor progress of implementationof all project componentsthrough quarterly progress reports to be submittedto the Bank. A copyof a quarterlyprogress report outline is arailablein the ProjectFile. It is esdmatedthat over the implementatonperiod of the projectthe totaltime expendedon supervisionwoud be in the orderof 80 person-weeks.A ProjectImplementation Completion Report would be preparedand submittedto the Banknot later thansix monthsafter the loanclosing date. - 49 -

4. ECONOMIC EVALUATION

4.1 The economic ar alysis focuses on the Turpan-Urumqi-Dahuangshan Highway componentof the project, which accountsfor about 90 percent of the project's base cost. Becauseof the relativelyshort length and correspondinglow constructioncost of the lining roads (16 km for six roads), no separate economicanalyses were conducted for these roads. Instead, they were includedin the analysesfor TUDH. The economic analyses were initially prepared by the Xinjiang Planning, Survey and Design Institute (XPSDI) and were reviewed and updated by the Bank staff in consultationwith XPSDI pasonnel during project preparation.

A. BEETs ANDBENEFICIARIES

4.2 The major quantifiablebenefits of the project would include (a) a decrease in taffic congestionalong the existng TUDH through the provisionof additional traffic capacityon a new alignment, and reduced traffic distances and journey times due to the more direct nature and higher design speeds of the new alignments;and (b) improvement in the condition and capacity of interconnecting highways to TUDH at several intsections/interchanges.

4.3 Benefitsfrom the projectwould accrue to road users in the form of tansport cost and time savings. Many road users are own-accountoperators for the producer enterpises and, mostly in the rural areas, a growing segmentof privatelyowned operators and farmers, who would capture the benefits of the project directly. Public freight and passenger services are also likcly to respond to increasedcompetition so that transport costs savings would be passed on to the users. At minimum, reduced operating costs would permit futureprice increasesto be held down. Passengerswould, in addition, enjoy the time savings offered by the project, and the greater riding comfort from better road surfaces.

4.4 The project is intended to encourage better highway management and maintenance through institutional strengtheningof various departments, institutes and training schools of XCD, the .tudy of highway maintenanceand the provision of modern maintenanceequipment. Implementationof the study of intercity and rural passenger transport should lead to better and more efficientpassenger services. The road safety program can be expectedto result in a reducednumber of accidentsdue to the supportit gives to the traffic police and due to the demonstrationeffect of the accident black spot pilot program. The project also is intended to strengthen public works procurement proceduresand to upgrade managementof the constructionentities. From these project components,substantial (but unquantified)benefits are expectedto accrue to infrastructure users through better planned and maintained highways with associated lower vehicle - 50 -

operatingcosts, and to the Region through more cost-effectiveuse of investmentfunds. The proper design of all highwaysincluded in the infrastructurecomponent of the project should reduce the number of accidents,and reducedcongestion on the existingroad along the TUDH corridor should improve conditionsfor local traffic, includingbicycles and agricultural vehicles.

B. T PAN-URUMQi-DAIIUANGsBE HGHWAY

4.5 The Existig Corridor. The Turpan-Urumqiand Urumqi-Dahuangshan corridors are two of the most developedin the Region and form a main part of the basic cross pattern of major highways centered on Urumqi, the capital of the Region with a population of about 1.3 million. They serve as the northern and eastern gateways to Urumqi. Moreover, the section of the highway from Urumqi to Turpan is a part of one of the 12 NTHS expressways. The municipalityof Urumqi and the prefecturesof Turpan and that this highway serves, accounted in 1990 for about 20 percent of the population, 18 percent of GVAIOand 40 percent of civilianvehicles for the whole Region. Also, the populationand GVAIO for these areas have been growingat a much faster rate han the Region as a whole. These areas also contain many touristic attractions and significantoilfields.

4.6 Roadsprovide the main meansof land transportbetween Turpan and Urumqi and between Urumqi and Fukang and areas to the east. The railroad in the TUDH corridor caters for very long distancebulk traffic and does not provide much service to the corridor. The existingTUDH has a total length of about 290 km (excludingthe 22.4-km connection within the city of Urumqi). The existing road is deficient from a traffic capacity, strength of pavementand geometricalstandards points of view (para. 3.7). The rapid economicdevelopment in the corridor has generatedsimilar growth in traffic and a noticeableincrease in traffic congestion,particularly along built-upsections of the existing road network. This is manifestin the decreasein average corridor travel speedsobserved in recent years. The expected further steady increase in road traffic has prompted the Region to pursue the constructionof the proposed TUDH to meet traffic demand along these important corridors.

4.7 Traffic on the Existing Road. Records from the Region's traffic counting program indicate a rapid growth in traffic throughoutthe 1980s and early 1990s, with annual growth rates for the most part between3 percent and 17 percent (Table 4.1). In 1992, traffic on the road varied between 1,500 and 11,000 medium truck equivalentper day dependingon the section, with the highest traffic volumesnear Urumqi.

4.8 The presenceof mixedtraffic, including slow-moving nonmotorized vehicles and relatively high traffic volumescompared to the capacity of the road result in traffic speeds of about 40 km/hr for motor vehicles, with urbanized sections presenting often substantialdelays. However, serious congestionis not yet a problem. Origin-destination (O-D) surveys were conductedin October 1991, covering 6 O-D stations and 27 zones. The survey was comprehensiveand provided a good basis for traffic allocation, in particular diversion from the existing road to the new highway, and for complementing - 51 - routinetraffic counts and vehiclecomposition carried out by XCD. The surveyrevealed that (a) medium-sizetrucks constitute about 53 percentof the total trafficon the existing TUDH; (b) traffic in the peak hour is about9.5-11.0 percent of averagedaily traffic; (c) averagenumber of passengersis 43 for big coachesand 11 for smallcoaches and 14 for both coachescombined; (d) averagetons carnied is about1.12 for smalltrucks/vans, 4.60 for medium-sizetrucks and 17.40for large trucksand 5.80 for all truckscombined; and (e) nighttraffic (12:00 midnight to 8:00 a.m.) is relativelylight. 4.9 Trafc Projections. Trafficprojections for theproposed new highway take into considerationdiversion of trafficfrom the existinghighway and generationof traffic through(a) releasingsuppressed demand by capacitylimits on the existinghighway especiallyin the sectionsclose to Urumqi,and (b) by the facilitationof economicgrowth. Diversionof traffic from the railway was neglectedbecause of its expected small magnitude.The economyin the project'sarea of influenceis expectedto growthat 11 percentper year between1992 and the year 2000, 8 percentper year during2000-2010 and 6 percentper yearafter 2010. Withrecent traffic growth on the existng road (Table 4.1) andexpected economic growth in thearea of influence,traffic is projectedto increase at the followingannual rates: 10.0percent between 1991 and 1998,8.0 percentbetween 1999and 2010 and 6.0 percentafter 2010. However,a ratherpessimistic and lower traffic growthscenaio was alsoanalyzed with annualrates of increasein trafficvolumes of 8-9 percentduring 1991-98, 5.5-7.5 percent during 1999-2010 and 4.6 percentduring 2011-18. 4.10 On the basis of the O-D survey,the diversionof trafficfrom the existing road was projected,taldng into accountthe capacityconstaints on the existingroad. It was estimatedthat about80 percentof vehicleswould be divertedto the new highwayin the first years of operation, takingadvantage of its improvedinterconnecting roads (under the project)and proximityof interchangeswith the existingroad. Trafficwould also be generatedby the improvementsbrought about by the new highway,at a level very conservativelyesfimated at about6 percentof normaltraffic. The projectedtraffic in the coridor and that remainingon the existingroad for both growthscenarios and for both caseswith and withouttolls on TUDHare presentedin Tables4.2 and4.3. Thesetraffic volumes,when compared with recenttraffic growth and economicindicators in the area of influenceof the project,can be viewedas realistic. 4.11 The Proposed New Highway. On the basis of the traffic forecasts summarizedin Tables4.2 and 4.3, TUDHis proposedto be builtto the standardof: (a) four-lanedivided highway with accesscontrol (Class I) betweenthe XinjiangFertlizer Plant and Urumqi,between Urumqi and TianchiRoad Junction and in the Baiyanggou mountainoussection, and (b) two-lanehighway (Class II) for the remainder.Agricultual tractorsand nonmotorizedtraffic would be excludedfrom TUDH (para 3.9). Altewnative routingsfor the followingsections were considered, evaluated and the bestalternative was incorporatedin the proposedTUDH.

(a) Balyanggou (Poplar Valley) Mountainous Sectlon (28 kIn). The exStiing road is on the northbank of the river. Altemativesconsidered conssted of locatingthe newroad on: (i) the north bank, (ii) the southbank and (iii) - 52 -

one half on the northbank and the other half on thesouth bank. Altemative (ii) was consideredthe best becauseit is relativelyless expensiveto construct,maintains traffic service during construction by usingthe existing road and is on theother bank away from the railroadwhich is scheduledfor double-trackingin the future. Also, three altemativeswere considered for the cross sectionin this section: (i) build four-laneClass I road from the beginning,(ii) build four-laneClass I road but paveone half of it initially with the other half to be pavedin the futureand (iii) build two-laneClass E highwayinitially and add anothertwo-lane Class I in the future. The secondalternative had thelowest rate of returnamong the threealtematives. Alternative1 was selected,although its economicinternal rate of returnwas slightlyless than that for alternative3 becauseof the great difficultyof constructingthe secondstage (river on oneside and a steepmountain on the other side);difficulty and expenseof maintainingtraffic service and related delays and high operatingcosts (not includedin the economicaiwlyses) sufferedby motoristsduring construction of the secondstage. (b) DabanhengSection (13 kn). Two alternativeswere considered and the new road was routedalong the southernedge of the GobiDesert to bypass the city of Dabancheng,avoiding 4 kn of marshlandsand another4 km of cultivatedland. Also, this optionhad the lower constructioncost and a higherrate of return. (c) ChaiwopoForest ReserveSection (10 kIn). Two alternativealignments wereconsidered and thenew roadwas routedalong the northernpart of the Gobi Desert, where topographicaland geologicalconditions are more favorableand to avoid passing through the Forest Reserve with many protectedplant species. (d) XhtIang FertilizerPlant-Urumqi (19 km). Two alternativeswere consideredand the new road was routed alongthe upper reachesof the Wulapowater reservoir to reduceor avoiddisruption of trafficservice by snow and to avoid disruption of utility lines (electricity and telecommunicationcables). (e) Zin4guanzi-Erdaogou(48 kn). Twoalternatives were considered for this sectionof theroad betweenUrumqi and Dahuangshan.The proposedroad aligment (southof therailway) was selectedbecause it is shorter,costs less and fits better with futureplans of FukangCity. (f) G_nquanpu-Urumnqi(35 kin). Sevenalternatives were considered and the proposedroad alignmentwas selectedbecause it involvesthe leastamounts of land acquisitionand resettlement,fits better with the plans of Urumqi municipality;provides a secondroute to Fukangwhich would help in case of disruptionof tffic on the existingroad; and uses the existingroad - 53 -

during constructionand as an auxiliary road afterwards. Also, it had the lowest constructioncost.

4.12 Economic Analysis. The economicanalysis was canied out separatelyfor each of the seven sectionsin which the road has been divided(four for Turpan-Urumqiand three for Urumqi-Dahuangshan).This is to take into account the different traffic levels, design standardsand constructioncosts in each and to carry out comparativeanalysis of various alternative cross sections in the mountainoussection. These sections are:

(a) Turpan-Urumqi

(i) Turpan-southernend of mountainoussection (66.4 Ian)

(ii) mountainoussection (28.0 km)

(in) northern end of mountainoussection to Fertilizer Plant (62.4 Ian)

(iv) Ferdlizer Plant-Urumqi(19.5 km)

0b) Dahuansn-Urumqi

(i) Dahuangshan-TianchiRoad (53.2 man)

(ii) Tianchi Road-Shangshahe(47.8 Im)

(iii) Shangshahe-Urumqi(6.0 km)

The economic analysis was prepared using January 1994 pries. Two traffic scenarios were assumed (mediumand low traffic volumes). Also, two toll options were analyzed: opeaton of the highway with tolls and without tolls. The economiccosts were derived from financialcosts by deductingtaxes and duties and price contingencies. No shadow price was appled to the constructioncosts because it is estimatedto be close to 1.0.

4.13 For costing purposes, the highway was assumed to be constructed in 4.5 years, opening to tffic in 1999. The economiclife of the highway was assumed to be 20 years (1999-2018). In addition to the cost of construction, the costs of periodic main (pavementoverlays) were taken into considerationin the 7th and 8th years (2006 and 2007) and the 14th and 15th years (2012 and 2013). Annual costs of routine highway maintenance and toll operations, for the with-toll scenario, have also been included. The residualvalue of each highwaysection in the year 2018 was assumed to be 50 percent of the initial constructioncost.

4.14 Benefitswere estimatedto accrue pnmarily from savingsin vehicleopeaing costsand travel time. Additionalquantifiable benefits arise from generatedtraffic, reduced congeston on the existingroad, and savingsin accidentcosts. Averageeconomic vehicle opating costs by vehicle class for the existing and proposed roads are shown in Table - 54 -

4.4. Thesecosts also reflectvariation in vehiclespeeds for the differenttypes of vehicles travelingon the existingroad and on the newhighway. Benefits due to time savingswere estimatedon thebasis of traveldistances, travel speeds, traffic volumes and valueof time (assumedat Y 1.00/passengerhour calculatedon the basis of annualincome for the Region,number of workersin the Regionand conservativelyassuming that 25 percentof passengersare travelingon work/businesspurposes). Traffic congestion was allowedfor by increasingvehicle operating costs at annualrates of 1.0-2.0percent until 1998, 1.5- 2.7 percentduring 1999-2009,2.0-3.3 percentduring 2006-2010, and 2.5-4.0 percent during2011-2018. The benefitsdue to reductionin trafficaccidents were conservatively calculatedby assumingthat accidentson the newroad wouldbe reducedby one accident per kldometerper year at a cost of Y 10,000per accident. 4.15 The economicevaluation summary and sensitivityanalyses for each of the four sectionsfor the Turpan-Urumqisegment, for each of the three sectionsfor the Dahuangshan-Urumqisegment, and the Highwayas a wholeare shownin Table 4.5 for the mediumtraffic growth scenario and in Table4.6 for the low trafficgrowth scenario. Tables4.5 and 4.6 also showthe economicinternal rates of return(EIRR) for both cases: withtolls and withouttolls. A full setof economicanalyses showing the annualcosts and benefitsand the EIRRs and sensitivityanalyses for eachsection of TUDHfor bothmedium and low trafficgrowth scenarios and with and withouttolls is availablein theproject file (AnnM2).For the mediumtraffic growth scenario, the EIRRis 19.3percent if tollsare appliedand 20.8 percentif no tolls are applied. The correspondingfigures for the low taffic scenarioare 16.8 percentif tolls are appliedand 18.3 percent if tolls are not applied. Assumingthat theprobability of the mediumtraffic forecast is 60 permentand the low trafficforecast is 40 percent,the expected ElRRs for eachsection of TUDHare shown below:

-~ ~ E-M With Wthu tolls tolls

Eas Section I Turpan-Southemnend of mountainoussection 20.1 22.1 _. Mountainoussection 10.2 11.9 3. Northernend of mountainoussection to FertilizerPlant 26.2 28.7 4. FerdlizerPlant-Urumqi 14.0 14.8 SubtoDtal(pan-Urumqi) i1. 8l, Northern Section 1. Dahuangshan-ianchiRoad 23.5 26.2 2. TianchiRoad-Shangshahe Interchange 19.0 20.0 3. ShangshaheInterchange-Urumqi 18.8 19.9 Subtotal(Oahuangshan-Urumqi) i aL IDI (rurpan-Urumqi-DahuangshanHighway) i1. .2 - 55 -

4.16 The lowestlevel of EIRR(10.2 percent with tolls and 11.9percent without tolls)was foundto be for the mountainoussection. All other sectionsas well as TUDH as a wholehave ElRRs that exceedthe opportunitycost of capitalin China(12 percent). A thoroughinvestigation of reasonablealternatives for the mountainoussection was conducted,and for the reasonsdiscussed in para. 4.11(a),it was decidedto acceptthe four-lanedevelopment for this section. It shouldbe recognized,however, that the estimatedEIRRs are on the low sidebecause the benefitsused in the economicanalyses do not include(a) benefitsattributed to reduction(or elimination)in disruptionsto traffic servicecaused by snow and flooding(XCD estimates that existingTUDH is closedto traffic the equivalentof aboutthree to five days a year becauseof snow and flooding primarilydue to its low designstandards); (b) benefitsdue to less cargodamage because of the high standardof the newroad, and it shouldbe pointedout that large amountsof fresh fruits and vegetables(perishable goods) move on this road, and the weather, especiallyin the summer,is harsh (hot)resulting in high rates of spoilage;(c) benefits generatedby the linkdngroads, bearing in mindthat their costis includedin the economic analyses;and (d) benefitsdue to addedcomfort and conveniencefor passengertransport. Also, generatedtraffic was conservativelyestimated at 6 percentof normaltraffic and a shadowprice of 0.95 was not appliedto the constructioncost of TUDH.

4.17 SensitiVityTests. The tabulationin para. 4.15 as well as Table 4.6 indicate that TUDHis viableeven if the low trafficgrowth scenario materializes (EIRR is 16.8 percentassuming toll operation).Under this low casescenario, sensitivity tests (assuming toll operations)indicate that TUDHwould remain viable if constructioncosts rose by 10 percentand benefitsdropped by the sameproportion, reducing the overallEIRR to 14.5 percent. Summariesof the sensitivitytests for both trafficscenarios and with andwithout tolls are presentedin Tables4.5 and 4.6. Benefitsattributed to TUDHwould have to be reducedby 50 percentfor everyyear of its economiclife (1999-2018)before the EIRR for TUDHdrops below 12 percent. This is unlikelyto happen.

4.18 One of the risks facingTUDH is delayin implementationof the 22.4-kn connectionwithin the city of Urumqi.This connectionis not a part of TUDHbut, ideally, shouldbe completedat aboutthe sametime as TUDHin order for the projectto achieve its ful benefits,avoid major congestionwithin Urumqi,and preservehighway system continuity. This connectionis includedin the city plan for Urumqiand is vital to the socioeconomicdevelopment of Urumqi;presently it is heavilycongested especally in the downtownarea wheredaily trafficin 1993reached 37,000 medium-truck equivalents. Delayingthe improvementof this connectionby three yearswould lead to a reductionin the BLRRsfor TUDHby about1 percent. The city of Urumqi(which is resonsible for tis secon of the road)is committedto the constructionof a newconnecdon but doesnot yet havethe requiredfinancial resources. The feasibilitystudy of the connectionis under way and is expectedto be completedby the end of August1994. XCD and SPC are assistingthe city in trying to arrange financingfor the connection. Shoulda suitable financier(s)not matialize, considerationshould be given to includingthis connection under the proposedXinjiang II HighwayProject (Urumqi-Kuytun Highway). - 56-

. OJECrRISKS

4.19 Based on experiencewith ongoing highwayprojects, another risk is implementationdelay and constructionquality, particularly for the highwaycomponent. Becauseof the difficulttopography, restricted working areas and large amountsof rock excavationin the mountainoussection of the road fromUrumqi to Turpan,there are risks in thetimely completion of thehighway. Also, since XCD is a first-timeexecuting agency for a Bank-financedproject, there are alsorisks to constructionquality and smoothproject implementation.However, project preparation has benefited significantly from. the Bank's previousexperience in similar highwayprojects in China, as well as from the active involvementof MOC. Also, the relativelylarge valueof contractsfor constructionof TUDH would attract qualifiedforeign contractors and large Chinesecontractors which wouldensure successfulcompletion of TUDHwith little or no delays. Moreover,the carefulformulation of supemvsionarrangements, including engagement of foreignexperts and training of local supervisionstaff, should help ensure regular monitonngof implementationand effectivequality control.

4.20 In viewof the unevencommitment typical of someimplementing agencies t trainingand technical assistance, there is an elementof risk in the successfulcompletion of thesecomponents. To reducethese risks a full-timequalified institutional and training coordinatorwas designatedby PEO. The coordinatoris assistedby two qualifiedstaff membersfrom the Scienceand TechnologyDepartment and the EducationDepartment (responsiblefor training)of XCD. The trainingprograms are welldeveloped and foreign experts have helped develop the institutionalstrengthening program for two of the initutes. Furthermore,PEO has already submitted a detailedimplementation program for the first two yearsof thesecomponents, which the Bankfound to be acceptable. - 57-

5. AGREEIENTS REACHEDAND RECOMMENDATION

5.1 Agreementwas reachedwith the CentralGovernment at negotiationsthat it wouldonlend the proceedsof the loan to XinjiangUygur AutonomousRegion on the followingtms: 20 years, including5 yearsof grace, at a rate equivalentto 90 percent of therate payableto the Bankby theBorrower with 0.75 percentper annumcommitment fee on the outstandingbalance (para. 3.48). 5.2 Duringnegotiations, assurances were obtained from Xinjiang Region that: (a) XARshall fumish, or causeto be furnished,to theBank.: (i) promptlyupon theirpreparation plans, studies, specifications, construction and procurement schedulesand such other documents evidencing the construction of the22.4- km connectionbetween Turpan-Urumqi and Uru.nqi-Dahuangshan segments of TUDH;and (ii) any recordsand reportsin respectof or relaftingto this connectionas maybe reasonablyrequested by the Bank(para. 3.12); (b) XCDwould (i) undertakeand, by December31, 1995,complete the study on Xinjiang highway network maintenmce in accordance with tems of referencesatisfactory to the Bank;(ii) establisha Lead Groupcomprising pesentativesof XCDand PEO/XCDto administerthe said studyand to providecomments on the results and recommendationsthereof; (iii) by March31, 1996,furnish the said studytogether with the commentsof the saidLead Groupto theBank for review;and (iv)take appropriate steps to implementthe said study's recommendations,takdng into account the commentsthereon of the Bankand the saidLead Group(para. 3.33); (c) XCD would(i) undertakeand, by June 30, 1996,complete the studyon Xinjiangintercity and ruralpassenger transport in accordancewith termsof referencesatisfactory to the Bank;(ii) establisha reviewpanel comprising rresentatives of thecentral government, the Bank and XinjiangRegion to guide the said study and provide comments on the results and rcommendationsthereof; (iii) by September30, 1996, furnish the said study to the said panel for review; and (iv) take appropriatesteps to implementthe recommendationsof the said study, takdnginto accountthe commentsthereon of the saidreview panel (pama. 3.39); (d) the environmentalprotection measures stipulated in the EAP, withrespect to Turpan-Urumqi-DahuangshanHighway and linkng roads, would be carriedout in a mannersatisfactory to the Bank(3.41); - 58 -

(e) all land acquisitionand resettlementactivities with respect to the TUDHan.. linkng roads would be completed according to the RAP in a m.- satisfactoryto the Bank (para. 3.43);

(f) the monitoring of the effectiveness and socioeconiomicimpact of the resettlementprocess for Turpan-Urumqi-DahuangshanHighway and linking roads would be carried out accordingto the monitoringplan in a manner satisfactoryto the Bank (para. 3.44);

(g) XAR shall, by October 31 of each year commencingin 1995, furnish the rolling two-yea traiiing implementationsched-le to the Bank and shall carry out the trainingunder terms of referenceand in a manner satisfactory to the Bank (para. 3.53);

(h) XCD shall undertakeand, by April 30, 1998, complete and furnish to the Bank for its review and comments,an analysis and recommendationfor the toll rates on TUDH, taking into considerationthe results of the Toll Rate Studyfor Xiamen-QuanzhouHighway carried out under the FujianHighway Project (Loan No. 3681-CHA)as well as experience with tolls on major roads in China (para. 3.56); and

(J) the project accounts and -ie Special Accounts,including SOEs, would be auditedby independentauditors acceptable to the Bankand that audit reports would be sent to the Bank for review within six monthsof the close of each fiscal year (pam. 3.69).

5.3 Approvalof the Loan Agreementby the Borrower's State Councilwould be a conditionof loan effectiveness.

5.4 Subjectto the foregoing, the proposedproject would be suitablefor a Bank loan of $150 millionto the People's Republicof China. The loan would be for a term of 20 years, includinga grace period of 5 years, at the Bank's standardvariable interest rate. - 59 -

Table1.1: RoADACCIDENT RiSKS IN VARIOUSCouNTRIES, 1990

Vehicles Fatalities Faalties Numberof per 1,000 Numberof per 10,000 per 100,000 Contury Population vehicles population fatalities vehicles population ('000) /a ('000) (persons)

CHINA 1,133,700 5,514 5 48,271 87.5 4.3

Xbijian (19922Zb 17,000 166 10 1,364 82 8.0

Brazl 150,400 16,606 110 5,255 3.2 3.5 Canads 26,500 16,270 613 3,889 2.3 14.7 Denmark (1982) /b 5,117 1,638 320 669 4.1 13.1 France 56,400 27,162 481 10,289 3.8 18.2 Germany 79,500 32,304 406 7,995 2.5 10.1 EuWngy 10,600 2,164 204 2,162 10.0 20.4 India 849,500 3,070 4 49,690 161.9 5.8 Japan 123,500 57,702 467 11,227 2.0 9.1 Norway (1982)Ak 4,124 1,536 373 409 2.7 9.9 Poland 38,200 6,398 167 7,333 11.5 19.2 Spain 39,000 14,396 369 6,987 4.9 17.9 Tanzaiua(1985) lb 22,0O0 151 7 1,071 71.0 4.1 Turkey 56,100 2,360 42 6,286 26.6 11.2 UK 57,400 23,896 416 5,373 2.2 9.4 USA 250,000 193,042 772 45,555 2.4 18.2

IL Wodd DevelopmentReport, 1992, pp. 218 and 219, except countrieswith "lb.j Reprt on Road SafetyComponent by World BankPreappaisal Mission,July 1993.

Soures itntational Road Federation;World Road Statistics, 1991, as to accidentsand road vehicles. China: Saistical Yearbookof China, 1992and AutomotiveIndustry Satistical Yearbook,1991. Canada: Tnsport Canada;Commercial Vehicle Safety in Canada. Japan Trnsport EconomyStatistics Handbook, 1992. USA: DOT; NationalTunportaticn Statistics,Annual Report, June 1992. France, Germany, Spain, Turkey and UK: United NationsEconomic Commissions for Europe; AnnualBulletin of TransportStatistics for Europe, 1992. Tahh 21s: XzNuiwa: fuUHTw A* PAsUNGuR TRUnc, 19WM92

A. FrIW* TmafH

Year TomstanaDolted Tons-kioMetoms Avcraaebund distance a Railways Highways Civil Pipeline Tota Railways Highways CMvI Pipeline Toal Railways Highways Cihl Ppeline aviaioa aviation aviation (Inuu- (milo) (K w)

1980 8.84 72.09 0 3.29 84.22 6,727 4,S89 1 796 12,113 760 64 909 242 1985 12.78 88.47 0 SS6 106.81 10,202 6,125 1 1,145 17,473 798 69 945 206 1989 16.44 126.5S 0.01 S.99 148.99 13,267 11,690 2 1,373 26,332 806 92 2,397 229 1990 16.90 11S.S1 0.01 6.77 139.19 14,116 10.809 2 1,284 26,211 8S 94 2,354 190 1991 17.63 145.37 0.01 6.87 169.88 16,334 12,907 2 1.2S4 30,497 926 89 2,353 183 1992 18.90 133.90 0.01 7.61 160.42 17,348 12,192 3 1,328 30,871 918 91 2,419 17S

(S) (1980-92) 6.5 S3 41.31 7.2 SS 8.2 8 62.8& 4.4 8.1

B. Pas_ge Traffic

Year Passenems Pssenmer-kiloMet_rs Averacetravel distance /b Railways Highways Cvil Total Railways Highways Civil Total Railways Highways Civil aviation av;ation aviation (million) (million) (kilometers)

1980 1.93 11.52 0.10 13.55 1,883 1,082 83 3,048 976 94 830 1985 3.20 33.99 0.09 37.28 3,31S 2,913 87 6,31S 1,036 86 969 1989 4.53 82.40 0.47 87.40 4,4S2 6,637 980 12,069 983 81 2,086 1990 3.88 91.61 0.53 96.02 3,796 S,Sl1 1,087 10,394 978 60 2,025 1991 3.83 141.42 0.57 14S.82 4,194 6,80S 1,209 12,208 1,095 48 2,121 1992 4.25 144.90 0.82 149.97 4,448 7,538 1,838 13,824 1,047 52 2,241

Aanul 8- (X) (1980-9 6.8 23.5 37.1f 22.2 7.4 17.6 S4.6/c 13.4 - - la Aveesp haul Adistan ftensp~oed. Avv 1bdiedi - -q a re. AnA a powd (S) duhng 198-92.

S :atss-Xblng Statlal Yeaaboo, 1991,p. 330. Xbii" omoeao ~Da_tu - 61 -

Table 2.2: XvNJIANG:RoAD NETWORK, 992

Classification Total Percent- I I m IV Sub- (kmn) age of standard total

By Admtsraion

National 28 2,922 3,195 1,472 1,086 8,703 33.4 (0) (2,853) (2,817) (1,490) (1,543) (8,703) (39.4)

Provincial 0 621 2,045 2,028 1,313 6,007 23.1 (0) (379) (1,274) (1,952) (2,062) (5,667) (25.7)

County 0 99 1,101 6,107 1,724 9,031 34.7 (0) (13) (55) (1,094) (4,861) (6,023) (27.3)

Township 0 0 38 186 0 224 0.9 (0) n/a n/a n/a n/a n/a n/a

Other 0 52 281 1,335 391 2,059 7.9 (0) (52) (239) (819) (580) (1,690) (7.6)

ltk 2a1 3.694 6.6 11,128 4,514 26.024 10. Q(. (f322 f4,3851 (5.355) (2.4M (22.083) (100.Q)

Percentage of total 0.1 14.2 25.6 42.8 17.3 100.0 (0) (14.9) (19.9) (24.2) (41.0) (100.0)

Note: Numbersin (x) show the data in 1983.

Source: XinjiangCommunications Department. Table 2.3: XNjIANG: IENGTHOF HIGHwAYBY TRAFFIC MIx ANDADTJVL NATioNAL AND PtOVDINCIL RoADS ONLY

Yewr Mixed btffic 1nkm) Motor vich traffic ondl (km) Total ADT ADT ADT ADT ADT ADT AD ADT ADT ADT observed > 10000 5001- 2001- 301- <300 > 10000 S00X- 2001- 301- <300 length 10000 5000 2000 10000 5000 2000

1985 12,349 - 342 1,420 6,587 621 - 86 963 5,698 5,602

1986 12,103 - 155 2,098 5,961 3,889 - 77 1,616 6,159 4,251

1987 12,215 - 213 1,359 8,847 1,934 - 140 687 8,026 3,182

1988 12,210 - 140 1,397 7,941 2,732 - 130 764 7,043 4,173

1989 12,840 - 258 1,144 8,577 2,861 - 56 800 6,486 4,328

1990 14,325 7 280 1,239 7,506 5,293 7 106 876 5,861 7,475

1991 13,820 - 328 1,894 6,853 4,745 7 160 1,252 6,446 5,955

1992 13,669 14 350 1,337 7,043 4,925 14 414 1,966 7,214 4,061

/a ADT - AverageDaily Traffic (both directions),expressA in mediumvehicles per day.

Sourc: XinjiangHighway Admidnistion Bureau. Table 2.4: XDUJUMihG:VIMCLUE LuEzr, 1986592

snail Trucks Other LAWge Medium Buses buses & for vehicis truks & mall (>25 sets) passenger specal for spe- Specific Sub- Wheel Motor- Other Lf Totd Year (>7 tons) tucks cars use /a cial use l2 vehiclesLe total bctors cycles vehicles

2,121 197,901 1985 60,977 3,312 4,752 11,727 n/a n/a 7,467 88,235 83,578 23,967 3,730 142,130 1986 62,992 6,468 5,173 15,168 n/a n/a 6,332 96,133 12,190 30,077 1,307 246,053 1987 60,293 10,325 4,975 18,218 6,363 2,218 1,763 104,155 107,658 32,933 2,797 276,257 1988 60,372 14,844 6,144 19,897 7,216 4,036 1,831 114,340 115,974 43,146 4,036 297,809 1989 61,475 17,776 6,735 22,294 7,246 4,365 2,149 122,040 116,277 55,456 3,578 330,850 1990 62,798 19,536 7,225 25,280 8,093 4,886 2,279 130,097 133,588 63,587 4,380 401,630 1991 67,678 22,293 7,776 30,434 9,419 5,365 2,469 145,434 177,967 73,849 7,149 452,949 1992 73,964 26,945 8,607 36,093 11,676 6,164 2,734 166,183 192,270 87,347

growth Annul 12.6 (%) (1985-92)2.8 34.9 8.9 17.4 12.8ff 11.11e 10.5L 9.5 12.6 20.3 19.0

LA ncudes dump trucks, oil-ankers, refrigeratedtucks and cementtankers. b Includeswater bowse, workshopcars, post deliveryca, veteinay ca, cas for epidenic prevenion and truck cranes. l Includesfire bucks, ambulancs, wmckensand sentry bucks. d Incudes electic ca and agicultul bansportvehicles. Q Annualgrowth rate during1988-92

Scume TUDH Priject Feasblity Study Report, Xnjuig HighwayPlaning, Surveyand Design isttute September1992. - 64 -

Table 2.5: 1NJIANGINmmRCrTY AND RuRAL BUs FL, 1992

Passenger trans- Passenger Ownership por piiay vehicles Vehic ONyz Total # Units % Units % Bus Van of seats

Stat-owned co. 188 7.47 3,192 57.7 3,142 50 149,564

Collectiveco. 172 6.83 172 3.2 162 10 6,328

Private co. 2,161 85.7 2,161 39.1 2,132 29 69,307

law 2.521 109.0,.25 I1 0. 12 225,199

Note: (1) A bus has more than 20 seats, a van has less than 20 seats. (2) All the data in the above table are as of the end of Dec. 1992. (3) Numbers of buses do not include buses used for intracity transport or buses used for own-accounttransport.

Source: XinjiangTraffic ScienceInstitute, April 1993. Tabl. 2.6: XNuAuN F: Grr }IANDm BY PuBlIc ANDPRIVATS TRUCKS, 1985-92

Annual tona= (miJin) Annual ton-hn (millio@, AvyrgM bauil afdisanc k Public Private Total Public Private Total Public Private Toa Year trucks trucks trucks trucks trucks trucks La Lb La Lb LA Lb

1985 8.76 - 8.76 612 - 612 70.0 - 70.0 (100.00) (100.00)

1986 8.35 - 8.35 669 - 669 80.1 - 80.1 (100.00) (100.00) 1987 8.48 0.56 9.04 679 45 724 80.0 80.4 80.1 (90.2) (9.8) (93.8) (6.2) 1988 8.63 0.99 9.62 720 97 817 83.4 98.0 84.9 (90.0) (10.0) (88.1) (11.9) 1989 8.40 4.25 12.65 791 378 1,169 94.1 88.9 92.4 (66.4) (33.6) (67.7) (32.3) 1990 9.28 2.27 11.55 824 256 1,080 88.8 112.8 93.5 (80.3) (19.7) (76.3) (23.7) 1991 12.36 2.23 14.59 1,241 50 1,291 100.4 22.4 88.5 (84.7) (15.3) (96.1) (3.9) 1992 10.66 2.73 13.39 1,049 170 1,219 98.4 62.3 91.1 (79.6) (20.4) (86.0) (14.0) a Public carrier, including all government transport sectors and collective enterprises. Public carrier, private ownership. Numbers in "(x)' show the percentage of the total. Source: Xinjiang Annual Statistics on Transportation and Communication. - 66 -

Table 2.7: XuNJIANG:RoAD ACCIDENT (1985-92)

Number of Number of Number of Year accidents fatalities persons injured

1985 5,174 942 2,820

1986 5,799 1,183 2,868

1987 5,989 1,130 3,201

1988 7,050 1,384 3,536

1989 5,546 1,233 2,766

1990 5,160 1,193 2,602

1991 5,280 1,292 2,646

1992 4,077 1,364 2,268

Source: Xinjiang Communications Department. Table 2.St CXmt HIGHWAY REVEM ANDE nDI (Y mio

19S6 1987 19SS 1919 1990 1991 1992 1993 1994 1995 1996 1997 199S 1999

Rweo 1. Mfla ce fee 321.11 341.37 354.54 450.66 S60.16 650.49 660.90 61I.41 767.5 S26.41 1A90.64 959.88 1,034.67 1,115.26 of wAlI AMmohrwd by XCD for c I.and 289.46 30S.46 321.30 415.02 522.46 609.85 620.00 640.00 723.60 781.37 844.00 911.51 984.43 1,063.00

2. Tollafrmivhgh-pdel ghyba A. -- . . - - 68.11 3. -nts frm MO 39.50 42.50 43.60 53.80 47.00 54.85 110.90 117.10 150.00 300.00 350.00 350.00 350.00 150.00 of hick TUDH . . . - 70.00 74.00 76.00 71.00 62.00 UKH - - - - - . 190.00 222.00 240.00 198.00 100.00 4. O*m frmtbeRrglina 22.00 23.00 20.00 8.00 9.60 8.50 - 2.50 2.50 3.00 3.00 3.00 3.00 3.00 5. Odu hb 2.64 3.20 6.42 4.98 2.90 1.73 s.00 3.55 150.00 170.00 190.00 210.00 230.00 250.00 6. Exemal bowig - - - 100.80 317.23 649.36 656.55 564.56 321.50 of wbilch TUDH - - . - - 100.80 163.30 246.04 210.30 149.56 UKH ' ' ' ' ' ' - 153.93 403.32 446.25 415.00 321.50 T°a L!3S.02 410.07 424.5 517.44 620.36 715.57 776.80 804.56 1.170.45 1.616.64 2.083.00 2.179.43 2,182.23 1.907.S7

1. Tt nfeu to Eny and C m F m d 15.00 15.00 15.00 15.00 15.00 15.00 150 15.00 150 15.00 15.00 15.00 15.00 15.00

2. Tefen toDBudget AdjmeFund 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

3. PA&bliSecuyriy Bureau ireguoumoexpa. 7.42 7.91 8.24 10.64 13.40 15.64 15.90 16.41 18.55 20.04 21.64 23.37 25.24 27.26

4. Mainta nd coestucto 279.37 298.82 308.82 395.41 491.10 579.51 635.86 652.65 1,009A 1,446.69 1,903.56 1,9197 1,981.87 1.636.12 (a) Routne maintnce 49.00 53.63 53.69 54.52 68.34 70.06 38.01 94.46 101.65 108.77 116.38 124.52 133.24 152.79 (b) Periic maintensace 16.00 26.10 21.37 39.54 54.06 S8.26 62.99 89.94 9s.63 108.13 119.71 131.68 138.27 149.04 (c) R P*bbiltaionred ne onatuuctiw 111.92 146.23 153.76 226.71 283.55 340.52 372.51 34S.1S 636.70 991.06 1.470.88 1.519.55 1,472.41 1,125.29 ofwhich: New cotruct - - - - . 546.70 900.43 1.410.38 1,454.25 1,402.61 1,042.53 (i) TUDH ...... 492.94 387.65 506.s0 474.42 431.19 (it) UKH * - - - - 454.54 893.58 969.03 952.92 1,029.93 (d) Subidy of oty ad vlme road 34.60 35.41 36.35 37.62 39.00 41.95 41.02 SO.So 79.80 105.00 100.00 113.00 120.00 131.00 (e) EAnergencyand natual diastza46.25 14.02 18.55 11.09 19.74 38.43 59.S3 14.50 24.00 27.00 20.00 21.00 24.00 20.00 (f) O_e 21.60 23.43 23.10 2S.93 26.41 30.29 54.80 55.10 68.63 99.03 76.59 80.12U.95 58.00 5. AdMWaod- exp /f 48.20 50.01 52.20 54.29 56.46 58.72 61.07 70.30 74.87 79.74 14.92 90.44 96.32 102.58 6. Othe e /d 26.03 21.33 30.30 32.10 34.40 36.70 38.97 40.20 42.62 45.17 47.88 50.75 53.80 57.03 7. Rqe$yma*of loan* * - * * * * * - - - 59.a8 Low 3U6.2 410 07 424 56 517.4 620.36 7157 776.0 0456 117045 1,616.64 2.083.00 2.179.43 2.182.23 L.907.

& Othr ovma _coeit of: (a) fnrd ualin from c_ntato of privt mua b XCD nul) to mao Ialic g_rtr, (b) fees e fregt t becoflectd sCtn in 1994 at th tate of Y O.O*l_e.lo d laaqctad to geneaemot tian Y 120bilai 1994. sal (c) proetyaeps wi rhelct bacse bn landlprie becainseofc_mnco of highwa to be collata slaing Ia1995 cad is esatd to =e Y 30-40 omiinoii 1995. g ml id psesicldexpenses for aiiham nd _af bucnof afcilay wos, b obyd_vecnt. sciklic n dd , -hisit o trfflic vo a sd d ce dwuve. owslmiof huing for sff cuct m qu , epm ent d im sd _emmtof rod ma_ nce fes. Ohe epe incde -pae for. s ity, d pa_onn, sola for npbyee' d , t sriane, afty ad ptblic reins

S m X%*Esg C_omimS Dq,bmt Nmber IM9. - 68 -

Table 2.9: XINIc: FUELPRICEs (Yuanper liter)

Before Seotember 10. 1986 AfterSefptember 10. 1986 Cufent - May 1993 Int Plned Negoti. Market Planned Negoti- Market Planned Negoti- Maue naioa la aUed/b L atedl /a atedSk picealff

Gulie(70 0ct)c 0.56 - 0.92 0.80 1.11 2.10 0.87 index 100 . 164 143 - 198 - 375 -

Gauoline(90 ot) C 0.59 - 0.82 - 1.26 - 2.20 0.99& index 100 - - 138 - 213 - - 373

Disel il 0.43 - 0.80 0.65 - 1.08 - - 1.42 0.82 Index 100 - 187 151 - 250 - - 330

Cona rpuicWindele 100 107 - 162

Ia p.md allocoR prices. & Negotiatedabove quota. j Pies of gasolinechude a aggregateof 43 percen centralgovernment fuel taxes. id Pricesof diesel includea 13 percengcentrl governmentfuel taxes. Cosr pdce index at eNdof year 1985, 1986and 1990,respectively. L Averagewholealeprcaforregularl/preiumunleadedgasolincand No. 2 diceslfuel, FOBrefineries, pipelinetwinals and inlan waterwy bage tamials (July 1, 1993,Neow Jersey). 1 PAceis for 80 octae.

Soure Xhiamg Hi} way Adminition Bureau; PNa's Oilgam MiceReport, McGraw-Hill wnc.,NY, NY, USA, Val. 71, No. 128, p. 5. - 69 -

Table 2:10a: PLANNEHIGHWAY DEVELOPMENT iN 8FYP (1991-95)

Road type Length Est. cost Remarks (Ian) (Y million)

High-GradeHighways: Changi-Hutubi Class II motor vehicle only highways 48.0 100.6 Total investment:Y 1.55 billion; commencedin 7FYP Turpan-Urumqi-Dahuangshan Highway 285.6 850.0 Total investment:Y 2.3 billion; to be completedin 9FYP Urumqi-KuytunHighway 277.0 600.0 Total investment:Y 4.3 billion; to be completedin 9FYP Subtotal 6f1 1.550.6 National and Provincial Roads: New constructionof Class II highways 140.0 182.0 Improvementof Class I highways 206.0 103.0 Upgradingto Class II highways 362.0 290.0 Upgrading to Class HI highways 800.0 320.0 Subtotal l,08.0 89. Couy and TownshipRoads: Constuction of county & townshiproads 1,584.0 250.4 Subtotal 1.584.0 25QA

Sou 3a703.5 2D69ee.

Source: Xinjiang co mncfos Department. - 70 -

Table 2.10b: PLANNE HIGHWAYDEvELOPMENT IN 9FYP (1996-2000)

Road type Length Est. cost Remarks (kmn) (Y million)

High-Grade Highwvays: Turpan-Urumqi-Dahuangshan Highway 285.6 1,450.0 Includes 105.1-kmClass I highwayand 181.4 kmnClass II motor-vehicle-onlyhighway sections. Urumqi-KuytunHighway 277.0 3,700.0 Includes222-km Expressway and 55-lkmClass I highway sections. Subtotal 6 S,150.0

National and Provincial Roads: New constructionof Class I highways 138.0 179.4 Impzovementof Class 1I highways 251.0 125.5 Upgrading to Class I highways 140.0 112.0 New constructionof Class m highways 326.0 146.7 Upgrading to Class m aighways 1,060.0 424.0 Subtotal 1.915.0 2 7.

Count and TowmshipRoads: Constructionof county & townshiproads 1,823.0 291.7 Subtotal 1.823.0 291.7 IIAl A4300.6 6,42Q.3

Source: XinjiangCommunications Department. TA 3.1 TmBIlums Am NM Ctml_mm Fmsuu - lam= Ro1msAlmo TIU

oW so Cla No. Type& SbMou Czmt* ADT TwafRovow oroiecj Cbl law& No. Aspba Wh fw ToaI Pmmd pond cOm wiph IUlDH of Widt width coll- Year Tvuck 1999 2005 2010 201S s be of oooc.a ot kg" of mdr (m) t1o (eqAv) --- (U k " qm v.) 1 mprved hum p_ t imom_as (YT mnting hft ~~~~~~~~~~~~~~~~~~~width(mm)er(mo) po

la 2.64 smt o-t-i --- e hmofawatp mn> 324 527 791 1.515 m 3.75 2 7 2MI.75

h 3.13 .tb Pak" IV 2 Gvel (7) 2xO.S poe 1991 2.S51 6153 S.479 12.U6 19.457 1 1.70 4 2x7.S 2x1.50 a TUD}I

la 9.S8 metm e (Iq_mm m 2 Asplaah(7) 2x1.5 god 1991 590 1.43S 2.267 2.113 4.174 I[ 4.51 2 9 2u1.0

Mig- obebil.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- 1D v twd 2 AvI (12) 2xL5 1991 2.243 4,664 7.527 II.79 17.758 1 3.20 4 2W7.5 2x1.50 l 6.24 mawte

P_mge Road wb 1 3.75 amctem (wuaseinsldc) allied 2 Aq*ah (7) 2x1.5 Eod 1991 1.3S6 2.51S 4.337 6.696 11.110 n 1.62 2 9 2x1.50 TUDH lashdogha

0.91 saet ime PreaeRead C ---- - 7"eIsnaodtpoat a > 6.039 10.119 15.625 25.922 a O.S5 2 9 2xt.50 (em aide) a1 UDH at Kashidoegh

mm"! 15.63 24.73

Now comtuclaii. VrWeidelgmad %ngading. -72 -

Table 3.2: PfojXcT COSTSvt4nav (Jay 1994 price: $1.00 = Y 8.70)

L1l Fortlga Toal L el Forei4n Taw **-.-(Y milni o*....-- -. .... _ -- _ (I)

A. 12iW

11woits 771.95 771.94 I.543.89 88.73 83.73 177.46 50.0 IS.S4 74.17 92.71 2.13 8.53 10.66 80.0 (*lost ;:dq.tbh o pirosD 3.00 3.00 6.00 0.35 0.34 0.69 50.0 Suliat.1 793.49 349.11 t.64260 2121 976 JMJI L

(M) IUD AndT Roe& 36.73 35.84 72.57 4.22 4.12 834 49.4 Su_b1 36.73 35.84 n2.s7 i4n in LM 49OA C. (a) 11UDH ¶ Ol=b(w 1.05 7.35 8.40 0.12 0.84 0.96 87.5 aptealoNW a _uaiance 24.78 66.50 91.28 2.8S 7.64 10.49 72.8 A raz ois 0.44 0.41 0.85 O.OS 0.05 0.10 48.2 Sholal 26.27 74.26 t0D53 3 02 .53 IL55 fl2 (b) MhosofbEghw*ynetwors 7.80 8.08 15.88 0.90 .93 1.83 50.9

(0) 1_1 h i Twa l3owSloMm 0.21 2.42 2.63 0.02 0.2S 0.30 92.0 communlcmiimscbol 1.48 0.26 1.74 0.17 0.03 0.20 15.0 vCmalm6omTocknkaW**=Sed ool 1.95 1.95 0.22 0.22 0.0 Wig)Had way Stvey DesignIRL 0.11 2.84 2.9S 0.01 0.33 0.34 963 (v) 0.53 1.68 2.21 0.06 0.19 0.25 76.0 (vO H ;yAd BUMMM0.61 0.27 0.88 0.07 0.03 0.10 30.7 (vQ Ptojpt ExwAc Offioe 1.93 3.90 5.83 0.22 0.45 0.67 66.9 Subi 6.82 11.37 18.19 0Q77 ,U 2. g. (4) RouiwySdoft 0.81 2.65 3.46 0.09 0.31 0.40 76.6 mm 41.70 9 3 138.06 4:78 11.01 5 in D. l WfTa0Scima ftb" 0.03 1.23 1.26 0.00 0.14 014 97.6 ioa mSab O 0.81 2.34 3.15 0.09 0.27 0.36 74.3 AdOT1ehnIcal Woc*MSchool 0.77 2.34 3.11 0.09 0.27 0.36 75.2 JQV)Highw4y Suraynq d leignha 0.05 2.60 2.65 0.01 0.30 0.31 9S.1 C-oi -Dwpu_ 0.42 O.8S 1.30 0.05 0.10 0.15 67.7 (~~ H i d0.78 4.20 4.98 0.09 0.48 0.57 843 0.41 4.68 5.09 0.05 0.54 0.59 97.9 (vl Prpo4 0t Suparviala.Offie 0.36 1.74 2.10 0.04 0.20 0.24 8L9 PuhlloSccuruftyBmweu-TdlicPOlbc 0.89 1.08 1.97 0.10 0.12 0.22 54.8 (a) OXresoqanizaio_w 0.47 1.75 2.22 0.05 0.20 0.25 78.8 SuIlIbl 4.99 AM 27.S3 25 Ls W12 2

( Hih1way_um t 4.16 2.44 6.60 0.48 0.28 0.76 34.3 (b) meSb" t 1.37 1.22 2.59 0.16 0.14 0.30 47.1 S&bW 5; 3.66 91l9 64 Qn L4IE VA. II S SI2.4 L.0I.81 1.890.25 101.42 11 S 22La IL 83.02 88.50 171.52 9.54 10.17 19.71 51.6 4S1.95 115.11 597.06 55.39 13.23 68.62 19.3 Be e wO"A eiqAlab 144I74.1 1.211.42 2.6SS.83 16.3 124 I1052 OA. ted acqublamad amaanait 104.00 - 104.00 11.95 - 11.95 T41dP"im I.SSI.41 1.211.422.762.83 178.30 I39.24 311.5 tEclN e txes t Y 47 mm ($5.4 CONGO)MW wl oWn a Ite and iers on Bankloan dudngomuauc_dm Tam andduo ,,a so be _mte (fmmto proc_ab of at am b Twkfmn Amd&B. - 73 -

Table 3.3: ESTMAEDDSuRsEmET ScHE ($ million)

Disbursement profile of transport Bank fiscal year Estimateddisbursements projects and semester Semc:,er Cumulative % in China (9)

I199La December 31, 1994 18 18 12 6 June30, 1995 6 24 16 11

M9i9 December 31, 1995 12 36 24 16 June 30, 1996 12 48 32 26

1222 December31, 1996 15 63 42 38 June 30, 1997 19 82 55 48

December 31, 1997 19 101 67 60 June 30, 1998 19 120 80 69

December 31, 1998 17 137 91 78 June 30, 1999 8 145 97 90

December31, 1999 5 150 100 100

Note: (1) Project CompletionDate: December 1999. (2) Loan Closing Date: December2000.

La Includesinitial payment into SpecialAccount and advancepayments to contractors.

Source: Mission estimates. TAb.1 Mw weToTh,U GaOwJMON1 "uvMM TURAURUM TOM~- lamw Seaw ,,.,~~TUAMMW OU,, Wuhoo W AN_o- ~~~~caiwevu T Yo Nooauto TOaW mobiu Av NheaI DtAbmen veMcha vehicha Thoa Aulo- YWAIAN & mobils Wch. Nomw. Tot & & vtb mil AI.- Novma Tutan /a & whi. vnbiclc Total Aht a moble vebicle. Nocusto Tot 1914 a & a v . mobiu 4,116 la & vehicle.mehkic 996 5,112 ka la 1985 & La 3,811 373 4,184 - ,22 2t 1.043 19S6 ^ 842 572 4,170 160 1,414 4,3 2,093 1,479 37 1987 7 2170 1,516 791 3,534 1,673 93 270 1,061 79 3,1A3 1,766 1,6J7 1,811 64 63 1,680 1988 1,875 1,436 663 141 3,653 63 125 1,561 604 3,716 1,476 2,061 40 1989 46 1,522 2,121 773 4,441 1,481 79 148 921 57 4,498 1,560 2,207 1,443 85 37 2,244 1990 1,S28 1,654 810 160 4,799 37 81 1,735 97 4,836 2,057 1,773 50 1991 39 1,t23 936 2,096 1,904 124 1,060 5,044 52 55 1,954 4 5,096 2,085 1,827 25 1992 31 2,116 1,852 1,110 5,077 2,322 51 19 13 S5 5,132 2,373 2,618 2,884 43 23 2,641 An8a gvob (%) 2927 2,560 1.283 203 (1984.91) 56 2,616 1,491 2,669 14 2.7 2,683 1,302 - - 5.Std 238 1,54 S.1d 7.31d Noa4 - 6.SJd Numben swn abwe 12.7 an al convted to - 12.5 w tiuk equWvkm. 5.6 - I& Inlub%deal 1.1 ize Oftreck, MW&4hses b bandeall bume and trilers. sbie of trao, anhl & ThaI of automobile n c", trica M plu wosiuoviclh. Vd bicycles. AIma smwdk196-92. Ssw: TUDH PtM* Fet&" StudyReport, Xtiag HighwayPlanning, Srey Nd Deaib Ira,itu Septmbet 199, pp. 26-32. Table 4.1b: RECENTTtAPIc GatowTnON TEC ExISrnwG TUDH - URumQI-DAUANGSaN(NORTERN) SECTION

Miouan Pukang Genhezi Dahuanushan Auto- Nonauto Total Auto- Nonauto Total Auto- Nonauto Total Auto- Nonauto Total Year mobles vehicles vehicles mobiles vehicles vehicles mobiles vehicles vehicles mobiles vehicles vehicles La & La 1k LA /b LC La 1b Pk

1984 5,164 809 5,973 1,623 357 1,980 ------1985 5,610 991 6,601 1,816 480 2,296 ------1986 6,717 1,036 7,753 2,896 971 3,867 1,590 254 1,S44 - - - 1987 6,321 873 7,194 1,953 466 2,419 1,670 185 1,855 1,365 222 1,587 1988 6,954 966 7,920 3,012 771 3,783 1,699 143 1,842 4,204 668 4,872 1989 7,545 863 8,408 2,946 425 3,371 2,335 176 2,511 3,610 331 3,941 1990 7,974 882 8,856 2,950 301 3,251 2,632 203 2,835 2,949 175 3,124 _ 1991 8,760 937 9,697 3,334 353 3,687 2,482 155 2,637 3,026 187 3,213 1992 9,942 996 10,938 3,801 326 4,127 2,194 102 2,296 3,020 318 3,338

Annual growth (%) (1984-92) 8.5 2.6 7.9 11.2 - 9.6 5.5/d - 3.7Ld 17.21e - 16.OIe

Note: Numbers shown above are ai convered to medium trck equivalents.

/a bncudes al szs of trucks, minibuses, buses and trailers. 1k Inludes al iLXSof tactors, anima-drwn cate, rickshas and bicycles. Ic Totd of automobiles plus nonauto vehices. Ld Anna growth 1986-92. /a Annu growth 1987-92.

Soure: TUDH Project Feasibilty Study Repoi, XmnjiangHighway Panning, Survey and Design Ilsitute, September 1992, pp. 26-32. - 76 -

Table 4.2a: PRojECTEDDAILY TRAFFC VoLumes FORSELECTED YEARS BY SECTIONON PROPOSEDAND EXLSIIG TUDH - CAsE on MEDiumTtAFFc GRtowTHmAND ToULs (Medium Truck Equivalent per Day)

The Proposed Bilgbway Tb. Izitintg WlhMy Length (km) Miorual traffic Generated traffic Total traffic Total itrafi Pertain ~~~OldNow Pass. Frsight TtotalPess. freight Total lees. freightTotal P.... ywreigtTotal

i.Pwpu.8ginn1ngas uoutainumsasctian 117 67.18 66.40 .. - . . - . . -- an26 1.364 16042 1999 517 1.944 2.451 21 7 9 36 3.022 2.560 311 1.1721&1.442 200 Wea 2.872 3.738 24 at 105 682 2.9$) 3.3 513 1216 2.231 2010 1.~~~~~~~~~~~~2343.909 5.143 56 176 232 1,9J.055375 75239 .4 2015 1.~~~~~~~~~~~~6105.096 6.706 70 223 293 1.680 5.321 701DOI 016 3.42164,2)n 2018 1.852 S.65, I so'? 64 233 337 2.03 4.101 8,144 1.232 3,4Is 4,317 lalanaow2. ountainous "ection 199101 mountain 29.10 28.00 .. -- -. . -- . - - 36 S2032.425 1999 660 2.559 3.239 49 162 231 729 2.74-13.47-0 405 ,1.24 1,929 2005 1.1364 3.795 4.929 66 222 266 1I200 4.0il 5.117 676 271 2.*94 2010 1.642 5.196 6.640 122 368 510 1.764 5.566 7.150 1,01 23,19 4.6 2015 2.117 6.707 6.624 151 477 626 2.266 7,164 9.452 1.:5 429 564 2016 2.571 7.711 10,282 176 5)4 712 2.749 8.24) 10.934 1.4 4.13176.36* 3. 2.6 of asuamteaou section-fertilige p lent 1991 Plane 63.00 62.40 -. - . - -- - . - . 38 02,07 2,425 1999 660 2.559 3.2)9 49 162 23 79 2,74-12 470 40) 21.1 199 2005 1.134 3.795 4.929 66 222 26a 1.200 4.017 5:2I? 478 2,27 2,949 2010 1.642 5.196 6,644 122 St6 510 1,764 5.566 7 550 1C010 23.9" 4.20 2015 2.117 6.707 6.624 151 477 628 2,266 7.164 9.452 1.356 4.29) 5.649 l016 2.571 7.71110.262 178 534 712 2.749 8,243 10.994 1,446 *4.37 6,313 4. fertilizer plant-W~AUPO (Uru,i 1991 Pa. 1.0 19.50 ……- - . 3 .8 .2 1999 1.40S 5.287 6.692 9 34-2 4332 1,496 5.629 7.125 420 31.80 42.,00 2005 2.440 a.167 10.607 146 489 635 2.56 6.656 11.242 727 2,436 3.16) 2010 3,668 11,67 15,367 254 804 1.038 3,942 12.48316,425 1,140 3.610 4.750 2015 4.61 1,6258 20,076 316 1,007 1,323 5.136 16,265 21,401 I.63 ,192 6.631 s018 5.90s 17,716 23,621 379 1.137 1.516 6.284 18,85325.137 2.64 61219 8.239 Total CTurpan.Unmqi) 176.36 176.30 worth Section,

191 Plan $6.50 53.20 -- .------. - - t9oo 63 1,27 1999 ~~~~~~~~~~~~~4902.230 2.720 45 205 230 535 2.435 2.970 267 1. 33 .482 2005 619 3,495 4.314 60 340 420 699 3.635 4.734 4251,1 2.334 2010 1.167 4.977 6,144 114 466 600 1,261 5,463 6.744 591 .16: 3 109 l015 1.555 6.633 8,166 142 604 746 1,697 7.237 6.934 761,33364:119 2016 1,945 7.761 9.726 170 680 60o 2,115 6,461 10.576 961 3.64 4,607 2. Tianchiroad-Shangehabe 1991 silly 49.00 47.60 -- . -. -. . - . - -- 699 5.956 4.655 1999 1,310 5,964 7.274 64 384 466 1,39 6348 7,742 366 1,676 2048 2005 2.166 9.234 11.400 149 633 762 2,315 9.667 12,162 571 2,435 3,606 2010 3,069 13,16916,256 213 909 1,122 3,302 4.076 17,560 796 3.395 4:192 2015 4,081 17,39721,476 366 1,136 1.402 4 34'i16532,8 ,6 .4 .2 2818 5,076 20.31125,369 320 1,262 1,602 5,396 21.59326,991 1.346 5,39S 6.741 3. Shengehaha-fltetnroad (Unmqi)o 60 1991 Plane 650 .0 - - - - . * - - 154 672910s.2 it"9 I,760 8.017 97-77 113, 517 63'0 18,673-*.5S4 10.40-7 1.6 .022 .6 2005 2,967 12.7~~~~,3915.726 216 927 1.145 3,20513,666 16,671 1.6 .36 10.3 2010 4.325 18,44022.765 316 1.555 1.673 4.643 19,79524,438 475 SI0,27in .36 201 5,773 24,61130,36 361 1,625 2,006 6,154 26.23632.396 6,7 26,44 SS:115 2016 7,229 26,915s36.3144 447 1,790 2.237 7,676 30,70536.361 6,25 33.03641,27 Total (Ubauangah&&.DnmqI) 112,00 107.00

Grand t"ol (TWA!) 290.36 263.30 - 77 -

Table 4.2b: PRtojECT DAMLyTRtAmC VoLumE FoR SELECTEDYEARS zY SECTIoNoN PRoposED AND EXITIG TUDH - CASEOF: MEDIUMThtmrC GROWTrRAND NO TOLlS (Medium Truck Equivalent per Day)

lb. Propocad 3ibay noe Zulatit as Ulec Length(he)rait I tzual Generted taffic otal taffic Total traffic TarraSa Old NM Pea.. Pre5ght Total Paee. Freight Total Paes. hPeight Total Pace. PreightTota

teat Section,uos Oti

1999 59~~~~~~~~So2.219 2,609 21 76 99 611 2,297 2.906 177 666 84 200 I.079 3 610 6.69 26 81 105 1.103 3.491 6.794 293 979 1.72 l0i0 1.549 4,966 6.537 56 176 232 1.625 5,166 6.769 631 1.343 1,:7946 2013 2.030 6.429 6.459 70 223 293 2,0 6.52 0.732 $53 1,I 2,48I 2014 2.669 7.404 9.673 66 253 337 2,5150367,657 10.210 727 2.183 2.:909

I moot"a 29.10 28.00 - . - - - 862037 3,42) 1999 64 3.2; 65 .107 69 18 23-1 911 Mi2 6.330 213s 836 1061 2005 1.6434 4.799 6.233 66 222 28 I.0So .021 6,521 376 10267 1:645 2010 2.083 6.594 8.677 122 3S" 510 .2:05 6.:982 9.187 569 1,603 2,171 2013 2,685 S.50 11.187 £51 477 628 2.836 8.979 11,615 769 2.497 3,266 3018 3,256 9.772 13.030 178 534 712 3.636 10.306 13.742 959 2.876 3,635 3. ft of maunataimuc oeCtion.VertItzier pleant 1991 Plane 63.00 62.60 . - - . ------362,037 2.425 1999 663 3.263 4,107 69 182 231 91l 3.47" 6,336 S2363 1,061 2005 1.434 4,799 6.233 66 222 288 1.500 5021 6,521 376 1,267 1.64 2010 2.083 6,96 6.677 122 388 510 2.205 6.982 9.187 691,603 a,372 2015 ~~~~~~~2.688.502 11.187 £51 677 628 2.836 8.979 11.615 78 2.97328 2016 3.258 9,772 13.030 178 536 712 3,636 10.306 13,762 992.86M 2,633 4. Pertilteer plant-AhIcp. (a mq) 1991 Plane 19.0 19.50 -. - - - -- S.; ------7391 3.63 6.622 1999 1.52 5.12 7.6486 1 6 433 1.663 6,254 Y.9i7 255 959 1.216 2005 2727 9.129 11.856 166 669 635 2673 0.618 12,691 660 1.474 1,616 2010 6.126 13.066 17.192 254 604 1,056$ 6.380 13.670 18.250 702 2U2S 2923 2101,5 5.405 17.116 22,521 316 1,007 1,325 5.723 18.123 23.8646 1,067 .379 6,4466 2018 6.620 19,661 26.681 3791 1,137 1.516 6.999 20.998 27.997 1.360 4.019 5.359 Total (Wtrp-en-Uiqt) 178.38 176.30 north Section,

plane 56.50 53.20 - . -- - - no-9 1,637 1.92 1999 ~~~~~~~~~6232,6 3.443 65a 203 250 666 3.045 3.713 133 606 ISO 2005 1,066 6,653 5.497 so 360 420 1,124 6,793 5.917 200 6503 I"a5 2010 1463 6362 7.830 114 666 600 1,602 6.826 6.430 270 1,13 1.423 3015 1,60 .41I 10.621 142 604 746 2.122 9.045 11.167 356 1,3 2I66 2016 2.474 9.896 12,370 170 680 65 2,644 10.576 1S3.80 633 1,736 l.1t" 2. Tienei r.-bqhh 1991 HilY 69.00 67.60 -. - - - -- . -. - - 6S" 3,936 4.655 199 1,464 6.670 6.134 64 364 466 1,548 7.056 6,602 its 931 6 2005 ~~~~~~~~2.46210,611 12,853 169 633 762 2.591 11,046 13,635 216 1,3336 1:452 2010 3.657 14,739 18.196 213 909 1,123 3.670 IS.6"6 19.318 429 1.630 2.23 2015 6.66 19,661 24,027 266 1.136 1,402 6,632 20.597 254:9 605 2.3I 3,16 2018 5,676 22.710 26.368 320 1,282 1.602 5,998 23.992 29.990 76 2.994 3.762 S. SbupcbUtmura (Octaq) 191 Plan 6.50 6.00 - -. - - - . - 156 .2ISO 20,269 AM9 1,972 6.961 10.953 115 517 630O 2,065 19,696 11.53;3 1.537:076 6,627 2005 3,344 16,256 17.600 216 927 1.145 3.562 15.163 18,745 2,767 2 1.794.456 2010 6,641 20.639 25.480 316 1.355 1.673 5.159 21.994 27.153 4.31 16.080la 21 201S 6.459 27,533 33.992 381 1.625 2.006 6,64029,156 33.996 5.9 as.57631,55s 2016 8,061 32,32240,403 667 1."0 2.237 6,526 34.11242.0640 7.40 29.61637.2 Total (PheghnU~q) 112.00 107.00

GrVandTota (TOMl 290.36 283.30 ~~~~~-- 6O2t *tt O t lt) Otet1Sti st9cl

ootot eooou Ttob azo.uq 0uu~o S'

MoZst ntin ctlCSt i*tGUt C61uist U9 t CCUt Sig pta it tsn't a1cI Waxt ose'st sto'toISo's toos'tLtt'tt ts'ot clt'I It6 Ott ItSS'1 0o0clt ttS'0 c00t goo:' "2'* 910'? M.# "s' g IsI ot li tcn t so a £ot£ 0ts,? 06ST DG t OelI - - - -t- *- - " s t 1to6 c*0'S 0to60 ItO? £wat90 9t1 toot to:?09'?t0t't Ogg S96'st01 019 2t1' 100t 1:9 Tt1'S An cot-it o9n't en9r t t'? 9t -' 991 OtOt'990'St *0'C no0 Gote tn ot0 n06' 0T S9' it s16 "lo on9 6n *00t' 920'S 00 t o00t 0' log I'S Ott 906L ao19S 66 to tot t 63T09 tno OT12S t 666m Is6 *Sl6 t o - * C- - -- M ofe- " It st -- t T0t st mov tgsot ost colov II An=t t S

"got Noot got gt:t' C"l O'S st ott ott sit tfs Mot oe ot Meo Itt0't 66£' 009n n t 099'n e60et 9£ 90 09st06l '9t *99 096 6Met no' 999' S096 0t9 99t's 99* 00P 609 "I tc6' OU't0s t0c9 otot Stoll 0teSt tn0 " tI6t6' 69£ 0act 0 t 0M vvvI See:? 6 g00 "6'S11t oo tien 0to 001Ott Ogg t C91 Iti Ms10 6Note02?tateW MTm 996'? I 01ona6ttt ot'069'SIt 60 ta' t69'1 060 *------0o 06 0I'95 60R

06'911 36'0 (Ob34d9& ~ 660' 9*59 ' 600'? 0£95 565'0tt61e. 91%' £6' 655 01'S 919'? 010'S 010t0sesl

U09.0 690' 019 61t0 9It'S CO00t 6S9 .d9t 991 900'S Stt'9 619. t t00 sot ti9le t6t "9'10l9 tLt'tC9 9 1 t 669 0t 16 606'c 119'9 U'Mt 666 #VVICMot talct t91 Ate'60t Ugot:-o twb- e09t-- SeaI^ I x"-- tg 9-t- totzet 9 --999t 1: *-st oc 61 gADS" 36MT955dotaS1 661

909 0 0000 909 19' I66 0' 00 00 9 6 III'S 094600 00'9 * 90S 0t6 m.' c u1' £0' 009 Otst tot 2' 90'9 916'? 6001 sn9'6 t otet u06 9u t 9O9'I 0St1 g6 to col'st.960. 010' 000 060' *9titl Sti0 ll totltml~ ~ 0£'"?I ~0 690t9 ~ 10i ~00 69t~ ntt'1:6~ 06g't.94tttnv ~ 1SCoiltaMtO0 w 066e ' t 60n9' £'t 9 ot n - t -O -Al -- t o t D9 t.lO S9 fb MtO' £169' Ot 0' 9' 09' 01 00 00 9L@6 90' 01'? o 010001es 0t69' t6tI ctt' TI*2 0 C0 9 010 t 0T 9t5 ? I#"19 'S1I I9' got moot Atoll to60ls L69Soto ' 009 £19 Ill 0LL 9 90'b 5t0 Mot ivn t ez nso ! Sbte et s tu OtSs at 1951 9sgl 0eT9to'1 WNle "909' 010'? 909 1029 6£' 000LI Ot lt0 99 660'9 911'S 9 600Me tt0'? £t9' 602 000' 0O' 6s0 et t {tet nt toTt 9,t,tt t to tt I9 _C tt001 9_69 CG*fviols XT06s1' t ci'sw109 Ot t 6661oot t t tCC't L" to:ISK te U c' t t*t t at evn ttCZn t.t' lebt 6661 U ntM' t CtS i Iet n@ I t t tt S04' ts lt Tc9 Dlf 0161 a9eM o 106" 1tS30On' *1 9 9Ctzt co OrA" TAMn't 19tG uEtC ct'z sto tiGt" St: " tGIt C01 12t *e S901t 6 tzr C- otoot tnl 1"lo eti 4001 :C 0 1 tn e6 Ui of t3t't toile S0T e at I~~~~~~ 90X>$ t *

Pa 99$6 s +@ 499wee qst2alto P TO tot 3

~~~~~~~~~~~~~~~~~~~~~~O"4ssamt w t I

0£6~~~~~~~~6' ~ 0'~ ~ 1 mo, 6- aNs au,6'8L0azos 0'? *so-x60 so0'0 :>1803"s0'0 ~ 2' 16 i

- HaZL M M3 GW 3SOdOIUNO NOWS Ail SMA UMM1 SSwmOA MUM JLMI GZ:fOI :1£VVaIERJ - 79 -

Table 4.3b: PROJECTEDDAILY TRAMFC VOLUMES FOR SELWEDn YEARSBY SECrIONON PROPOSEDAnD EXISTIG TUDH - CASEor. Low TntAmc GRowTrHAmD No TouJs (Medium Truck Equivalent per Day)

The Prop"osd 816imhea Too tulatlus 31eh' Lengthorual (Ia) traffc Generatedtraitu to otl tri oTotal traffft Teranu Old ew Pea.. treight Total Pa"e. PrelgtS Tto ta Paes. Ireigt ftotl Pges. fr*UMh ToWa

1. Tu7spn.2eltann of uount3eiu.t section 19,1 Iul 7.26 66.40 .. . - - - . * - - 298 1.544 1.662 19919 562 1.11s 1.677 is 70 99 56) 2.19 2.776 168 du2 8 ZOOS 099 35.010, 3.909 24 61 105 92) 2.091 4.014 259 U9 I.12 Sot0 1.172 5,714 4.6 56 176 123 1126 3,690 5.116 S I21052 1.355 l015 1.465 4,6)) 60'9'6 70 22) 2921 1.52) 4.656 4.389 406 1.292 1.282 2016 1.741 5.124 6.966 64 2) 337 1.6*6 5.477 74303 472 1.416 1."I .SieuOVA viountoinoue section 199 Mountain V(.10 26.00 -- - . . - .. . 8 2.057 2.425, 1999 739 1.782 5,521 49 162 231 76 196 2 .S"7s2 227 55 1.62 1005 1.192 2.995 3.166 66 22 266 1.29 4.217 5.476 252 1.179 $1.1 l010 1.535 4.917 6.470 122 5i6 51 1.675 3.05 .960 449 1.422 1.8671 101 1.958 6.2902 8.160 151 477 626 2.109 6.679 6.766 540 1.I12 2.251 1018 2.345 7.034 9.379 176 534 712 2.522 7.566 10.091 610 1.660 2.480 S. 2nd of mzountainana etion.Vertilisr lent 1091 Plae 63.00 61.4 - - --. - . . . 5 2027 2425, 1999 739 21762 3.11 49 162 2)1 78 1.964 2.732 227 855 1602 2005 1.19) 3.99S 3,166 66 22 186 1.239 4.217 5.476 .7 I52.52 S010 1.553 4.917 6.470 122 368 310 1.675 65.5056,8 44 1.42 1.672 l01s 1.956 6.202 .160 151 477 616 1.109 6.67 6.88 54 1.71 2.222 1016 1.3485 7.034 9.579 176 534 711 2.52 7.S68 10.091 20 .882.460 4. IPertiliserplaat.Maulpo (U- 1991 Plane 190L19.50 . - . . . 2 .8 .2 1999 -.51) 4.92-66.251 S124 4)23 1.40-45.260 6.666 25la9".1 l005 2062 6.971 9.05 146 469 655 2.2*8 7.460 9.66 1,5 1.23 l$71 2010 2.74 6.6 141 24 64108 29794212.469 527 1.67 2.9 2015 2.47 10.91514.562 216 1.007 1.325 5.76 I13.2 Is.7 66 212 2.767 2018 4.116 12.35316.471 279 l.ss7 1.5$16 4.496#715.9490 17.967? 77 2.52 12.10 Total (Thrpen.unaqi) 1743.5 176.30 north Scin

- .. - 9 1.627 1,927 1.DabMa!t 1 Plan. 56.50 55.20 .. - - . no- 1999 549 2.499 3.046 45 20 250 594 2.704 2.298 of 224 58 1005 057 5.65) 4.310 60 340 420 927 3.9"S 4.930 05 407 501 2010 1.034 4.406 5.40a 114 486 600 1.148 4.692 6.040 119 507 626 201 1.220 5.205 6,425 142 604 W4 1.562 5.0 A.17 1S0 spy ?S7 2018 1420 5.662 7.102 170 660 650 1.5900652791 7 0 2. Tiaeb ra-Sanahh 191 311 49.00 47.60 - .- - - -. . - - 6992.5 465 1l99 1.359 6.1I" 7.547 64 284 466 1.443 6.7 6.015s 211 95 1.0 2005 6.850s10.925 149 6)2 761 2.224 9.48) 11.707 294 1 I541.4 2010 ~~~~~~~~~~~2051.7 11675 14.414 212 90 1.12 2.952 12.564 15.556 221.58 I.5 2015 2.464 14.76716.231 266 1.156 1.:402 5.7)0 15.90319.633 476 .2 .0 2016 4.162 16.644 20,606 520 1.36 1.602 4.46* 17.92422.408 5S" 2.142.2 ShaugeahheNetsnread (UmAqi) 1991 Plane 0.50 6.00 -- - .. . - - I.$4G St72t1o.Mt 1999 1.624 .0710.151 its 517 620 1.9)7 0.624 10.761 1.462 6.228124 2005 ~~~~~~~~~~2.65012.121i00 218 927 .1465 3.066 13.07916.147 .349.9 12.235 s010 3.766 16.14719.935 216 1.355 1.:672 4.106 17.50221.606 2.114212.29 18540 2015 4.614 20.52025.334 561 1.625 2.00 5.195 22.14527.540 4.015 17.11 21.129 2016 ~~~~~~~~~~5.63023,396 29.248 447 1.790 2.22 I.9 I51621.465 4.776 19.10 22.S2 total (Uab,aabn-neharm41) 112.00 107.00

Grand Total (SUDS) 290.38 285.50 - 80 -

Table 4.4: TYCAL ECONOMICVEHCLE OPERANG COSrS ON EXISTNGAND PRtOPOSE TUDH (Yuanper vehicle-kilometerin January 1994prices)

Cost item Freight vehicle la Passengervehicle /b Existing Proposed Existing Proposed road road road road

Fuel and oil and lubricant 0.50 0.44 0.32 0.30 Tires 0.15 0.13 0.11 0.10 Maintenance 0.35 0.26 0.23 0.19 Crew 0.13 0.09 0.09 0.06 Depreciationand interest 0.28 0.21 0.20 0.16 Management 0.09 0.07 0.05 0.04 Total I120 O 0.85

La Based on existingtruck fleet mix of 13 percent light trucks, 62 percent medium trucks, 8 percentheavy trucks and 17 percentarticulated trucks. RBasedon existing passenger vehicle mix of 69 percentpassenger cars and minibuses and 31 percentlarge buses.

Sources: (1) XCD, Feasibility Study of Turpan-Urumqi-DahuangshanHighway, December 1993. (2) PPK Consultants:(a) InterimReport for Henan TruckingStudy, December 1993; and (b) Final Report on YangtzeEconomic Zone Transport Study, April 1992. (3) Missionestimates. -81 -

Table 4.Sa: SummARYOF INNAL EcoNoMIc RATESoF RETURNAD SENSmvnY ANALYSESBY SECION OF TUDH - CASEOF MEDiUMTwvmc GROwTHAND ToLLs

------Sensitivity Analysis----- Case 1 Case 2 Case 3 Case 4 ...._...... Gener- Total Cost ated Total Benefits (110K) Base Traffic Cost Benefits case (-SO%) (.10K) (-otO) (-10X)

East Section: ...... 1. Turpen-Beginnig of mountainous section 21.3X 21.2% 20.0X 19.9X 18.7X 2. Bhiyanggou mountainous section 11.1X 11.0O 10.2X 10.2t 9.3X 3. End of nountainous section-Fertilizer plant 27.4X 27.2K 25.9X 25.8X 24.4X 4. Fertilizer ptant-Wulapo (Urumqi) 15.2X 15.1 14.3S 14.2X 13.3K Total (Turpan-Urumq') 17.8X 17.7X 16.7X 16.6X 15.6X ...... ----...... North Section: ...... 1. Dahuangshan-Tianchiroad 25.1X 24.8K 23.7X 23.6K 22.3K 2. Tianchi road-Shangshahe 19.8X 19.6K 18.7X 18.6X 17.5X 3. Shangshahe-Netan road (urunqi) 19.6X 19.4X 18.5X 18.4X 17.4X Total (Dahuangahan-Urumqi) 20.7X 20.5K 19.5X 19.4X 18.3K ......

Grand Total (TUDN) i9.3K 19.1K 18.2X 18.10 17.OX W* ... - 33 *3 3233. 33*3 . - 82 -

Table 4.5b: SummARY OF IERNAL ECONOMIC RAES OF REnuRN AND SBIm'1Tv ANALYSESBY SECTIONOF TUDH - CASE OF MEDium TRAmC GROWTSAND No Tous

. Sensitivity Analysis----- Case I Case 2 Case 3 Case 4

Gener- Total Cost ated Total senefits Wm100 Base Traffic Cost Benefits case (-S40) (+10X) (-10x) (-10X)

East Section: ...... 1. Turpan-Beginning of mountainous section 23.0X 22.9X 21.82 21.6X 20.4X 2. saiyanggou mountainous section 12.82 12.72 11.92 11.8X 10.92 3. End of mountainous section-Fertilizer plant 29.92 29.7X 28.4Z 28.22 26.71 4. Fertilizer plant-Wutapo (Urunqi) 16.1X 15.92 1S.12 15.02 14.12

Total (Turpan-Urumqi) 19.52 19.42 18.42 18.32 17.22 4...... North Section: ...... 1. Dahusngshan-Tianchiroad 27.6X 27.4X 26.22 26.0X 24.62 2. Tianchi road-Shangshahe 20.82 20.62 19.7X 19.52 18.52 3. Shangshahe-Hetmn road (Urumqi) 20.72 20.6X 19.6X 19.5X 18.42

Totat (Dahuangshan-Urumqi) 22.02 21.9X 20.8X 20.7X 19.6X

Grand Total (TUWH) 20.82 20.6X 19.6X 19.5X 18.4X .U3 . . 3 U. UUUt ...... - 83 -

Table 4.6a: SMIMARYOF INM.NAL ECONOMICRATEs OF REInUN Am SENSmv%1yANALYSES BY SEcnoN OF TUDH - CASEOF: Low TmAmc GROWTRAr ToLus

.---- Sensitivity Analysis----- Case Case2 Cas 3 Ce" 4 Genr- Total Cost sted Total Benefits (4102) Base Traffic Cost Benefits cas (-502) (0102) (-102) (-10o)

East Sectlon:

1. Turpon-Beglming of mountainous section 18.22 18.12 17.12 17.0X 15.82 2. Baiyanggoumountainous section 8.9X 8.82 86.1 8.0X 7.3X 3. End of mountainoussection-Fertilizer plant 24.52 24.3X 23.12 23.0X 21.62 4. Fertilfzerplant-Uulapo (Urnqi) 12.1t 12.02 11.22 11.22 10.3X

Total (Turpan-Urumqi) 15.12 14.92 14.12 14.02 13.02

North Section: ,...... 1. Dahuangshan-Tianchiroad 21.12 20.82 19.82 19.72 18.42 2. Tianchi road-Shanshahe 17.8X 17.6 16.82 16.7X 15.6" 3. Shangshahe-Metanroad (Urunqf) 17.7X 17.5 16.62 16.5X 1S.5

Total (Oahuangahan-Urwiqi) 18.42 18.12 17.32 17.12 16 42

Grand Total (TUDN) 16.82 16.62 15.7X 15.62 14.5X ms.unr _us _s. - 84 -

Table 4.6b: SummARYOF INmENALEcoNoMc RATS OF REvRN Am SENsrnVY ANALYS RY SECTON OF TUDH - CASEOF LOWTRAC GRowif Am No TOLIS

.-.Sensitivity AnsLysis----- Case1 Ce' ' Case3 Case4 ...... Gener- Total Cost ated Total Sonofits (+101) ease Traffic Cost Benefits case (-SOX)(0101) (-101) (-101)

East Section: 1. turpan-3BgIing of mouwtalnoussection 20.7X 20.6X 19.4X 19.33 18.1X 2. .ityarngu owutainoussection 10.S3 10.41 9.73 9.63 8.81 3. Endof meoutafnuussectlonf-Frtilfzer ptant 26.9X 26.7X 25.4X 25.31 23.9X 4. fertiltzer pltnt-Vulapo (Urumqi) 12.9X 12.71 12.03 11.9X ¶1.03 Total (Tuwpan-Urwiqi) 16.93 16.71 15.83 15.71 14.61 North Section: 1. 0ahuurqshan-Tianchfroad 24.1X 23.81 22.7X 22.5X 21.2X 2. Tienchi road-Shangsbahe 18.81 18.6" 17.71 7.6" 16.53 3. ShuqshhehNetu.road (Urumqi) 18.6" 18.53 17.53 17.43 16.4X Totat (Doahuashan-Urufqi) 19.7X 19.51 18.53 18.41S 17.3

OrandTotal (TWU) 18.3X t8.1X 1?.2X17.1X 16.0X UU3U one*s338 Wass3833 Chart 1: XDANG CoMNCAwONS DE"ARThmEr (XCD)

People'aGovernment of initang Uygur Autonms Region

Prefectural Xinjlang Cosunications Department ag High-Grade Govermnnts Consrucion Authority 4&munilpaities

PrefecturalPojc commnication HEADQUARTERSDIVISIONS r Execution Division Hi way *Off ice Administrative Office 1 Adln stration | J ~~~~~~~BureauI Manicipal rea Xinjiang Roads _ Execution * Coa=uication Policy and Regulation * Bridge Company Supervision Division Trans= 0atlon * Office _ . _ ~Administration _F1nancial Bureau Xinila Goods & _ .Maters Company Science & Technology * 4 ~~~~~~~~~~~~~~LaborService c _ ~~~CompanyIt Labor & Salary Xinjiang Highway * Planning, Survey Design Institute Xinjiang Personnel & Security Comn'ication _~ ~ ~~J~jagT Hospital I Ilnjiang Traffic * p Organization Membership 1 Science Institute ip s . ITranslation Xijn Service Propaganda XCinlcatg *l Office ' l I ~~~~~~Comuui_cationF School Auditing 1Quota .II Mana8ement ionXinjiang * I Officet Supervision Tomecnicatlon ITechnicalVorkera , . | ~~~~~~~~School -f RetlredCarders

Education *

* Units to receive Institutional Toll Collection * strengthening snd training under the project. Chart 2: XUANG IHIGHWAYADMUSRATION BUREAUOXAB)

XinitangHighway Admtnistration r~~~~~~~

Transport Road Construc- Bitumen Stor- Highway Class I Highway Man- Prefecture, Higghway Management Company (1) tlon Machinery age General General agewent Division. Man- County, City Department _l_anctory (1) Station (2) Divisions (14) agement Department(1) and Town Highway (other unit) 00

Maintenaace Vehicle) Bitumen Storage Iighway Engineering Eergency mMaitenanceaintenance Workshop (1) Team (2) Brunch Station CS) Division (77) Team (25) Squad(l) Team (67) Team

MaLntenancel Gang (550)1

lote: Himbera in brackets represent exsting nmaber oi subunits. - 87-

U 2I I: a d F, a atjsi tI *k I "I I ii I a IIMI In I.. iii!

1111 jII I I I I I cUht 4: XDuANJG HIGHwAYPLANmNNG, SunwEY AND DzGN INSTInuml D

Director (I)

Deputy l , Chief Engineer Director (2) , (1)

Cc=prehensivemiug Servce(70 (P6) Geooicaurve1234 No. No. No. 26) e30 33 (6 (8 (1

---- -SURVEYTEAM$- te F i oulling Architecture & Design (21)

_ - ~~~~~BrxIdge & iTuelgesign (21)

Qalit1 2"t ti (3)

Pla & Oper- at Ofic (27)

Btoet Numbers In brackets represent existing naumberof staff. Chart 5: XDULMG tRAMC SaiNCB INgDTUTEOM

< ~~RoadsStudy Office (18)|

Roads and Bridge Desi,gnOffic.e (12)

ComputerApplclations l ~~Officze (6)1

Directors(4) Motor VehicleStudy & c ExaminationOffice (24) t

5 ~Docum.entationOffice(1)

- ~Techn4calConsultation Department (2)

Xconomic Study Office (24)

Notes Numbers in brackets represent existing number of staff. Chart 6: XDUlANGCOMMUMICATONS SCHOOL (XCS)

|Predldeat|

Vice President Ia chageI Vice President in charge of General Affair of Teaching AffdiYS

_ __ _ ~~~~~~PresidentOffice (3)onjbaagrlPesnl _InfrastructurQ Construc; _j~OnjbMDgra esDe tioa £ectlon (2} ~~~~~~~~~~~TrainlagSection (2)

Catering Educationl Researc Section 2 _ General Affairs_ Section (3) _Student affairs Section (5)

[-I iTgplagROOD (3) Stndentat Union (15)

NAiCollectin8g) Academic Affairs Section (4); ROOM (I)1 _office of Water and _Patc okhp(6 Electricity (3)

_Adslnistrative Office (3)

_ uinancial Office (2) Teaching Croups (58) CliCic

Nlote: 3uzibere in brackets represent existing nuber of staff. Chart 7: ORGANuZAInONSTmucrRE OF XIIJUANGCoImmuNIcAmoNm TECHNICAL WORUDERS S(CooL (Y'TWS)

Student Affairs Division (5

Vice President (1)|

Security Division (7)

CitinesepMath, Physics,Physical ITraining,TechnicBases, Automobile Other Office. (9) Electric.,Automobile Structure, Road ConstructionMachinery. Auto- mobileRepairing, Automobile Driving | Highwy and other teaching groups | (Total 14 groups) … ______…

Notes NumbersIn parenthesesrepresent existing nwumber of staff. -92- AN 1

INSTITUTIONAL STRENGTHENING

1. This annexconsists of three parts: (a) Part 1 summarizesthe nitialAction Plan and operationalschedule laying out the transiton of the ProjectExecution Office from a unit of the Migh- GradeHighway Construction Authority (HGHCA) into a permanentarm of the XCDresponsible for high gradehighways.

(b) Part 2 providesa summaryof the mainfindings and recommendafions,by consultantsunder NorwegianTrust Funds, for strengtheningthe taning capacity of the Xinjiang CommunicationsTechnical Worrs School (XCTWS)and XinjiangCommuiwcatlons School (XCS) to meetthe needs Of the transportsector in constructionand maintenanceof highways. The report was submittedto the Bank on September21, 1993. It was tansmittedto the XCDand Project Execution Office (PEO) and became the basisfor discussionsduring appraisal regarding the strengthening of training capacityin Xinjiangfor highwaysconstruction and maintenance.

(c) Part 3 is a summarydescription of the trainingprogram agreed to by fte appraisalteam and PEO officials. The detailsof eachinstitution's progam is includedas part of the ProjectFile.

PART 1- PROPOSEDPLAN FOR TRANSON OF PEO FROMUNIT OF HGHCATO PERWANE ARm OF XCD

Summaryof Pla for Setting Up a High-GradeHighway Administrative Bureau (HGHAB)of the Xhilang Co cations Department 2. The presentXHGHCA's Project Execution Office (PEO) was established only for the needof the TUDHconstruction period. The 40 staff that havebeen approved are also responsiblefor managingthe constructionof two other large foreign fund proects-Urumqi-KuytunHighway ("CH) and UrumqiHetan Road. This shortageof manpowerwill bave a directimpact on the managementof futureoperations: the TUDH projectis expectedto startin the secondhalf of 1994,the UKHproject is anticipatedto sart in the secondhalf of 1995at theearliest. Operationalmanagement planning for these projectsneeds to start immediatelyin order to be taken fully into accountduring the constructi process. 3. Themanagement system for high-grade highways is quitedifferent from that of normalhighways: it requiresmany more specializedposts, is rather complicatedin - 93 - ARNN I structre,and technicallydemanding. Such an organizationneeds to havewithin it aUthe managementfunctions such as highway construction,operation, maintenance,ton collection,road safety,etc. 4. Followingthe principles of (a)managing the high-grade highways effectively and in a speialized way, and (b) the managerialmode of the owner beingresponsible, there needs to be a set up of a strong implementationinstitution, based on PEO's responsibilityfor fund raising,preliminary preparation, operation, toll managementand the reimbursementof loans. The proposedHigh-Grade Highway Administative Bureau (HGHAB)of theXinjiang Communications Department would ensure smooth construction and operationand a better socialand economicreturn. 5. The proposed transition plan to estabiish a High-Grade Highway AdministrationBureau (HGHAB) is basedon experiencefrom other provinces: (a) The HGHABwould be set up basedon experience.of thepresent PEO. The newinstitution will function both as a ProjectExecution Office (PEO) under t-nedirect supervision of theXinjiang HGHCA, concerning the construction Of new high-gradehighways and as a functionalorganization under the supervisionof XCDregarding the operation,maintenance, management and toll collectionon high-gradehighways. As such,it willrepresent the XCD, as the owner of high-gradehighways, and will be supervisedby both the HGHCAand the XCD. (b) The HGHABwould have a three-tiermanagement system. For the TUDH Project,there will be two administrativesections: one in Wulapoand one in theNorth of Urumqi,responsible, respectively, for the managementwork of Turpanto Urumqisection and Urumqi to Dahuangshansection. Besides, there will be five administativeareas in Turpan, Dabancheng,Wulapo, Urumqi, and Fukang; for the UKH project, there will be three administrativesections set up in the westof Urumqi(the presentUrumqi to Changjifirst-class highway administrative section), Shihezi, Kuytn, and one to two administrativeareas in each secaon.

(c) The HGHABwould have its owndirector, deputy director, chief engineer, chief economist,chief accountant,and offices under it, includingan administrativeoffice, personnel and educationsection, monitoing office, plan and statisticssection, financial accouating section, project technology section,project maintenance section, the right-of-waymanagement sectdon, equipmentand materialsection, general affairs section, traffic police sub- branch,etc. The staff establishmentin the above-mentionedsections and officeswill be set at 125persons. (d) HOHAB'swork will havea differentemphasis before and after theproject. The main task during the constructionof TUDH and UKH i3 the managementof construction,as TUDHis completed,operations will shift -94-ANNI

to UKH's constructionmanagement; and the operation,maintenance, toll collection,road safetyof TUDH will continue. As the Bureauwill be a new organizationlacldng in experience,the managerialstaff for the constructionperiod should be in post first. The total personnelneeds are estimatedat 80, addinganother 40 staff to the present40. Theyshould be on postbefore July 1994. Another45 staffpositions will be addedin 1997, preparingfor the operationsand maintenanceof TUDHproject when it is put into use in 1998. Thereis likelyto be somestaffing adjustment in the Bureauat that time. (e) The presert ExecutionSupervision Office under XinjiangHigh-Grade Highway constructionAuthority will become the Project Supervision Sectionof the Bureau,but maintainsits presentrole. It will be headed,as at present,by a deputydirector of the Bureau. (f) A subbranchof TrafficPolice will ba includedin the Bureauin order to managethe high-gradebighways ef.;ctively, and meettheir specificneeds. This is based on the experienceand lessonsfrom other provinces. The traffic police will be under the professionalcontrol of XinjiangTraffic PoliceHeadquarters and will be responsiblefor the safetymanagement of high-gradehighways, and maintaintheir normaloperations. A subbranch of the traffic police will be placed under the administativesection of HGHAB. (g) The fundingfor HGHABwill be mainlyfrom the managementfee of the constructionand supervisionof high-gradehighways and thetoll collections as well as from fees collectedin the operationand from other fees to be collectedaccording to futurestipulations.

PAkr 2 - SENGTENG TiE CAPACTYOF TEI XJANG COMM CATONS TzcAL WoRSm' SCEOOL(XCTWS) ANDm X1NJANGCoMmNIcAnoW SCHOOL(XCS) TO TRANEHIGHWAY MAINTNANCE P SONNEL 6. Enrollmentsat XinjiangCommunications School (1982-91). See Table 1. 7. Enrollmentsat Xnjiang CommunicationsTechnical Workers School ( 1974- 92). See Table 2.

8. MainFindings and Recommendationsof Consultants'Report on XCI'WS and XCS: (a) The Reportdetails its findingson the current stus of trainingat the two schools,including an assessmentof the qualityof trainingaccording to inteational standards. There is an evdent need for considerable improvementto safeguard investmentsin new highways and maintain the -95- AM=l

Table 1: ENROLLMENTAT XNJG CONmnICAToN. SCHOOL(1982-91)

Auto Auto Year of Highway& Transport trport main- Planning Traffic Pte- recruit- Bridge engi- finance & manage- tenance sttis- super- uiver- mont neeong accounting ment & repair tics vion dity Tota

1982 44 40 - 80 1983 40 40 - - - - - 80 1984 40 40 - - - - - 80 1985 80 80 40 - - 40 35 275 1986 80 80 - - - - - 160 1987 80 40 - - - - - 120 1988 109 93 41 47 - - 40 330 1989 146 - - 77 - - 40 263 1990 40 38 - - 85 - 40 203 1991 82 41 - 44 42 - - 210 Total 738 92 81 168 127 40 5 1.801

Source: Xiajiang CommunicationsSchool, 1993.

Table 2: ENRoLLMENTAT XINuJIAGCOMMUImCATIONS TECHNICAL WORKEs SCHooL (xCTws)

Highway Highway Highway construction construction construc- Auio Auto machinery machinery tion & % n- driving repair driving repair maintenance Total femae ities

1974-79 733 391 - - - 1,124 n/a 27.3 1980-89 2,462 1,201 236 194 - 4,034 n/a 42.7 1990 305 156 41 - 37 539 nIa 45.3 1991 286 157 - 39 40 522 10.3 50.5 1992 253 127 - 40 26 446 10.8 50.2 Totd 4.039 1.973 27Z 273 103 n6n/a 41A % femae (1991/92) 0.4 39.7 - - -

% minorities (1974-92) 51.1 21.4 42.2 57.9 -

existinghighway network at an opertional level. (b) The XCSis situated,along with the XCTWVS on contiguoussites with a total area of 40 hectares(100 acres). Since1985, the two schoolshave been run separately,both underthe XCD. Basedon the courseswhich need to be taught, the equipmentrequired for such courses,and the spaceand staff availabilities,this situation is highly inefficient. It is a major recommendation of the Report that the training capacity of the rngion ad - 96 - A f I

thesector stands to benefitfromthe two schools progressively coming under a single overallmanagement, though In two differentfaculies provng programsat differentlevels of technicalspecialization.

(c) A numberof detailedrecommendations on equipmentto be used for ttaining purposes are made; most importantiythere should be a rationaliwaon of purchasingand use of eqwpmentbetween the two schools.

(d) In order to make ationaluse of the resourcesavailable for those purposes, and to avoid overlappingof related activities,Highway Maintenance traimng should (i) be emphaized throughshort courses;and (ii) shouldbe managed jointly by the two institutions. The shortcourses recommendedwould cover refreshertraining for HighwayMaintenance Directors, Civiland Mechanical Engineers and Supervisors. Short-CourseTraining would also be provided for HighwayMaintenance Technicians, Team Leaders, EquipmentOpetors Plant/VehicleMechanics and Drivers (all fields).

(e) A detailedprogram should be designedfor the traWinngof trainersfrom the two schools, both at overseas sites and on-the-job. This would likly involve periodic input by foreign experts at the two schools (23 person- months ovei 4 years), in order for the taining to proceed with the new (or comnbined)equipment to be financed under the InstitutionalStrengthening Componentand for them to overlap with Chinese experts and tainers and collaboratein developinginstructional materals for use in short courses.

PAT 3 - TRAiNIG PROGRAMOF LNSTIuFloNAL STRENGTHENNG COMPONENT

9. Training programby institutionsto be strengthened(by locationand cost of training).

(a) Table 3 summarizes training programs for each of the institutions to be strengthenedby subject matter, location (withinXinjiang, other China, and abroad), number to be trained and correonding person-months and estimated cost.

(b) It is a priority of the training program design at whenever training is available in China, either in Xinjiangor in other Provinces, this would be a preferred location over shorter term overseas study tour. As a result of the priority given to this local and nationaltraining, 89 percent of personnel undergoingany kind of skills upgrading are to be trained within China. Training within Xinjiangwould be short term but more broadly accessible and more likely to be hands-on. Similarly, the more advancedbeneficiaries from longer-termtraining in other parts of Chinaor those havinghaa access to advancedoverseas training, would assist selected Chinese and Foreign experts in the "operational"training (appliedresearch) of theless advanced - 97 - ANNIX 1

tmainees. This would have the advantage of enabling an institute to undertake a specific study (analysis or survey) under the supervision of experts in the field, using that opportunity to top up the taining of staff members through an actual on-the-jobtraining experience.

(c) The subject matters for Training fall into nine broad categoriesas follows.

(i) taining in general highway and bridges planning, design and engineering;

(ii) more specalized training in high-gradehighway construction;

(iii) training in highway maintenance,including needed equipment;

(nr) Traffic engineeringand highway/trafficcontrol and safety;

(v) Transport Economics,Planning and Management;

(vi) Environmentalprotecdon;

(vii) Project Management sills, including Manpower/Labor and personnel management,Financial affairs and Computerskills;

(viii) Management of Training institutes, in particular the use and managementof audio-visualequipment; and

(ix) English-Chineseinterpretation.

(d) The costs of training in Xinjiang,in other parts of China and through Short Study Tours abroad are based on the unit costs detailed in Table 4. These costs were agreed to V the PEO and appraisal mission. Tdb 3: COST TIr ;mum( r E twuc

Loocationat tmin d cost No. Opnizdion XIIm e China y abroad Short-iAdy TOa c" N P/M Yuan Fo1ign N PM Yuan N PM W oin" yu S Convert ForEig excbaagc& N P/M S urnS excag (5 (%)

I XCI) (RB) 40 40 69,600 - 45 135 3S0,958 3 9 65,56S 5 4 36,120 420,SS8 101,68S 1S0,025 68 2 PEB (IS) 104 73.5 124,323 - 66 84 28S,337 22 46 3S7,146 39 20 180,600 409,660 S37,746 54,833 92 3 ESO (superv. tng) 100 100 214,600 - 36 42 146,230 21 22 200,190 - - - 360,830 4 XHAB 200,190 241,66S 83 XHAB(IS) - - - 27 33 114,246 7 13 105,931 6 5 45,150 114,246 151,081 164,213 92 Hway NetworkM ain. la 184 141 28S,418 - 100 100 378,160 2S 40 327,020 1 O.S 4,SIS 663,578 331,53S 407,808 81 Subtoal 184 141 285.41S 127 492.40 32 S3 432.951 2 S.S 49.66S 7A724 482.616 72021 84 S XCS \0 IS - - - 8 25 60,830 ------60,830 - 6,992 0 uS 128 128 674,688 212,500 12 26 77,279 3 6 46,950 2 1 9,030 7SI,967 268,480 3S4,913 76 Subtota 28 128 674.6U8 2122500 Q 51 138.109 3 46.950 2 1 9.030 812.797 268.480 361.9MM 74 6 XCIWS (IS) 131 148 674,688 212,SOO 15 26 98,321 3 6 46,95') 2 1 9,030 773,009 268,480 357,332 7S 7 XHPSDI(IS) 10 10 37,816 - 4 4 15,126 11 27 204,267 1 C.S 4,S1S S2,942 208,782 214,867 97 8 XTSI (IS) - - - S 10 27,319 7 19 141,4SI - - 27,319 141,4S1 144,591 98 9 RoadSafetyTung(IS)/c 320 320 353,800 25,000 4 4 1S,080 11 11 99,330 - - * 890,880 124,330 226,730 SS 10 Other Orgaizaion (IS) 206 104S 282,199 - 31 73 192,780 8 17 133,02S 14 7.S 67,72S 474,979 200,750 2SS,34S 79 I"2 1.06S 2.717.132 450.000 353 S62 1.761.666 121 216 1.727.825 70 39.S 3.S S.000.798 2 S34.510 -.L10 82

Note: (IS) Intttonal Staing (US) Inenive Instittonl Strensiheing.

fr ighway Nawork Maintenane cd 4 pe-onron sudy abkeadfor HigbwayNetwork Maenenc Study. & Includescost of forig exets in US dolam Iclubdss 24 persoDomobhof techncal mpport for reaarch ad analysisof traffic safetydata.

Somroe:XCD, Pnject Execudt Office, Taining Unit, November1993 ($1 - Y 8.7). -99 -ANN

10. Training CostAssumptions.

Table 4: TRA1NG COSTASMFmIoNs (costper person-month-US dollars)

Location Of Lengthof training(months) training 1 2 3 4 5

Xnjiang/otherChina 652 471 450 410 360

Chinese experts lecturing in Xinjiang 370 - - - Short-termtraining abroad 9,227 7,825 7,358 7,124 7,000 Awarenessinvesti- gationstudy tour 9,030 - - -

Sovrce: Agreedto by PEO and appraisalmission. -100-

TERMSOF REFERENCEFOR THE XMNJIANGIGHWAY NETWORKMAINTEANCE STUDY

This mnnexis a summay of the terms of referencefor the highway maintenancestudy in XinjiangRegion. More detailedterms of referenceare availablein the projectfile. Beneiaq Agency: XinjiangCommunications Departnent (XCD) Objecdves: Recommendationof a comprehensiveplan and actionprogram implementinga sustainableroad managementsystem as part of XCD programmingand budgetingprocedures, covering all road main:.ianceand ehabilition, bridge maintenace, and taffic monitoring.Also, the studyaims at recommendingan institutionalstructure for implementationand appropriate policiesto ensuresustainability of the investment. scope of Work: The Study Team should make full use of existng studies, maps,statistcs, and the ChinaPavement Management Systems (CPMS)recently introduced by MOC. The studymethodology shall be adapted to the use of the CPMS as well as the HighwayDesign and Maintenance Model (HDM-Ill) to analyze the vanousimprovement alternatives. All availabledata, and the additionaldata to be collectedfor the study, shouldbe prepared in a format suitableior the CPMS and HDM-M model. The moe of the Study will comprisethe following tsks:

(a) Currentmaintenance setup and practices; (b) Roadinventory;

(c) Trafficvolume survey to determinepresent traffic on al road sectionsincluded in the study;

(d) Axle load survey to determinethe loads to which the pavementsare subjected;

(e) Road condition survey to determine the eisdng conditionsof roads; - 101 - ANNEi 2

(f) Deflectionsurvey to help determine the structurl strengthof road pavements; (g) Dynamic cone penetrometer(DCP) survey to help computethe structuralnumber (SN) of pavements; (h) Roughnesssurvey to provideup-to-date and corred data on presentroad conditionsand to correlatethe existng road conditionsurvey data; (i) Study of past financial resources for highway maintenanceand projectionof resourcesto the year 2000; Oj) Developmentof an inmprovementprogram for the period up to the year 2000;and (k) Studyof institutionalsetup for futureimplemention of varioustypes of highwaymaintenance (routine, periodic, rehabilitation,reconstruction), including carrying out of maintenanceworks by contractorsand identifiaton of trining needsof personnelin maintenanceopations as well as identificationof equipmentneeds for highway mantenance.

Outputs: (a) An -iception Report within two months of the commencementof the Study. (b) FinalReport within 15 monthsof the commencementof the Study.

(a) About 10 person-monthsof eerts in highway maintenancein generaland CPMS in prdcular to be providedby the ResearchInstitute of Highwaysof MOC in Beijing. (b) Sevenperson-months of foreignexpertise of which: (a) 3.5 person-monthsof are by a seniorhighway engineer, (b) 2.5 person-monthsby a tansport economist,and (c) I person-monthby a highway organizationand maintenanceepert. -102- AM2

Tietable:

Foreignconsultants to be selectedby: Septmber 1994 Draft Final Report December1995 Final Report March 1996 - 103 - ANNEX 3

ROAD SAFETY IMPROVEMENT

1. The accidentsituation in Xinjiang(as in other provincesin China)is serious. A total of 4,077 accidentswas reported in 1992, which is not high, but this may reflect a low degree of reporting of accidents, especiallyin rural areas. However, the number kled (1,364) and injured (2,268) is high, and the rate of 82 killed per 10,000 motor vehicles (or 54 killed per 10,000 motorvehicles if motorcyclesand tractors are included) is high and is about 20 timeshigher than that for Western European and North American countries. Also, the severityrate (38 percent), definedas the number killed dividedby the total number klfled and injured is also high.

2. Due to this situation,the Bank engaged the services of a Norwegianroad safety expert under Norwegian Trust Funds, to study the topic, identify the problems, develop a generalized program for tackling the road safety problem and define a component for inclusion in the proposed project. This expert visited Xinjiang in April 1993 (preappraisal of the project) and November 1993 (appraisal of the project) and submittedhis final report in December 1993. This report forms the basis for the contents of this annex.

Insxtitutons Involved

3. Roadwaysafety is a complexsubject involving many issues(driver, vehicle, road, environment,engineering, education, enforcement, attitudes and behavior, etc.) and many entities. The Traffic Police Team of XinjiangPublic SecurityBureau (PSB)has the major role. It is responsiblefor vehicle testing and licensing, driver training and testing, traffic law enforcement,information and education, collectionand treatmentof accident data, and installationof road traffic signs and markings. In each prefecture, there is a Tfflic Police Branch (total of 16 includingone in the city of Sihezi) and in each county, there is a Traffic Police Brigade(total of 84). Each brigade has a Traffic Police Squadron, which is responsible for the managementof tffic as well as propaganda. The traffic police force in Xinjiang consists of about 2,030 police officers and policemen. The Xinjiang CommunicationsDepartment (XCD) is responsiblefor design, constructionand maintenanceof highways. Also, the Traffic Science Institute, when asked by Public Security, undertakes vehicle testing and studies of accidents. Hospitals treat accident victims and ambulanceservices transportvictims. -104 - ANNEX 3

Existig Conditions and Problems

Collection and Tr atment of Accident Data

4. All fatal and injuryaccidents as well as accidentsinvolving property damage of more than Y 1,000 must be reported to police. Althoughall county police stations ar equipped with telephones,there are few telephonesaLong the roads, especally in remote areas. Also, the jeeps used by police do not have communicationequipment.

5. Xinjiangreceived from Beijing in September 1993 a complete new system for collectionand treatmentof accident data. Implementationof this system in Xinjiang stated in November 1993. One engineer was trained for one month in Beijing in use of the system. HIein turn trained staff at the prefecturelevel, who in turn trained staff at the county level. Computershave been deliveredto all prefectures. The new system operates in a similarway as the MAAP system from TfRL(Britain). Accidentdata are collected by the police at the scene of an accident using an accident form which is precoded for computertreatment. The county police brigadeswill collect the forms and forward them to the branches (prefectures)every month. The accident forms are read opticallyby the computer at the branch level. Only a few items and illegible signs have to be entered manually in the computer. The data is further transferred to the centrat Police Team computer via telephonelines and the forms are stored at the branches. The information will be transferred to the highwayauthorities both at prefecture and central level, and the highwayauthorities may consult the accidentforms for more detailedanalyses. Moreover, the accidentdata base will be open to all institutionsincluding XTSI. Generalinformation on road accidents will still be transmitted to the Xinjiang Regional Government, the Xinjiang CommunicationsDepartment, and the Public SecurityHeadquarters in Beijing.

6. It remains to be seen how the new system for collection, transfer and treatmentof accidentdata would work. The geographicaldefinition of accidentsites may be a problem on minor roads, as kilometerposts are erected on major roads only.

Law Enforcement

7. Law enforcementis carried out by the Traffic Police Squadronson the basis of: (a) the Ordinanceof Highway Traffic Control of the People's Republic of China, (b) Xinjiang-UygurAutonomous Region's Enforcementof the Ordinance of Highway Traffic Control, (c) Regulationson Highway Safety Managementissued by the Ministry of Public Securityin Beijing, and (d) PunishmentOrdinance of Ministryof Public Secuity in Beijing. Most law enforcement seems to be concentratedon congested city streets where the duty can be carried out withoutvehicles and withouttechnical equipment. Also, there are volunteers(who do not have police authority)who assist police in the regulation and monitoringof traffic on busy city streets. However, the total number of police (2,030) is small for a Region of the size of Xinjiang and hence, the law enforcementcapacity is limited. For TUDH, a new police branch with two brigades and five squadrons will be established. But no final decisionhas yet been taken on this issue, or who will pay for the - 105- ANNEX3 policeforce and whowould be adminisrativelyresponsible for it, thoughtechnicaluly this forcewill be directedby the GeneralPolice Team. 8. Trafficpolice officers have a basic trainingof six months,including only two to three months specializationin traffic and vehicles. This is not adequate. Moreover,as there is little or no knowledgeabout accidentcreating factors, there is limitedpotental for trafficpolice to concentratetheir enforcementtasks on high nisk elements.Each trafficpolice squadron is providedwith onejeep with no communication equipmentor other equipmentfor speedenforcement or enforcementof drunkendriving regulations. Old breath analyzersare no longerin use, and althoughthe hospitalshave equipmentfor testingthe blood alcohol content, they are nevercalled upon. No equipment is availablefor vehicletesting on the road. In addition,although the use of heimetsfor motorcycleriders is compulsory,this equipmentis systematicallyneglected, even by the police. VehicleTesting and Control 9. Vehicletesting is carriedout by the policeaccording to the Ordinanceof HighwayTraffic Control in the People'sRepublic of China. Testingis undertakenby 17 vehiclemanaging offices; one in eachprefecture plus one extra in eachof the city of Sihezi and TachengCounty. Thereare 15 fixedtesting stations (of which8 are in Urumqi)and 15 mobilestations. These stations are run eitherby the policeor publiccompanies. Each fixedstation is mannedby approximately15 peopleand seems to be wellequipped. Four newvehicles equipped for vehicletesting were acquired in 1993. Thesevehicles wil be used for the regularcompulsory vehicle testing in remoteareas.

10. All motorvehicles must be testedonce a year. Busesand minibusesmust be testedfour times a year. All vehiclesmust be testedbefore being registered for the first time. Policeis alsoinvolved in the testingof vehicleswhich have been involved in serious accidents.Vehicle testing costs Y 60. Vehicleswhich pass testingreceive a stickerto be placedin the upperright handcomer of the windscreen.Only 40 percentof the vehicla and 35 percent of the motorcyclespassed testing at the main police testing stationin Urumqiin 1992. The rest had to have somerepair beforethey were passed. Repairs couldbe completedat publicor privaterepair shops,which are inspectedby police,but this inspectionis not carriedout regularly. Due to the difficultyof gettingspare parts, policein somecases allow up to six monthsfor repairsto be carriedout. This reducesthe erfectivenessof the testingprogram to ensure that vehiclesare road worthy. Testing stationskeep their own records,but recordsare neithercomputerized nor communicated to the GeneralTraffic Police Team. 11. Testingseems to be concentratedon the use of modemand sophisticated equipment. However,not enoughattention is given to visual inspectionof vehicles, especiallytires. Visualobservation indicated that few vehiclesin Urumqihave stickers, whichcould mean that controlis not strict or else the stickersare of bad qualityand fall off windshields. Moreover,inadequacy (or lack) of trainingof vehicleinspectors is probablythe weakestlink in the vehicletesting chain. - 106 - N 3

Dr -er Training

12. Training for a driving license, whether for a small car, bus or truck, takes four monthsand costs Y 2,000 which is several monthssalary for a new truck driver. The course consists of one month (260 hours) of theoretical training on regulations, vehicle mechanicsand vehicle repair, and three months (720 hours) practical training. Practical training consists of one instructor with eight trainees in each vehicle. Police set the requirementsfor driving schools which are the same for the whole Region as well as the number of trainees to be accepted. The police runs 13 driving schools in Xinjiang of which 12 are in Urumqi. Four of these are for private cars and the rest are for trucls and buses. Moreover, XCD runs three schools in Urumqi and seven in other parts of the Region.

13. The vehicles used for training are on the average very old and do not meet the requirements, especially in driving schools in rural areas. Moreover, there is a constantneed for more equipment. Also, the competenceof some of the instructorsis low and requires upgtading. In addition, teachingmaterial is available in Chinese and Uygur languages,but they are not providedfor other minoritylanguage groups which aboundin Xinjiang.

Information and Education

14. This is carried out by the traffic police squadrons using 12 officers in Urumqi and 146 officers in the rest of the Region. However, none of them is full time or has traiinig in the areas of traffic safety informationand education. These officers visit schools and companies to promote roadway safety, train some teachers in road safety so tat roadway safety can be taught to school children, run a 10-minuteprogram on radio twice a week, and distributeleaflets on roadway safety twice a week.

15. The informationmaterial is developedwithout much knowledgeon how to teach children. Programs are not focusedbecause there is litde concrete knowledgeabout high risk groups or high risk situations.

Road Ifrstructure, Signing and Markings

16. XCD is responsiblefor the signing and marking of new roads. But, this must be acceptedby the police. Thereafter, police is responsiblefor signingand marldng of all roads in the Region. The police has a specialdivision for this purpose, consisting two officers for the whole province. Both XCD and police report that they inspect signs and markings at regular intervals. The current condition of signing and marking is far from satisfactory. The police recognizesthat they do not have the required competence for ftis task and would like to transfer it to the road authorities. The Ministry of Public Securitysupports the police on this issue, and the questionis being discussedin the central government. It is hoped that the Ministry of Communicationswould agree to take over the responsibilites in 1994/95. However, in case of TUDH, there L an agreement betweenthe polil : the PEO that the PEO shall be responsiblefor signingand marldng. - 107 - ANNEX 3

17. No regularconstruction or maintenanceof roadsis doneon thebasis of road accidentoccurrences. Also, there is no uniformityin the placementof signs. Somesigns use symbolswhereas others use writing. This is not adequateespecially in Xinjiang, wheremany languages are in use. Manysigns are in poor conditionand someare barely readable. Rescueof AccidentVictims 18. No agencyhas got the clearresponsibility for transportingaccident victims. The policedo not havecommunication equipment to contacthospitals which normally have ambulances. Consequently,hospitals are seldomcalled by police. Oftenpolice asls a passingvehicle to bring the injuredto hospitals. Suchdrivers do not have the required training,and their vehiclesare not equippedto take care of injuredpeople.

Proposals

Iositutional Changes 19. It is recommendedthat responsibilityfor road signingand marldngsbe twanserredfrom Public SecurityBureau to XCD. In this way, XCD wouldhave full responsibilityfor all trffic controldevices (it is alreadyresponsible for signals)which is the case in most industrializedcountries. The highwayauthorities already canry out a surveyof road signsevery year, and it wouldbe relativelyeasy for them to take care of signsand markingsas part of their ongoingmaintenance activities. Althoughboth XCD and PSB supportthis idea, its implementationwould require changes at the nationallevel (see para. 16). However,irrespective of whichagency will be ultimatelyresponsible, there is a needfor trainingof personnelin the managementof road signs and markings. The proposedproject includes a one-monthstudy tour abroadfor the personin chargeof signsand markingsin the Region.

AccidentData Collectionand Treatment

20. In viewof the new systemfor collection,transfer and treatment of accident datawhich is beingintroduced in Xinjiang,there is no needfor assistancein thisfield for the time being. BlackSpot Improvements

21. It is wellknown that physicalimprovements to spotswhere many accidents occur(black spots) have a highbenefit/cost ratio. Consequently,it wasagreed that a pilot project on black spot improvementsin one prefecturein Xinjiangbe includedin the proposed project. Two engineers should be trained in this technique, including identificationof blackspots and analyses of data, planningof improvementsand before and after studieson road user behaviorand accidents. It is suggestedthat they follow an existingtwo-week course in accidentinvestigation in Englandwith two weeks practical trainingin a localBritish road administation.It shouldbe pointedthat the pilotprogram - 108- A= mustnecessarily use old accidentdata and does not have to wait for new data Up to about20 blackspots would be improvedand before and after studiescaried out by XIS1 in cooperationwith the BeijingTraffic Science Institute. Onthe basisof the resultsof this pilot program,XCD wouldconsider expanding the programto otherprefecus, as well as the establishmentof a specialroad safetyunit in the HighwayAdminisrion Bureau to takefull-time responsibility for theregular identification and improvement of blackspots and to initiateand developsafety audit proceduresand other road safetyacdvities for applicationin the Region. Law Enforcement

22. General police enforcementof traffic rules and regulations,especially enforcementof speedand drunkendriving, have been foundby developedcountries to 1tz amongthe mostcost efficientroad safetycountermeasures. The proposedproject includes the followingmeasures to improvelaw enforcement: (a) trainingof: (i) 200 squadronoffices and 80 branchofficers for one-month course in Urumqi in road traffic legislation,traffic law enforcement, accidentand incidentmanagement and road signs and markings;(ii) 40 officers(to be assignedto TUDH)for a one-monthcourse focused on high- grade highways;(iii) 8 officersat the prefecturaland regonal level for a one-monthstudy tour in the areas of planning,policy and opentionswith four officersto be trainedin other provincesin Chinaand the remaining four officersto be trainedabroad; and (iv)4 officersresponsible for vehicle tsting, drivertraining, information and propaganda for a one-monthstudy tour abroad. (b) provisionof followingequipments: (i) one-speedradar for each Police Branchfor speed enforcementpurposes, 10 radars for TUDH, and two radarsfor XTSIfor researchwork; (ii) alcohol testing equipment for use on TUDHas wellas on otherroads; (iii) two vehiclesto be earmarkedfor the enforcementof dnmkendriving and speedingviolations; and (iv)a portable roller brale testerto test brakesof vehicles. Rescueof AccidentVictms

23. Lack of communicationfacilities and weakorganization appear to be the weak links in the rescue of accidentvictims. The proposedTUDH would includean adequateradio communicationsystem. Also, the proposedproject includes purchase of ambulancesand patrol cars whichwould help in this regard.

Research 24. XTSI is presentlythe main agency concernedwith accidentresearch in Xinjiang. Referencehas beenmade in previoussections of thisannex to specificstudies -109 - ANNEX to be undertakenby XTSI such as before and after studies related to accident black spot work. In order to encouragesuch researchand to improve the competenceof the Institute, its staff should receive extensivetraining. An effective way of achievingthis training is througha twnning arrangementwith a qualifiedinstitute in an industrializedcountry. This could considerablyreduce the time necessaryfor XTSI to becomea fully qualifiedinstitute in road safety. However, becauseof the relativelyhigh cost of such an arrangement,XCD did not agree to include it under the proposed project. However, it would try to attract grant funds through bilateral agreementswith foreign donors. In the meantime, XCD agreed that XTSI shall enter into cooperationwith Beijing Traffic Science Institute. The total effort involvedis 24 person-monthsspread over four years at an average of 6 person- months per year.

Other Areas

25. The existing level of activity in Xinjiangin driver training, vehicle testing and information and education is relatively high. Consequently,improvements in these areas were given a lower priority. However, the proposed project includes training to some police officers responsiblefor these activities in order to improve their skldlsand widen their horizons. Also, the proposed project provides for institutionalstrengteing of the Xinjiang CommunicationsSchool which helps train drivers. cost

26. The total cost of equipmentand trainingincluded in the proposed project is about $623,000of which $398,000is for equipmentC(able 1) and $225,000 is for training and technical assistance (Table 2). In addition, about $690,0000for the pilot black spots program is included in the cost of civil work for the proposed project.

Table 1: COSTOF EQuIPMeNFOR ROAD SAnT

Number of units Equipment General TUDH Total police work

Speed radars 16 2 18 Alcoholtesting equipment 1 2 3 Vehiclesfor the policre 2 - 2 Roller brake tester -1 1 Other equipment To be identified during implementation TO1 Cost ($'000) X3 mplemenation Program 27. Table 3 presents the implementationschedule for the safety component. It is envisionedthat five years will be required for implementation. -110- ANNEXa

Table 2: Cosr OF TRAINIG ANDTECDNJCAL ASSSTANCE

Item Numberof person-months

(a) Blackspot improvement (abroad) 2 (b) Road signsand mariangs(abroad) 1 (c) Vehicletesting (abroad) I (d) Drivertraining (abroad) 1 (e) Informationand propaganda (abroad) 1 (t) Alcoholand speedenforcement (abroad) 1 (g) Law enforcement- squadronlevel (local)La 200 (h) Law enforcement- branchlevel (local)La 80 (i) Law enforcement- TUDH (local) 40 0) Law enforcement- high rank (abroad) 4 (k) Law enforcement- high rank (China) 4 Subtotal Technicalassistance: fromBeijing TrafficScience Institute to XTSI 24

atal (No. of Person-Months)

TotalCQt ($'000)La 2

LA Doesnot includecost of accommodationand subsistencefor the courseparticipants. This cost will be paid by PublicSecur.^y Bureau. - 111- AN= 3

Table 3: m mITAnON SCHIDULEFOR ROADSAnf IMPROVmEtm

Item Yeav 1 Year 2 Tear 3 Year 4 Year 5 black spot improvement (2 a-=) Road signs and markinge (1 =-m) Vehicle testing (1 m-rn) Driver traslmng (1 in.) Inforoation and propaganda (1 r-r) Alcohol and speed enforcement (1 r-rn) Law eaforcement - squadron level (200) Law enforcement - branch level (80) Low enforcement - TUD8 (40) Law enforcement - higb-rank polite officers (4 In Chlas, 4 abroad)

2-speed radars for the XISI ------16-speed radars for the prefectures 10-speed radars for TUDH Alcohol testing equipment for the TUDH Alcohol testing equipment for the polie 2 ordinary vehicles (station wagons) I roler brake tester for TUDH and the highway network

Black Snot Imnrovement Analysis of data from one prefecture Planning of improvements mu Implementation of improvemeats Vonitoring of pilot improvemeats aesrch - - 112- A

TERMSOF REEORENCEFR T'1 XMNJIANGINTERCITY AND RURAL PASSENGER TRANSPORTSTUDY

This annexpresents a summaryof the termsof referencefor the studyof intercity and rurl passengertransport in XinjiangRegion. More detailedtenns of referenceare availablein the projectfile. Bendedary Agency: XinjlangCommunications Department Objectives: To assistthe Govemment of XinjiangRegion in reviewingand identifyingthe present and futureproblems of the intercityand rural passenger transport sector, and in organizing and providingthe necessarynew and urgentlyrequired provisions for improvementof the performanceof the sector in view of the marketeconomic development in the Region. The Study shall identify and make specific recommendationson the variouscorrective measures required. Scopeof Work: The Studywill identifyand analyzechanges in the Region's policies,which are expectedto have a significanteffect on improvnngthe performanceof the intercity and rural bus transportsector in theXinjiang economy. To accomplishthis, the Studyshould include but not necessarilybe limitedto the followingitems: (a) The organizationof the in.ercityand rural bus transport sector,including profile of ownership,company structure and management; (b) The framework of economic regulations, transport regulationsand technicalregulations under which the sector operates, among them general economic regulations,licensing for carriageof passengers,price setting, road user taxation,regulations on import and technicalspecifications of vehiclesand enforcementof road trafficlaws and regulations; (c) The demandfor intercityand rural bus transportup to the year 2000, includingits sea anal, geographicaland - 113 - ANNEX4

travelpurpose characteristics, and the extent to which the demandis being met;

(d) The operations of the intercity and rural bus transport, includingmarketing, passenger transport terminals, fleet characteristicsand udlization, maintenanceand repairs, costs and pricing of bus services, competitionwithin the sector, complementarityand competition with other modes, and mixed transport of passengersand freight;

(e) Legal and administrativecompetence, effectiveness and cost of Governmentagencies which makeprovisions for, monitor, manageand control the intercity and rural bus transport sector;

(f) The rationalefor and experiencewith state enterprisesin intercity and rural bus transport, with particular reference to the Xinjiang Regional Passenger Transport Company;and

(g) Training in step with the ongoingreform process and the ambitions to restructure state owned bus companiesas well as the question of improving managerial skills should be addressed. The study should establish the need for and the interest in carryingout plannedtraining programs for the various types of companies.

(h) Developmentof policychanges for the intercityand rural bus transport sector and their analysis in terms of their (i) effect on cost, performanceand quality of service of intercity and rural bus transport and othse. -odes; (ii) effect on users; (iii) administrativecosts; (iv) nr'ks; and (v) implementationobstacles and schedules.

Outputs: (a) An Inception Report within two months of the commencementof the study.

(b) An Interim Report within nine months of the commencementof the Study summarizingthe results of the surveys and preliminaryfindings and conclusions.

(c) A Final Report within 15 months of the commencement of the studysummarzing the work carriedout during the Studyas well as the justified recommendationsmade and the corrective measuresto be taken. -114- ANNEX4

Iputs: Five person-months of foreign experdse in the following disciplines: (a) transport economics, (b) bus transport industry, and (c) transport surveys and statistics. imetable:

Foreign consultantsto be selected by: March 1995 Interim Report December 1995 Draft Final Report June 1996 Final Report September 1996 -115 - ANNEXS

ENVIRONMENTAL ASSESSMENT AND ACTION PLAN SUtMMRY

A. BACKGROUND

1. An EnvironmentalAssessment (EA) for the Turpan-Urumqi-Dahuangshan Highway(IUDH) was carried out by the Eco-EnvironmentResearch Institute of the Chinese Academy of EnvironmentalScience, which was appointed by Xinjiang CommunicationsDepartment (XCD). In September1992, an outlineof EIA for TUDH was reviewedand approvedby the NationalEnvironmental Protction Agencyof China. An EA report was preparedin December1992, and submittedto the Bankin February 1993. It identifiednoise, air pollution,water pollution, impacts on culturalrelics etc., as major potentialimpacts. The alignmentwas modifiedto avoid the ancient town of Wulapo,which has archeologicalsignificance. Subsequent to the discussionbetween the Eco-EnvironmentResearch institute and theBank dunng the preappraisal mission in April 1993,additional studies were carriedout on (a) migrationpatterns of Kazakhherders and other livestockmigration routes, (b) detailedcultural relics survey, (c) impactsof constructiontraffic, and (d) socialsurvey of the peopleaffected by resettement. Based on the results of the studies,the revisedEA, an EA Summaryand an Environmental ActionPlan (EAP)were submittedto the Bankin September1993, discussed and further modifiedduring the appraisalmission in November1993. The final versionof the EA, EA Summaryand EAP were submittedto the Bank in Jantlary 1994. Environmental aspectsof the linkingroads were reviewedbased mainly on the final engineeringdesign submittedto the Bankin January1994. 2. The processof environmentalreview involved inputs from vanous unitsin the Region,including environmental bureaus, research institutions and universities.The affectedgroups and NGOsalong the highway,and the peoplesubject to resement and landacquisition in particular,have been intensivelyconsulted. 3. Thepolicy and administrative requirements for envinmental assessmentof developmentprojects in Chinawere followed during preparation and evaluation of theEA, as wellas theBank's OD 4.01 on EnvironmentalAssessment. Major laws and regulations appliedto the EA for TUDHinclude: (a) EnvironmentalProtection Law of PRC;

(b) AtmosphericPollution Abatement Law of PRC; (c) EnvironmentalNoise Control Law of PRC; - 116 - ANNE S

(d) Water Pollution Control Law of PRC;

(e) Land ManagementLaw of PRC;

(f) GrasslandLaw of PRC;

(g) SafetyManagement Clause of ChemicalHazard;

(h) Management Guidelines on Environmental Protection of Construction Project, Number 003 (86), issued by the State EnvironmentalProtection Bureau (SEPB);

(i) Measures for Environmental Protection Management of Transport ConstructionProjects, Number 117 (86), issued by the Ministry of Urban and Rural Constructionand EnvironmentalProtection;

(j) Measures for Environmental Protection Management of Transport ConstructionProjects, Number 17 (90), issued by MOC; and

(k) ImplementationDetails of EnvironmentalProtection for Xinjiang Uygur AutonomousRegion ConstructionProject.

4. The environmental standards applied in the assessment are listed in Attachment 1 of this Annex.

5. The roads covered by the environmentalassessment were a new road betweenTurpan, Urumqi and Dahuangshanr[UDH; 283.3 Im, of which 101.3 km would be 4 lanes and 182.0 km would be 2 lanes and its linking roads (approximately16 Iam)]. The EA assessedimpacts on area within 1,000 m from each side of the highwayand with the time frame up to 2018.

B. BASELE ENIRoNNMENTALDESCRIPION

6. Topography and Clmate. TUDHpasses mainly alluvial plain, i.e., Turpan Basin, BaiyanggouMountainous Area of Tianshan, Caiwopu Basin and southern part of Junggar Basin. Only BaiyanggouMountainous Area is mountainridged and hilly area with dense secondaryshrub forest. Xinjiangis locatedin the seismic belt of Northern lTanshan where earthquakesoccur most frequentlyin China. Situatedin the central part of Eurasa and remote from oceans, the Region has a typical continentaldry climate marked by hot summers, long and cold winters, low precipitation, high evaporation, big differences of annual and daily temperature, large ranges of temperature in springs and falls. The highwaystretches two climateregions. The Turpan-Urumqisection belongs to the Turpan Region, warm temperate arid region of southern Xinjiang, while Urumqi-Dahuangshan secdon belongs to the DabanchengRegion, temperateand region of northern Xlnjiang. -117-1 ANNEX

7. Economic Situation. The highwaycrosses the TurpanRegion, UrumqiCity and ChangjiHui AutonomousPrefecture from south to north. These are the importantkey areas of economic development of Xinjiang, and many large and middle size key industries, mineral enterprises,energy bases, agriculturaland husbandryprocess basesare located along the proposed highway. The populationin the area along the highway is 2.1 million. Located in economic key belt with Urumqi as its center, the region has been developing its agriculture faster than other regions of Xinjiang. The constructionof the highway will acceleratethe social, economicand tourism developmentof these regions as well as Xinjiang economyin general.

8. Water Resources. The regionhas three main water systems,Dabancheng's Baiyanggouof Tianshan,Northern Slope of Tianshan, and Urumqi River. BaiyangRiver water system originatesfrom the southern slope of Bogda Mountain, and the greater part of the river flow goes to the Turpan basin via Baiyanggou. About 30 kanof the alignment of the eastern section goes along the BaiyanggouRiver Valley. Urumqi River water systemlocates between the northernand eastern sectionsof the highwayand does not cross the proposed highway. The northern sectionpasses the water systemof Tianshan's north slope. While the majorityof water in this water systembecomes groundwater and crosses the highway in the form of groundwater, there are many irrigation channels crossing the highway. Water quality of these water systemsis good.

9. Biotic Resources. The fisheryand aquatic resourcesare mainlylocated in the water areas of CaiwopuLake, YanhuLake within the CaiwopuBasin, and will not oe affected by the highway. The major forest resourcesalong the highwayare locatedat the Baiyanggousection and are secondaryshrub forests of river valley. The highwaybypasses the CaiwopuEcological Forest, which has 800 hectare of artificialforest. There are some artificiallyplanted trees in the other parts along the highway,most of which are poplarand poplar bolleana. The main zonal grassland vegetation is desert with shrubs and semi- shrubs. According to a comprehensiveinvestigation on the wild animals in the related areas, there are no precious or endangeredspecies.

10. Air Quality. Ambientair quality was monitoredat five points along the TuIpan-Urumqi section and at six points along the Dahuangshan-Urumqisection. The monitoring program included analysis of NOx, CO, TSP during a five day period of December 1991, January 1992 and June 1993. The results were generallygood. Five day average concentrationsof NOx and CO at all points were below the air quality standard (daily average), and five day average TSP concentrationsin points other than Wulapo, Dacaotanand Caiwopu were below the standard.

11. Noise. Along the highway,present acoustic environmentalquality is good in most parts. The backgroundpoise level is often less than 50 dB in daytime and less than 40 dB at night. Among twenty one noise sensitivepoints, the noise level of only he, WulapoRoad Entrance, TechnicalSchool of Turpan, and No. 20 Hospitalexceeded the standard, mainly becauseof the traffic noise of the existing highway and streets. - 118- ANNE&S

12. CulturaVHistoric Locations. Turpanis the well-knownhistorical city, and has significantvalues for historical archaeologyand tourism. The WulapoAncient City, locatedin the southern suburbsof Urumqi City, is testimonyto Urumqi's old history and containsmany culturalrunins and architecturesof Qing Dynasty. There are somehistorical remains along the highway, such as the ancient stone mounds dating from 3rd - 4th Century B.C. to 8th - 9th Century A.D. at Caiwopu,Wulapo and Ganhezi.

C. POTENTL ENVIRONmENTALIMPACTs IDENTIFIED IN THE EA

13. The following key areas of environmentalimpacts were identified, where adverse change may take place during the constructionand operationof the highway:

(a) Air Pollution. The most significantair pollution will be dust during the constructionphase and tail gas during the operation phase. Dust in the constructionphase is mainlycaused by transport of constructionmaterials, other earth moving activities, use of constructionvehicles, and emissions from asphalt plants. In the operationphase, the major air pollutantis NOx. Accordingto the predictionsin the EA, concentrationsof NOx, CO and HC correspondingto daily traffic will meet the standardat all sections till the year 2018. Also during peak periods of traffic volume, concentrationsof these items will generally meet the standardsin 1999 and 2005. But in 2010, concentrationof NOx at Miquan and Fukang sections will slightly exceed the standard and in 2018, both NOx and HC concentrations at Wulapo, Fukang and Miquan sectionswill exceedthe standardsand related criteria. However, according to the predictions, the periods when the standardswill be exceededare expectedto be very short (less than 2 percent of the year).

(b) Noise. In the constructionphase, noise impacts will le significant. The sound of blastingmountains and noise of constructionmachinery will affect life of local residents,especialy at night. Twenty one noise sensitivepoints were identifiedalong the highway,which include townsand cities, villages, enterprises and industries, etc.. According to the noise prediction in the EA, noise level will exceedthe standardat 7 points in 1999,9 in 2005, 11 in 2010 and 15 in 2018. In 2018, noise level is expected to exceed the standard significantly(more than 10 dB) at several points.

(c) Soil Erosion and Water Quality. Serious soil erosion will not happen if adequatemeasures are taken in the design and constructionphases. Surface water quality will become worse in a short period dunng the construction phase, which can be mitigatedby strict control measures. A large quantity of earth and stones may block the water flow of the BaiyangRiver, which will affect the nver water quality.

(d) Loe/Deterioration of Ecologically Sensitive Areas. The alignmentwas selected to avoid WulapoReservoir, Caiwopu EcologicalForest and other -119 - ANNEXS

ecologicallysensitive areas to the extentpossible to minimizeadverse effects on thoseareas. Due to the constructionof the highway,666 ha of grassland and 131 ha of farmland will be occupiedand 62,500 trees will be cut, which will affect agriculture, animal husbandry,and other ecological conditions. The effects on wild animals will be small.

(e) Cultural Relics. Xinjiang Research Institute of Archeology carried out comprehensiveinvestigations of cultural relics along the whole alignment. A detailedinvestigation by the exploratoryditch method was also conducted at the south area of the Wulapo Ancient City where the highway was plannedto pass. Accordingto the investigations,there is a low possibility that historicalreniains are buried undergroundin this area. There are some sporadicand medium/smallsized ancient stone tombs along the alignment, at Caiwopu, Wulapo and Ganhezi areas, which will be affected by the constructionof the highway.

(f) Soil Poiltlton. Soil pollution by lead from motor vehicles could affect crops along the highway. Present lead level in soil along the proposed highwayis generallywithin the backgroundrange. Accordingto projections during the EA process, lead level will become higher with the increase of traffic volume, but wi1lremain within the safety level in 2018.

(g) Social Disruption and Inpacts on Uvestock Migation. The highway will cause social disruption by separatingresidential areas, farmland etc., unless passagewaysare designedin an adequatemanner. A special study was undertakento identify migrationpatterns of Kazakh herders and other routes of livestock migration, and three sections in Fukang (about 15 kln), Miquan (about 8 kIn) and Urumqi (about 20 kIn) were identified as particuly important for livestock migration. Due to the transport of a large quantity of building materials, the traffic volume during the construction phase will cerainly increase, which could have an adverse effect on local communitiesalong the highway.

(h) Others. The probability of accidents may increase but will not be significant in the constructionphase. The risk of traffic accidents and accidentsassociated with the transport of hazardousmaterals will increase during the operationphase.

D. MUITGATIoNMEASUWES

14. The EAP, to be applied to rLUDHand its linking roads, stipulateshow the environmentalimpacts identified in the EA will be dealt with at the design, implementation and operation phases, and what administrativeanrangements have been made for the execution of the EAP during the three distinct phases. Major mitigation measures are highlightedbelow and summarizedin Attachment2 of this Annex. - 120- ANNEXS

15. Selectionof Alignment. The proposedalignment of TUDHwas selected amongthree altemnativeswith a view to avoid large residentialareas and ecologically sensitiveareas, and minimizerescttlement and otheradverse impacts on localpopulation. Accordingly,the proposed highway was carefullydesigned to avoidWulapo Ancient City, WulapoReservoir, Caiwopu Ecological Forest, the centersof Fukangcity, Ganhezitown and Dongshandistrict of Urumqicity and other environmentallysensitive areas.

16. Air Pollution. Duringthe constructionphase, adequate measures will be takento minimizedust pollution, such as watering,covering of transportedconstruction materialsetc. Advancedtechnology wil be adoptedfor heatingasphalt. Asphaltmixing sites will be carefullyselected to avoidadverse effects on residentalareas. Duringthe opation phase, public awarenesscampaign/education will be undertakento promote compliancewith trafficrules and tail gas emissionstandard. Tail gas inspectionwill be carriedout at toll stationssuch as Fukang,Urumqi and Turpan. Trees will be planted alongthe roadside,as appropriate,with a viewto reducingadverse impacts. 17. Noise. Duringthe construction phase, the construction work with significant noisewill be undertakenduring daytime (9:00 - 23:00)in the vicinityof residentialareas. Transportationof constructionmaterials will be undertakenwith carefulconsideration to minimizing noise impacts on residents along the roadside. Maintenanceof construction mahines and trucks will be strengthenedso as to keep them with low noise. Traffic management,including dissemination of trafficrules and settingup of speedlimits will be stegtee. 18. Residenceswhich are locatedin the vicinityof the proposedhighway and ar seriouslyaffected by noise, will be resettledprogressively. Constructionof new buildingswill be prohibitedwithin 100 m fromthe roadsideof class2 sections,and within 200 m in the case of class 1 sections. Soundbarriers will be installedin the Salt Lake ChemicalPlant section(400 m). Additionalsound barriers could be furtherinstalled in the future, as the need arises and as determinedfrom the results of the monitoring progam. Soundinsulating windows will be installedat two sections(Turpan Barracks and No. 20 Hospital)and forest belts will be constructedat three sections(Taipinqu Sidui, WenjiaoFarm and UrumqiBuilding Materials Plant). Thesemeasures as well as their costs are summarizedin Table 1.

19. SoilErosion and Water Quality. Slopeprotection and drainagefacilities will be constructedin order to protect soil erosion. Appropriatemeasures, either rehailitation or reconstructionwill be takenwhere the existingirrigation and drainage systemsare damaged. Excavatedearth and stonesin Baiyanggousection will be carried more than 2 km awa-tfrom the sites, in order not to blockriver flow and lower water quality. Septic tanks and sewagetreatment systems will be installedas appropriateat constructionsites and campsites. Sludgein sewagepurification pits will be disposedof periodically.Duing theoperation phase, sewage from service areas will be connectedinto local sewagesystems and no waste water will be dischargeddirectly into rivers or irigaion canals. - 121- ANNEXS

Table 1: NoISE MIGATION MEAsuRs OF SENSwIzE PomS

Nameof sites Mitigation Specification Cost (Y 1,000)

Taipinqu Sidui Forestbelt 100 m x 40 m (lengthx width) WenjiaoFarm Forest belt 120 m x 30 m (lengthx width) 93 UrumqiBuilding Forestbelt 200 m x 10 m MaterialsPlant (lengthx width) J SaltLake Chemical Soundbarrier 400 n. x 4 m 476 Plant (lengthx height) Turpanbarracks Soundinsulating 192 (opening) 1 197 No 20 Hospital Soundinsulating 194 (opening) l windows J

20. Los/egradation of EcologicallySensitve Areas. Woodland,grasand and farmlandwill not be acquiredfor borrow areas to the extentpossible. Following completionof construction,effort will be made to restore and use borrow areas as woodland,grassland and farmland. Constructionworkers will be educatedto protect natual resourcesand wildlife. Poachingwill be strictlyprohibited. 21. Culturd Relics. In Wulaposection, excavation will not be allowedwithin preservationrange of the ancientcity. The statusquo of the ancientcity will be stricdy maintainedwithout damage by the project. Historicalrelics along the highway,such as ancientstone mounds at Caiwopu,Wulapo and Ganhezi,will be removedor preserved carefully. Constructionworkers will be well informedof these historicalremaims and prohibitedto damagethem. The departmentresponsible for the culturalrelics will be notifiedimmediately if culturalrelics are foundduring the constructionwork. 22. Soil Pollution. To mitigatethe negativeimpact of lead on soil and crops, withina range of 50 m, it is discouragedto plant vegetableswith rhizome. The lead contentin soils,crops and herbagewill be monitoredonce a year in relevantareas. - 122 - ANNEXS

23. SocialDisruption and Impacts on LivestockMigration. Sufficientnumber of passageways (4 large, 17 medium and 82 small bridges and 575 box culverts and passageways)will be constructedto meet the requirementsof local people and vehiclesto cross the highway. Special considerationwas also given to the design of passagewaysin the Ganquanpu-Erdaogou,Caiwopu and Fukang sections where transmigrationroutes of livestock are mainly scattered.

24. Others. Management of transport of hazardous materials will be strengthened. Prior to transportation of hazardous materials, the Public Security Departmentwill examine the arrangementsand plans for their transport.

E. ENnMoNNrAL MOMORMNG

25. During the construction and operation of tL highway, environmental monitoring will be carried out to verify the actual impacts on the environment, identify unexpectedenvironmental problems at an early stage, and adjust environmentalprotection measures as appropriate. The project supervisiondivision of Xinjiang Communications Department will be responsible for environmental monitoring. Local monitoring departmentswill assist in carrying out the monitoring.

26. The key areas of monitoringare atmosphere,noise, lead contentsin crops, soil and herbage, water quality, wild animalsand trans-livestock,etc..

27. Atmosphere. Periodic monitoring will be carried out during both the construction and operation phases. Items to be monitored will include TSP in the constructionphase and NOx, CO, TSP and HC in the operationphase. Monitoringwill be carried out four times a year, for five-daycontinuous periods at adequatepoints during the construction phase, and three times a year, for five-day continuous periods at 7 monitoringpoints during the operationphase.

28. Noise. Periodical monitoringwill be carried out twelve times a year both in daytime and at night near constructionsites during the constructionphase. Monitoring will be carried out four ti nes a year at 12 points during the operationphases. Ad hoc monitoringwill also be undertakenas appropriate.

29. Other Items. Lead content in soil, crops and herbage will be carried out once before constructionstarts, and once a year during the constructionand operation phases at seven points. The productivityof crops will also be observedat the same points. Monitoringon water quality (BOD, SS and oil) will be carried out three times a year at the BaiyanggouRiver. Wild animals will also be observed three times a year in the Baiyanggousection. Grazing and migration of trans-livestockwill be monitored at two times a year at a few crucial sections. - 123- A S

F. ORGANIZATIONALARRANGEMENIS

30. The XinjiangCommunications Department (XCD) will be responsiblefor organizingproject feasibilitystudy, evaluating environmentalimpacts and developing EAP, coordinatingenvironmental management (EM) among responsible departments and constructionunits, guiding construction units to carry out EM measures,and periodically reportingproject EM activitiesto the XinjiangEnvironmental Protection Bureau (XEPB). Engineeringsupervision office under XCD will be responsiblefor routineenvironmental managementof the project, includingimplementation of EAP. Under this office, an environmentalgroup consistingof 8 staff will be established. This group will set up supervisionsections in Turpan,Urumqi and Fukang. Two staffwould be locatedat each sectionand wouldbe responsiblefor environmentalsupervision during construction and for monitoringenvironmental issues during both the constructionand operationphases. The remainingtwo staff wouldbe in chargeof overallcoordination of environmental aspectsof TUDHand its interconnectingroads.

31. XEPBwill be responsiblefor supervisingEM of thisproject, organizing and coordinatingrelated organizations to serviceEM, guidingcity or countyenvironmental protectionbureaus (EPB)to monitorthe environmentduring the constructionand the operationphase. Cityand countyEPB will be responsible,under the guidanceof XEPB, for supervisingconstruction units to carryout EAP, enforcingrelated laws and standards, etc.

32. In order to deepenknowledge and expertiseon environmentalmonitorng and protectionmeasures related to highwayconstruction and operation,training courses will be heldin Xinjiangin late 1994for personnelengaged in highwayplanning, design, constructionand management. Also, eight experts will be trained at environmental instituteswithin China for a periodof two monthsin early 1995. Moreover,two of those eighttrainees would be sent abroadfor an additionaltwo-months environmental training coursearound mid 1995. - 124- S Atbchment1

ENVIRONMENTAL STANDARDS ENVRONMENrALSTAARDS APPL iN ENvIRoNMNmTALAsSESSMm r

Standard Number

AtmosphericBackground Quality Standard GB3095-82 AmbientNoise Standard for UrbanAreas GB3096-82 MaximumPermissible Concentration of Atmospheric Pollutantsfor the Protecdonof AgriculturalCrops GB9137-88 FarmlandIrrigation Water Quality Standards GB5084-85 EnvironmentalQuality Standards of SurfaceWater GB3838-88 SeawaterQuality Standards GB3097-82 EnvironmentalVibration Standards in CityRegions GB10070-88 Lead and InorganicCompounds Hygienic Standards Atmosphere GB7355-87 Noise Criteriafor ConstrucdonSites GB12523-91

A,MET No= STANDAD FOR URBANARAS (GB3096-82)

Area Day Night db (A) dB (A)

Specialresidential quarters 45 35 Residential,cultural, and educationalareas 50 40 ClassI mixedarea 55 45 ClassII mixedarea 50 50 Industial zone 65 55 Sidesof trafic atery 70 55 - 125 - AN=N5 Attachmt 1

AMrENr Ant QUAMTYSTADARD (0a3095-82)

Items ConcentationLimits (mg/m3L ClassI ClassnI Classm standards standards standards

Suspended Dailyaverage 0.15 0.30 0.50 Particulate Spot sample/a 0.30 1.00 1.50 Matter(SPM) Dust Dailyaverage 0.05 0.15 0.25 Spot sample 0.15 0.50 0.70

SO2 Annualaverage Lk 0.02 0.06 0.10 Dailyaverage 0.05 0.15 0.25 Spot sample 0.15 0.50 0.70 NO, Dailyaverage 0.05 0.10 0.15 Spot sample 0.10 0.15 0.30 co Dailyaverage 4.00 4.00 6.00 Spot sample 10.00 10.00 20.00 Ozone Averageover 0.12 0.16 0.20 one hour Lead Maximum 0.0015 O.OO15 0.0015

Notes: (1) ClassI standardsare to ensurethat the ecologyand people'shealth are. not damagedover a long periodof time due to air quality.

(2) ClassII standardsare to protectpeople's health and the growthof plants and animalsboth in citiesand in the countrysidefrom any damge over a short or long periodof time due to air quality. (3) Classm standardsare to ensurethe normalgrowth of plantsand animals and protectthem fromchronic and acute poisoning. La Spot samplemeans concentration at any time. TX Annualaverage means the annualaverage of daily averageconLentrations. KEY ELEMbES OF THERAP FOR TUDH

Envi_onmnt Issues ActionTaken/To be Takn Responby Remads

A. DemPns 1. Route Seetion ITe alignmentwas wdectedfiom three alternativesto mkinimzeland acquishion,impacts of air XinjiangCon polution and noise on resdnl areas, as well as to avoid unfrvomblegeological conditio and municaons cultsral relics. Depa_tnt (XCD) 2. Social Disruption 4 lare bridges, 17 modicimbridges, 82 smaUbridges and 575 culvats were desined to meet the XCD requirementsfor transgrton of livestockand cossing of local poopleand vehbles. 3. Soil Erosion Trees and grass were designedto be plantedin the median, sideslopes,and alongthe road-side, XCD whee appropriae. Temporaryand permae drainage systemswere designedto minimizesoil erosionand alteration XCD of hydrologicalregimes. 4. Dust/Air Pobu- In additionto 1 above, most material borrow sites were identfied, taking into accountthe dust XCD tion probles at residentialareas.

5. Water Pollution Wastewaterf&om smece areas was designedto be dischargedinto local sewagedrainage systems. XCD ON 6. Noise In additionto I above, adeuuatemeasures such as resettlment, sound barriers, and tree planting XCD were idendfiedand provided for in the designand bid documents. 7. Flooding Bridgesand oulvets were designed to meet XCD requrements of safe dischargeof flood. B. Conluto

1. Dust/Air Pottu- All reasonablesteps, inoludingwatering, shall be takmento mWimizedust poUutionby constuction Contractor Technicalspeci- tion works, particularlyin places near towns, water sourcesetc. fications(TS) 102.15.6, Stockpies and storage areas shall be covered or wateredto prevan dust poUution. 102.15.8,20155 and Spoewciaondi- Trucks to transport cofntion materialsshall be coveredto minimizespilts. tions of Contc (SCC) 29 Asphaltmixing sites shall be located at least 500 m from residental areas on the Ice side of the wind direction. Asphaltmixers shal be equippedwith a dust ollector. t ^ EnvironmentalIsues ActionTaken/To be Taken Re ilit Remaks

2. Soil EAion/ Trees and gasses s be planed on skdope, and along the roadie, wheoeappropriate. Contractor Constructaccord- Watr Quality !q to desig Appriat measurs, ether rehabilitaion or reconstrction, shall be taken, if the exsting 1S 102.15.1, irrigationor drainagesystems are damaged. 'S 101.15.2, TS 202.09.1.2. In Baiyanggousection, earth and stone shall be caned more than 2 Km away from the excavation The Engineer sites, so as not to block river bed and cause adverse impactson water quality. superves accrding to the Temporarychanel or conduit shall be constructedfor irrigationand drainage, duringthe construc- above causes tion of permanentdrainage system. TS 102.15.2, TS 201.05.2, All necessary steps shall be taken to prevent earth and stone fiom siltingup river, water channel, IS 102.15.4, or the existingirrigation and drainage systems. 'S 104.01.3 Acoreasonable measunt soall be taken to preventdirect dischargeof pollutedwater from constuctin activitiesinto river and irrigationchannels. 3. Constuction Adequatemeasres, such as provisionof septictanks or sewagetreatment facilities,shall be taken Contractor TS 102.15.4 Camps a the construction sites, ly alongthe BaiyanggouRiver. Sludge in sewage TS 102.15.5 treatmentpits shall be disposodof regularly. T'S 104.01.131 Drinkingwater shall mect the China naional potablewdaer standard. GarbageshaR be colbectedin garbage cans at fixedplaces and disposedof regularly. 4. Noise Where residencesare locatedwithin 200 m from the constructionsites, noisy constructionwork Contractor TS 102.15.7 shaUbe undertakenduring the daytime(9:00 - 23:00). Such constructionwork shall not be SCC 29.2 undtaken during the night time (23:00- 9:00) as muchas possiblein Turpan city, Salt Lae ChemicalPlant, Wulapo, Fukangoity & Kashi East Road. Ma inteacof macines and trUCksshall be strengthenedso as to keep them with low noise. Soundbarriers shall be installedand trees shall be plad as appropriate,so as to prevent noise poltutiondurng the operationphase. IIs FNvhmnentalssues ActionTakenTo be Taken RbPks

S. Consrvaton of Farmlandand forest belts shall not be used for materialborrow sites. Contractor Farmlandis pro- Bcoboical hibitedto be usod Resources,olc. Arble land shall not be acocted as materialborrow sites as muchas possibl. If excavationhas to for borrow sites in be done in arable land, particularlyin Miquanand Fukang sections,top soil layer (30 cm) shall be desig. TS 100, saved and retuned after constructionwork is compled, so as to minimizeimpacts on ecosystem, TS 102.15.1 agicukure and animal husbandry. The Engineer supervis con- Fducationof constructionworers shall be strengthenedto protect naturalresources, wild plans stmrtion according and animals. Poachingshall be strictlyprohibited. to these clauses. Constuction trucks shall be driven on the temporaryroads so as to avoid damageto the farmland and pasture land. In the section of Turpan City, grape vines of the residentsalong the highwayshall be protectedso as to guaranteetheir normal income. 6. Risk of Acci- In order to guaranteeconstruction safety, efficientContractor lighting equipment and safety signs Contractor TS 102.17 dents shaUbe instaled on temporaryroads during construction,and adequatetraffic regulationsshal be TS 102.18 adoptedand implementedfor temporaryroads. fenerl Conditions Duringconstruction, effective safety and warning measuresshali be adoptedto reduce accidents. (ofCC)o 19.1 Blastingtime, signals and guards shall be stipulated. People, livestockand vehiclesin dangerous SCC 79.1 areas shall be evacuatedin time. Careful and thoroughchecks shall be made before blasting. TS 202.06.4 Managementand usage of blasting materialsshal strictly folow safety requirementsof the Public Safety Departnent. In Baiyanggousection, the dangerousareas shall be determinedbefore blasting,and people, livestockand valuabls withinthese areas shaUbe evacuatedin time and strictly prohibitedto pass throughduring blastin;. Safely lookoutpost shall be set up so that people and vehiclesdo not pass throughuntil blsting 1S complted. Blastingshall not be carried out duringpeak work periods so as to avoid trafficjams, injuries and deaths of people. Advancedtechuiques such as d xectional blastingshall be adoptedto minimizeadvrse effects on environmeat. Enironmental Ises Acton Takefo be Taken Rsp Remarks

7. Culuml Relics In Wubpo secdon, excavaton shall not be allowed wiin. presevaion range of the anciat city. Contractor Taken into account Excavaton shall not be done to the south of the ancint ciy or to the north of the proposed in designand highway. The status quo of the ancient city shall be strictly mainined. includedin the bid

Historicalremains on or along the proposedhighway, such uS the anciet stone moundsat XinjiangArchae. Caiwopu,Wulapo and Ganhez shall be either removedor preservedcarefully. Construction olocal Research workersshall be well informedof these historidalremains and prohibitodto damagethemn. Institte is in charge of this wok If fossils, coins, aitifuctsof value or antiquity,strutures and other remains of geologicalor GCC 27.1 archaeologicalinterest are found, the loc govnment shall be inrediately inomied of such discovery,and oxcavationshall be stoppeduntl ideiation of cultural relics by the authorized instiuton of preservationis completd. 8. Tlffic and Loca oer-structionmaterials shall be usd as muchas possibleto avoid long distane transporatin Con tor TS 102.18.1 Transportation of const on materials,especialy eath and stones. TS 102.18.4 Adequateactions to direct traffic shall be taken in consutationwith c and Public Secity Departent, when roads are jammedduring the consuction period. Where seetionsof existin roads are used for tsanpoton of coonstucionmateriah, subsidiary roads shall be constructeas appropriate,so that the existingroads are not significantlycongested. Plan for transportationof constuctionmaterials shall be developedto avoid tnosport activities during hours of pcak traffic especiallyfor existg roads. C. on Phaw 1. Transportation The Publi SecurityDepartment (PSD) shall be informedbefore tansport of hazardousmatrials is XCD and PSD Management canied out, especiaRywth regard to tme, routes and parkingplacesof vehicls that cary these materials. The vehiclesand drers shaUbe inspected. Exrnce, qualifieddriers are requied. Proper danger sign shaUbe painted on the vehices. Trnnspot of hazardousmaterials shal not be allowed duringthe taffic pea time. Hazardousmaterials shall not be transportedtogether with passengers,other goods or materials. Signs shall be set Up in the envionmeay sensitie areas such as reideal areas and water sourocs,in order to warmdrivers to pay special attention.

tN) 1 isussvironmental Ation TakeniTobe Taken Responsibility RanatB

2. VehicleMane- MT speed of vehcls on the highwayshell be wihin 50 -120 klhMr. XCD mat If veicle noise exceedsthe noise tanrd, the vehicle shall not pss ispection and wil not be allowedon roads till the problemis rectified. Tail gasinspion shallbe strengtened. Vehiles notcoplying with xhaustgas standxdlsshal not be allowedto go on roads. At toll stationssuch as Fukan;, Urumqiand Turpan. tail gas inspectionshall be underakn by the local environmnentalmontloring stations. Public awarenessand educationshall be promotedto fmilarize people with air polution and noise by vehicles and relted regulatons. 3. Noise 'lound bamers shall be instaed at locationswhere noise exceeds standard,based on the resultsof XCD tmonitong. 4. Others Constucion of new buildingsshall be prohibitedwihin 100 m from the roadsideof class 2 XCD sections,and 200 m from the roadsideof class 1 sections. Adequatemeasures shall be taken not to allowpeople to migrateto the area near the roadside. Use of non-leadgasoline shall be encouraged. Also, vegetableswith rhizomeshal not be planted within 50 m from ether side of the proposedhighway, in order to prevent themnfom lead o pollution. D. Environ!mena Monitorine 1. Atmosphere (1) Constructionperiod: Monitoring (a) Monitorngiem: TSP (b) Monitoringfequency: 4 times a year, 5 dayslerm (Hours. 9:00, 12:30, 16:00,20:00) (c) Monitoringtime: anuay, April, July & October (d) Monitoringpoints: near the constrction sites and residentialareas (2) Operation period: XCD (a) Monitoringitems: NOx, CO. TSP and HC (b) Monitorng frequency:3 times a year, 5 dayslterm, (Hours. 9:00, 12:30, 16:00,20:00) (c) Monitoringtime: Januay, Aeril or October, July (d) Monitoringpoints: Turpan City, Salt Lake Cheaical Plant, Caiwopu,Wulapo, Pukang City, Miquan, and Umumqi(7 points) (3) Monitoringtechnical criteria: Present Atmospher Monioring Sndard Methodsissued by State Environen P notectiotBureau (SEPB) M So EnvironmenalIssues ActionTakenlTo be Taken Responsibility Remarks

2. Noise Monitor- (1) Monitoringfrequency: ing (a) Constructionperiod: 12 times a year, each time includingday and night (b) Operationperiod: 4 times a year Ad hoc monitorng will be undertakenas appropriate. (2) Monitoringpoints: XCD (a) Constructionperiod: near constructionsites (b) Operationperod: Turpan City, Salt LAkeChenical Plant, Wulapo,Wusi Road Entrance of Urumqi, ShtangahaheEexiaodui, Taipinqu Sidui, Xigongoun,The VocationalSenior MiddleSchool of Miquan, Heigoudian,Puxi GradeSeparation, Tianchi Roadand XinguangSidui (12 points) (3) Monitoringtechnical criteria: Present NoiseStandard Methods issued by SEPB 3. Monitoringof (1) Lead Contentof Soil, Crops and Herbage XCD Other Itemns (a) Monitoringfiequency: once before construction,once a year duringthe constructionand operationperiods (b) Monitoringpoints: Turpan City, Dabancheng,Caiwopu, Urumqi, Miquan,Pukang & - Ganhei (o) Monitoringmethod: samplingof 0-20 cm cultivatedsoil, leaves and seeds of crops, stemr and leaves of herbageto detetrminethe lead contents (2) Water Quality XCD (a) Monitonngitems: BOD,SS and oil (b) Monitoringfrequency: 3 timer a year (c) Monitoringpoints: BaiyanggouRiver (d) Monitoringtechnical cntena: Water QualityStandard issued by SEPB

(3) Wild Animals XCD (a) Monitoringfrequency and time: 3 times a year (April, July and October) (b) Monitoringpoint: Baiyanggousection (c) Monitoringmethod: observation of the species and quantties of wild animalsliving and passilig (4) Tlansiirt of Livestock XCD (a) Monitoringfrequency: twice a year (springand autumn) XCD (b) Monitoringpoints: Miquan, Pulang&Urumqi (c) Monitoringmethod: observation (5) Grazing XCD ii (a) Monitoringfrequency: once a year O Monitoringpoints: same as thos for lead tnonitoring - 132 - ANNEX 6

1RESETTLEMENTACTION PLAN

1. Context. Thisannex summanzes the population dislocation and resetdement associatedwith theXinjiang Highway Project. It is basedon theResettlement Action Plan (RAP) prepared by the Resettlementand MonitoringOffice of the XinjiangUygur AutonomousRegion's High-Grade Highway Construction Authority (XHGHCA) for the Turpan-Urumqi-DahuangshanHighway (TUDH) and its linkdngroads. LandRequirement 2. The TUDHincludes the constructionof 283.3 ion of highway(101.3 1am, 4-laneroad and 182.0In, 2-laneroads) on newright-of-wav and 16 Ian of linldngroads. Accordingto the RAP, the TUDH will requireacquisition of 1,232ha of land.l/ This land falls witinhthe followinglocal administrativeunits: Urumqi City, TurpanCity and Fukng City; and MiquanCounty, Urumqi County and ToksunCounty. Ipact of Land Acquisition

3. There is both productiveand residentialland to be acquired and in accordancewith OD 4.30 theBorrower has submitteda RAPoudining the scaleof impact on peopleand the mitigatorymeasures to be taken. The informationpresented in this Annexis based on the December1993 version of the RAP, which includesrevisions reflectingthe agreementsreached during the AppraisalMission in November1993. 4. Table 1 showsthat productiveland beingaffected constitutes 10.3 percent of the total land to be acquiredand is locatedin Urumqiand ChangjiPrefectures. In TWan Prefecture,the projectwill take only unusedland. About 30 percentof the land neededfor the road is of this category(e.g., floodland, gobi land and desertedland). A substantialamount of landis classifiedas grass- and(52 percent), which is seasonallyused for grazing.Finally, the tableshows that residd& f 1 landwill be acquiredin UrumqiCity, UrumqiCounty, Fukang City and MiquanCoun . Thereis also a substantialamount of municipalland beingacquired (5.7 percentof the total). 5. The impactsof this landacquisition fall into five categories: (a) loss of agriculturalland by farminghouseholds; (b) reducedaccess to grzing for livestockkeepers;

,I Thisfigure excludes the PoplarValley section, which amoun to about123 ha. Table 1: LAND ACQUIsInONFOR TUDH AND LININGROADS /a

Adm_straive unit Tvpe of land acauired (hb Prefecture City/county Parming Vegetable Forested Grass Residential Flood Gobi Dserted Municipal land field land land land land lbad land land

Urun*i Urunqi City 3.0 - 10.9 5.9 3.2 34.4 - - 34.0 UnmnqiCounty 24.3 3.0 4.2 290.0 0.4 14.0 - - 10.8

Chanzji Fukang City 47.2 - 2.1 231.7 0.7 19.2 - 12.6 3.5 Miquan County 32.5 - 0.4 109.5 2.2 59.3 - - S.9

Tupmn Turpan City ------184.6 - 15.6 Toksun County - - - 0.4 - - 67.0 - -

Total 107.0 3.0 17.6 637.5 6.5 126.9 251.6 12.6 69.8 (%) 8.7 0.2 1.4 51.7 0.5 10.3 20.4 1.0 5.7 la These figures excludethe Poplar Valley section, which amountsto about 123 hecaes, of which about 100.7 hectaresare wastelandand 22.3 hectaresare fores land. - 134- ANNEX

(c) loss of place of residencefor people owning their own house;

(d) loss of place of residence for tenants in public housing; and

(e) loss of employment (i.e., income) from acquisition of commercial structures.

6. There is a total of 49&persons who will need to be compensatedfor loss of agricultural land; 1,022 oersons, or 236 households, will have to be relocated either because of road construction or later traffic noise (cf. Table 2). The latter category, accordingto the RAP, comprises 93 people in Miquan County.

Table 2: NUMER OF PEOPLEAFFECTD BY CONSTRUCTION OF TUDH ANDLINKG ROADS

Administrative Persons affected by land unit acquisitionby tNe of loss Precture City/county Loss of Loss of agricultural residenceLa land

Urumqi Urumqi City 23 535 (133)& Urumqi County 118 84 (18)

Changji Fukang City 161 112 (27) Miquan County 196 233 (47)

Turpan Turpan City - 58 (11) Toksun County

Total 498 1.022(

La Includespersons to be relocatedbecause of noise pollution (i.e., 93 persons in Miquan County). Ib Number of families in parentheses.

7. The acquisitionof open grazing land is not by itself regarded as a problem to livestock keepers, since there is adequate grazing land remaining. The road itself, however, will constitute a problem for livestock migration, for Khazak herders in particular. This problemhas been adequatelyaddressed in the engineeringdesign, allowing for safe crossing of animals and herders at critical points. - 135 - ANNE 6

8. Accordingto the RAP, a total of about 13,000 square meters of floor space of commercialstructures will be acquired (whichis 32 percent of the total floor space). This includes 1,391 square meters (10.7 percent of total commercial space) which are privatey owned and whoseacquisition would affect 65 people. They will be compensated in the same way as private housing owners.

Lgal Framework

9. The resettlementplan and its compensationpolicy is based on the existing legislativeframework, which includes:

(a) Land ManagementLaw of the People's Republicof China (of July 25, 1986 as amended on December 29, 1988);

(b) Guidelinesfor Enforcementof the 'land ManagementLaw' in the Xinjiang Uygur AutonomousRegion (of June 24, 1988);

(c) Stipulationsof Compensationand Resettlement for State Constructional Land Acquisition in the Xinjiang Uygur Autonomous Region (of December 14, 1991);

(d) Preferential Policy on Land Acquisitionand Resettlementfor High-Grade Highway Constructionin the XinjiangUygur AutonomousRegion (of June 15, 1993); and

(e) Rules to Enforce 'The ManagementRegulation of HouseRemoval in Cities' in the XinjiangUygur AutonomousRegion.

CompemationPolicy

10. This legal frameworkprovides compensation for a total of 12 different types of losses or disturbances(see Table 3). The coverage of this compensationpolicy and the level of compensationprovided is consideredacceptable to the Bank and in line with the general principles of OD 4.30.

11. A note should be made regardingthe paymentof compensation.In the case of loss of physical structures, standingcrops and sometimesalso trees, individualsmay be recipientsof compensationmonies. Compensationof or loss of land and other productive assets (e.g., industrial plants), however, and also all compensations for relocation epenses, will be providedto 'local units,' whichwould normallybe collecdveunits (e.g., brigades) or local governments(villages). This unit will be responsible for the actual rehabilitationwork, such as providingnew land, assistingpeople in building new houses, and if necesary, creatingalternative employmient. The local rehabilitationwork is subject to local-leveldecisionmaling, and higher-levelgovernment will normallynot interfereonce the compensationhas been agreed and paid out. - 136- A

Table 3: COMPENSATIONSTANDADS

Type of loss/disubnce Entidtledpero Entidement

1 Loss of agriculturalland Collectiveunit 5 x average outputvalue in past 3 years

2 Loss of grassland Collectiveunit S x average outputvalue in past 3 years

3 Loss of forest land Collectiveunit 80% of esimated value

4 Loss of flood land, gobi land, Local goverment Payment of land aminiaon fes wasteland, city spare land

S Laos of house plot (redential Collectiveunit Y 1,000per mu base)

6 Loss of standing,pereniial crop Individualfiamers 2 x average outputvalue in past 3 years

7 Loss of standing(y mng)annual Individualfarmers 1 x average outputvalue in past 3 rop years

8 Relocationexpenditwm for house- Collectiveunit Y 10,000per person in Urumqi, Y holds 8,000 elsewhere

9 Relocationof graves Collective Y 150 each

10 Loss of trees Individualor collec- (a) Y 100for a treewith a dae- tive unit ter of more tbal 0 cm (b) Y 50 for a tee with a diameter of less than 10 cm (c) fiuit trees, Y 150 each

11 Loss of private structures niividual Y 250 per mi2 for brick and wood houses and Y 600 for concre stuctures

12 Loss of industral structures Localagency As per separateevaluation

12. Whilethere is uniformityin the compensationpolicy for the TUDH along the full lengthof the road, there is likdy to be considerablevariation in how the 'local units" decideto use the compensationfunds for rehabilitatingaffected people. The RAP does not includeany informationon the concretemeasures to be takenat the locallevel, and has asked specificallyfor informationregarding the provisionfor employmentto personswhose current workplace will be affected.It shouldbe notedthat the legislation in this casedoes not compelthe project office to financearrangements for movingaffected - 137- A farmersfrom agriculture to entetprises,as longas theaverage farm land per farmerin the villagegroups is above1.5 mu (1 hectare= 15 mu).

13. A systemfor monitoringresetdement and rehabilitationwill be established to checkon the performanceof the respectivelocal units (see paras. 20 and 21). Temporay Requiion of Land

14. The projectwill need land for temporaryuse, suchas ca nps for contactors, quarries,borrow areas, and access roads. This is estimatedto be 932 ha. Accordingto the RAP, thisland is neitherproductive nor residential,and no personswill be affected.Once the constructioncontracts are signed,the needfor additionalland for constructioncamps, precastfields, relief roads etc. will be known.All temporaryland will haveto be handed back to the localgovernment by end of December1998. 15. The RAP specifiesthe paymentfor temporaryrequisition only in the case of agriculturalland, whichis equal to the averageoutput value for the last hfreeyears, paid on an annualbasis. cost 16. On the basis of the compensationpolicy and the censustregistationof affectedland and structures,carried out duringDecember 1992-February 1993, the total cost of land acquisitionis estimatedat Y 67 million(see Table 4). This figureexcludes the cost of removaland relocationof powerlines, telecommunicationcables, water and sewerpipes as well as the costof landacquisition for the PoplarValley section, the total cost of which is about Y 37 million. Hence, the total cost of land acquisitionand resettlementis Y 104 million.

11Xg 17. The timetable for implementingthe RAPenvisages handing over of the land to thecontractors by August-September1994. This is basedon theassumption that theloan agreementfor theproject will be signedby August1994, and thatthe agreementswith the localgovernments on thecompensation amounts will be reachedand approved by the State Land ManagementDepartment by March 1994.This leaves a period of maximumsix monthsfor implementingthe actualrelocation of people.Construction of new housesfor thoseto be resetdedis scheduledfor theperiod from beginning of Marchto endof August 1994.

18. This time tablehas to be revisitedin light of the finaldate for approvalof the loan agreement.In so doing, there is a need to coordinatethe time table for resettlementwith the revisedtime table for the constructionworks. In particular,one shouldlook intothe possibilities for phasingthe resetdement operations, to allowmaximum tme for relocationand reemploymentof affectedpeople. - 138 - ANNEX

Table 4: Cosr EsnMTE AN F ALLOCATIONLa (Y million)

Urumqi Changi .. pn.. Urumqi Urmqi Turpan Tuokexun Cost item City County Fukang Miquan City County Total

Compensationfor landand youngcrops 7.83 7.99 7.14 5.20 4.23 0.41 32.80 Subsidyfor resetement 0.11 0.54 0.73 0.89 - - 2.27 for houses andoher constuction 9.01 1.37 2.37 5.75 1.95 - 20.4S Compensationfor trees 0.89 0.02 0.66 0.12 0.74 - 2.43 Compensationfor enter- piisesremoval 1.00 0.60 0.40 0.70 0.30 - 3.00 Subtotal 18.N 10.52 11.30 12.66 7.22 Q0 60.95 Landmanement fee 2.44 conteny 3.65 Subtotal IA I13 1.27 0.12 0.04 6.09 Iu 20.72 11.57 12.43 13.93 7 04 67.04

Ig ExcludesY 37 millionfor removaland relocationof powerlines, telecommunication cables, water and sewerpipes, and for acquisitionof land for the PoplarValley section.

Orgaunzon 19. The organizatdonalsetup for implementationof the resettlementplan is shownin Figure 1. Paymentof compensationwill be handledby the ProjectExecution Officethrough the XinjiangLand Management Bureau, which in turnwill allocatemoney directlyto eachprefecture and city, for furtherdistribution to countiesand villages. Monitoring 20. The LandAcquisition and ResettlementOffice has beenassigned the role of monitoringthe implementationof the RAP.Two sociologistshave been contracted to lead this work. Ile Responsibilitiesof the MonitoringUnit havebeen identii.cd as follows: (a) to monitorland acquisition; (b) to monitorpayment of compensation; (c) to checkagreements on temporaryland use; - 139 - ANE 6

Figure 1: ORGANIZATIONALCHMRT FOR IMPLEMUNrAnONOF RAP FOR TUDH AmDIJWKING ROAD

Project Steering Comm1ittee Execution on Land Acquisition Office and Resettlement

- -|~~LaudAcquisgition and| RegsettlementOffice

Monitoring Unit

Chsmgji Prefecture Urumqi City Tran Prefecture CoordinationOffice CoordinationOffice CooPdinatioaOff_ce

Miquan [ukang county City Office office

(d) to checkagreements on houseremoval; and

(e) to examineand accept the resettementwork implementedby the local governments. 21. In addition,an elaborateprogram for monitoringof theprocess and outcome of the resettlementand rehabilitationefforts has beenincluded in the RAP. This program willbe caried out in two stages.The first stagewould commence after compensationhas beenpaid and wouldcontinue up to thecompledon of houseconstruction. The secondstage wil start six monthsafter the resetement is completed.A copyof the reportfrom each stagewill be submittedto the Bank. - 140- MMN1i2

IMPLEMENTATIONSCHEDULE

This annexpresents the implementationschedule for the v ariouscomponents of the project. Table 1 summarizesthe overall implementationschedule for the project as a whole. Table 2 shows the detailed implementationschedule for the nine civil worb contract sections of TUDH to be constructed by ICB; administrationand maintenance buildings, and service areas and electric and mechanicalworks for TUDH. Table 3 depi ts the detailedimplementation schedule for the supervisionof constructionof TUDIL These schedulesshow the estimated time requirementsfor constructionactivities as well as for preconstruction activities such as preparation of bid documents, prequalification process, bidding process, evaluationof bids, negotiationsand signing of contracts. Table 1: IMNLIENTAmONSacoDuLz 1993 1994 1995 1996 1997 1998 1999

Work. 1. TIrpan-Urumqi-Dahuangsban Highway (TUDH)

(a) Pirst package civil works-ICB contracts -V-_ _-_

(b) Second package civil works-ICB contracts - (c) Service and administration facilities (d) EFM supply and installation 2. Boad Accident Black Spots - Pilot Program Sunervision of Construction 1. TUDH and Linking Roads Procurement of Ecuimment 1. TUDH (a) Central lab. apparatus & environmental protection (b) Operation and maintenance 2. Highway network (a) Maintenance Trainin_ 1. General training - -- 2. Institutional strengthening - - 3. Supervision training - Studies 1. Highway maintenance policy 2. Intercity and rural passenger transport ------LiRhIav aafets -

Legends - PrequalificationPreparation of Bidding DocumentsJTOR Bidding Process/Competition among Consultants Conatruction/Supervision/Delivery/Execution of Studies Training/Technical Assistance - 142 - ANNE 71

Table2: LmLMNTAIoN PROGRAMFOR CONSRUCrION OF TUDH

L CVIL WORKS

A. Contract Sections(exept the MountainousSections) (ICBa

Prequalificationdocument available for sale on Sept. 25, 1993 Last date to submit PQ documents Nov. 25, 1993 PQ documentsevaluation report & MOC review & mail to the Bank Nov. 26-Dec. 25, 1993 Bank review and no objectionto PQ evaluadonreport Dec. 25-Jan. 24, 1994 Reviewbid documentsby Canadianconsultants and Bank Feb. 28, 1994 Sell bidding documentsto prequalifiedconactors Mar. 1, 1994 Last date to receive bid documents Jun. 1, 1994 Bid evaluationreport and governmentreview Jun. I-Jul. 15, 1994 Bank reviewbid evaluationreport and no objection Jul. 16-Aug. 15, 1994 Notify successfulbidders Aug. 20, 1994 Negotiateand sign contracts Aug. 21-Sep. 20, 1994 Start constructionon Oct. 28, 1994 Completeconstruction by Dec. 31, 1998

B. Cgntract Sectionsin the MountainousSection (TCB}

Prequalifieationdocument available for salo on Sept. 25, 1993 Last date to submitPQ documets Nov. 25, 1993 PQ documentsevaluation report & MOC review Nov. 26-Dec. 25, 1993 Bank review and no objectionto PQ evaluationreport Dec. 25-Jan. 24, 1994 Completebid documents(Chinese version) Jun. 30, 1994 Review bid documentsby Canadianconstats and Bank (Englishversion) Oct. 31, 1994 Sell biddingdocuments to prequalifiedcontractors Nov. 1, 1994 Last date to receive bid documents Jan. 31, 1995 Bid evaluationrepon end govment review Feb. 28, 1995 Bank review bid evaluationreport and no objection Mar. 31, 1995 Notify successfulbidder(s) Apr. 5, 1995 lNegotiateand sign contracts May 5, 1995 Start constructionon Jun. 5, 1995 Completeconstruction by Dec. 31, 1998

Administrationand Maintenane Buildings.Service Areas and Pacina Areas. and ToUlPlazas (LCB)

Completebid documents Aug. 15, 1995 Revise bid documents Aug. 16-Oct. 14,1995 Invite bids Oct. 16, 1995 Receive bids Dec. 15, 1995 Completebids evaluation Jan. 15, 1995-Feb. 15, 1996 Negotiate and sign contcts Feb. 16-Mar. 15, 1996 Start constuction on Mar. 16, 1996 Completeconstruction by Oct. 31, 1998 - 143 - AM=

IL E3ectdcaland meceanl wors aCB)

Completebid documentsand review by MOC Jun. 30, 1996 Review bid documentsby Bank and no objection Jul. I-Aug. 15, 1996 Invite bids Aug. 16, 1996 LIst date to receive bids Oct. 31, 1996 Prepare bids evaluationreport and MOC review Nov. 15-Dec.31, 1996 Review bid evaluationreport by Bankand no objection Jan. I-Feb. 28, 1997 Negotiateand sign contracts Mar. 1-31, 1997 Start constructionon Apr. 1, 1997 Completeconstruction by Dec. 31, 1998

Table 3: IMPLEMTAION PROGRAM FOR SPERVION OF CoNsmIcIoN OF TUDH

Review atd no objectionof Bank to terms of reference, letter of invitationand short list of consultants Sept. 2, 1993 Isebs invitationsto consultants Sept. 7, 1993 last date to receive poposals Nov. 7, 1993 Completeproposal evaluationreport and MOC review Dec. 7, 1993 Bank review proposal evaluationreport and no objection Jan. 7, 1994 Negotiationswith consultantand sign contract Feb. 5, 1994 Prer trainingmateria by consultant May 1-31, 1994 Train local staff Jun. 1-Sep.30, 1994 Svise works Oct. 1, 1994-Dec.31, 1998 - 144- A

SUPERVISION MISSION PLAN riming Main activities Skillsrequirement Staff-weeks

10194 Project Launch HighwayEngineering 3 The review of all key proceduresfor Bank Procurement ExecutingAgency interactions, such as Disbursement procurement,disbursement, environment and Environment resettlement,implementation schedule and progress reportingrequirements. Reviewprogress on preparationof studies.

4/95 General Supervision HighwayEngineering 2 (a) review of overall progressfor each component Procurement and identifypending issues and agree on Resettlement follow-upactions; (b) reach agreementon resettlementmonitonng arrangements;and (c) review proposalsfor equipmentfor maintenance of highwaynetwork and institutiona strengthening.

10/95 Major Supervision HighwayEngineering 3 In-depthreview of implementationstatus with Procurement particularemphasis on: Environment (a) contractors' performance; TransportEconomics (b) effectivenessof supervision; (c) adequacyof environmentalprotection measures; (d) review proposal for equipmentprocurement for the operationand maintenanceof the highway network; (e) review bidding documentsfor E&M supplyand installationcontract for TUDH; and (f) review progress on studiesof highway maintenance,roadway safetyand intercity trnusport.

6/96 General Supervision HighwayEngineering 1.5 (a) review overall progress for each componentand Procurement identifypending issues and agree on follow-up actions; (b) review proposal for procurementof equipment for operationand maintenanceof TUDH; and (c) review progress on studiesof various components - 145 - ANX i

TiminS Main activities Skills requirement Staff-weeks

3197 Maior ftwdsion HighwayEngineering 2 In-depthreview of implementationstatus with Enviromnent patticular emphasison: Resettlement (a) contractors' performance; (b) effectivenessof supervision; (c) adequacyof environmentalprotection measures; (d) staff truiningprogams; and (e) review progress on implementationof reicmmendationsof studies of various components.

10/97 Genl Ssion HighwayEngineering 2 Reviewingoverall progress for each componentand identifyingpendig issuesand agreeingon follow- up actions.

6/98 WMaSuperin, HighwayEngineering 2.5 In-dpth review of implementationstatus with Environment particularemphasis on: (a) conractors' performance; (b) effectivenessof supervision; (e) adequacyof environmentalprotection measures; (d) staff trainingprograms; and (e) review tolls study and progress on implemen- tation of recommendationsof other studies.

3/99 Project ImulementaionComoleton Revort HighwayEngineering 4 A consolidatedreview of project implementation. Transport Economics Environment Resettlement Training Total 2Q - 146 - ANNEX

SELECTED DOCUMENTS AVAILABLE IN THE PROJECT FILE

EconomicStudies

1. Project FeasibilityStudy Report: Turpan-Urumqi-DahuangshanHighway, Xinjiang Highway Planning, Survey and Design Institute, December 1993 (2 volumes).

2. EconomicAnalyses (computer runs) for TUDH, by section,with and without tolls and for medium and low traffic volume forecasts, February 1994 (exchangerate, $1 = Y8.7).

3. A Report on the PrefeasibilityStudy of the Hetian Road in Urumqi, the First Highway Survey and Design Institute, Ministry of Communications, Xian, December 1993.

4. A Study of the Roads in Hetian Road Corridor in Urumqi, the First Highway Survey and Design Institute, MOC, Xian, December 1993.

Environmentand Reseftlement

5. Environmental Impact Assessment for Turpan-Urumqi-DahuangshanHighway Project, Research Academyof EnvironmentalScience, November 1993.

6. -InitialEnvironmentalEstimation,"Turpan-Urumqi-DahuangshanHighwayProject, Ecology Institute of Chinese Research Academy of EnvironmentalScience, July 1992.

7. An Executive Summary of the EnvironmentalAssessment for Turpan-Urumqi- DahuangshanHighway, Research Academyof EnvironmentalScience, November 1993.

8. Project EnvironmentalAction Plan for Turpan-Urumqi-DahuangshanHighway, Xinjiang CommunicationsDepartment, November 1993.

9. Xinjiang Highway Project Detailed Design of Sound Barriers and Forest Belts, Xinjiang HighwayPlanning, Survey and Design Institute, December 1993.

10. Confirmationand Argumentof Noise SensitivePoints and its Protection Measures for Turpan-Urumqi-DahuangshanHighway Project, Research Academy of EnvironmentalScience, December 1993. - 147 - AN= 9

11. Resettlement Action Plan for Turpan-Urumqi-DahuangshanHighway, Project ExecutionOffice-Resettlement and MonitoringOffice, December 1993.

12. Bank's commentson environmentand resettlementdocuments (faxes of January 24 and February 16, 1994) and XCD's responses dated February 7 and March 9, 1994.

Highway Maintenance and Passenger Trsport Studies

13. Terms of Reference for the Intercity and Rural Passenger Transport Study in XinjiangRegion.

14. Report on Intercity and Rural Passenger Transport in Xinjiang Region, Henning Lauridsen, Institute of Transport Economics,Oslo, Norway, April 30, 1993.

15. Terms of Reference for the XinjiangHighway Network MaintenanceStudy.

Highway Safety

16. Report from appraisal mission for the Road Safety Component of the Xinjistig Highway Project, Richard Muskaug, Institute of Transport Economics, Oslo, Norway, November 15, 1993.

Equipment

17. Revised EquipmentList for TUDH Project, Project Execution Office, Urmmqi, January 1994 (exchangerate, $1 = Y 8.7).

titutional StrengthenlngTralng

18. InstitutionalStrengthening (originally Annex 1 to the yellow cover Staff Appraisal Report, February 25, 1994).

19. Training Report, XCD (PEO), November 1993:

(a) Training Program (b) Schedulefor first two years of Project Implementation (c) Criteria of Trainee Selection (d) ManagementProgram (e) Forms specifyingsubjects of training and organiational needs to be met (t) Tables-Training by Institutionto be Strengthened (g) Tables-First Two-Year Scheduleby Institution

20. Detailed Operational Schedule for First Two Years, Cycle of Training, XCD (PEO), January 1994. - 148 - ANNEX 9

21. DetailedTraining Schedulefor Staffof the XinjiangHighway PlanningSurvey and Design Institute, XPSDI, December 1993.

22. Detiled Training schedule for Staff of Xinjiang Traffic Science Institute, XTSI, December 1993.

23. Study of Training Needs and Resourcesof XinjiangCommunications School and Xinjiang CommunicationsTechnical Workers' School, Final Consultants' Report, World ORT Union, December 1993.

24. StatisticalTables:

(a) Xinjiang CommunicationsSchool: Current Attendanceby Ethnic Origin, Gender and Financial Status (b) Xinjiang CommunicationsSchool: Attendance (1982-91) by Course of Training (c) XinjiangCommunications Technical Workers' School: Current Attendance by Etnic Origin, Gender and Financial Status (d) XinjiangCommunications Technical Workers' School: Attendance(1974- 92) by Course of Training (e) Shihezi Training Center: Attendance(1981-93) by Type and Duration of Training (1) XinjiangHighway Administration Bureau: Professionaland TechnicalStaff at Subdivisionlevel by Specializationand Grade (g) XinjiangHighway Administration Bureau: Professionaland TechnicalStaff at Subdivisionlevel by Educationand Age IBRD25200 Ziniquanzi )|F eud nz d L oSahiTudunzi iFukong SSdnthei

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