Resettlement Planning Document

Resettlement Plan Document Stage: Final Project Number: 36433 March 2006

PRC: - Railway Project

Prepared by Ministry of Railways.

The resettlement plan is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors.

- i -

RESETTLEMENT PLAN

TAIYUAN – ZHONGWEI RAILWAY PROJECT

IN THE

PEOPLE’S REPUBLIC OF

MINISTRY OF RAILWAYS, HUI AUTONOMOUS REGION GOVERNMENT, PROVINCIAL GOVERNMENT, AND PROVINCIAL GOVERNMENT

28 February 2006

- i -

CURRENCY EQUIVALENTS (February 2006)

Currency Unit: CNY US$ 1.00 = CNY 8.083

ABBREVIATIONS

AAOV Average Annual Output Value ACWF All China Women’s Federation ADB Asian Development Bank AP Affected Persons CPAP County Poverty Alleviation Planning DMS Detailed Measurement Survey DRC Development & Reform Committee (local government level) EA Executing Agent EIA Environmental Impact Assessment FCTIC Foreign Capital and Technical Import Center FS Feasibility Study IA Implementing Agency Km Kilometer LAR Land Acquisition and Resettlement MOR Ministry of Railways, PRC mu Unit of land measurement in PRC [15 mu=1 hectare (ha)] NDRC State Development & Reform Committee NGO Non-government Organization NHAR Ningxia Hui Autonomous Region PIA Project Impact Area PPTA Project Preparation Technical Assistance PRC People’s Republic of China RC Resettlement Census RCSO Railway Construction Support Office RIB Resettlement Information Booklet RP Resettlement Plan ROW Right-of-Way SEPA State Environmental Protection Agency STI Socially Transmitted Infection TERA TERA International Group, Inc. (USA) TSDI Third Survey and Design Institute TZR Taiyuan-Zhongwei Railway TZRC Taiyuan Zhongwei Railway Company

- i -

TABLE OF CONTENTS

SUMMARY RESETTLEMENT PLAN ...... iv

SECTION 1: INTRODUCTION...... 1 1.1 BACKGROUND...... 1 1.2 PROJECT DESCRIPTION...... 1

SECTION 2: SCOPE OF LAND ACQUISITION AND RESETTLEMENT...... 7 2.1 SCOPE AND NECESSITY OF LAND ACQUISITION AND BUILDING DEMOLITION...7 2.2 MEASURES TO REDUCE PROJECT IMPACT...... 8 2.3 SUMMARY OF KEY EFFECTS ...... 11 2.4 PRIMARY RESPONSIBILITIES FOR LAND ACQUISITION AND RESETTLEMENT ..13 2.5 STATION LINK AND CONSTRUCTION ACCESS ROADS...... 14 2.6 VILLAGE IMPACTS...... 15

SECTION 3: SOCIOECONOMIC PROFILE AND PROJECT IMPACT ...... 17 3.1 OVERVIEW...... 17 3.2 SOCIOECONOMIC SURVEY OF AFFECTED VILLAGES, HOUSEHOLDS AND ENTERPRISES ...... 18 3.3 AFFECTED VILLAGES...... 18 3.4 AFFECTED HOUSEHOLDS ...... 19 3.5 AFFECTED ENTERPRISES, SCHOOLS AND OTHER EMPLOYERS...... 20 3.6 PROJECT IMPACT...... 20

SECTION 4: OBJECTIVES, POLICY FRAMEWORK AND ENTITLEMENTS ...... 27 4.1 PURPOSE AND OBJECTIVES OF LAND ACQUISITION AND RESETTLEMENT .....27 4.2 PROPERTY OWNERSHIP AND STRUCTURE OF PAYMENTS...... 27 4.3 APPLICABLE LAND POLICIES, LAWS, AND GUIDELINES...... 29

SECTION 5: RESETTLEMENT AND COMPENSATION MEASURES ...... 35 5.1 PERMANENT LAND ACQUISITION...... 35 5.2 TEMPORARY LAND OCCUPATION...... 37 5.3 BUILDING DEMOLITION AND REALLOCATION...... 37 5.4 PAYMENT OF COMPENSATION...... 42 5.5 ELGIBILITY POLICY AND ENTITLEMENTS MATRIX ...... 42

SECTION 6: ECONOMIC RESTORATION STRATEGY...... 46 6.1 CURRENT INCOME LEVEL AND VULNERABLE HOUSEHOLDS...... 46 6.2 SUPPLEMENTARY INCOME RESTORATION STRATEGY...... 47 6.3 LIVELIHOOD RESTORATION STRATEGY ...... 48 6.4 ECONOMIC REHABILITATION PLANS FOR SERIOUSLY AFFECTED VILLAGES...50 6.5 SAMPLE RESETTLEMENT AND RESTORATION PLAN ...... 51 6.6 MEASURES FOR VULNERABLE GROUPS ...... 55

SECTION 7: INSTITUTIONAL FRAMEWORK AND ARRANGEMENTS ...... 58 7.1 INSTITUTIONAL FRAMEWORK...... 58 7.2 INSTITUTIONAL OBLIGATIONS ...... 60 7.3 HIGH LEVEL COORDINATION ...... 61 7.4 CAPACITY TO PLAN AND MANAGE LAND ACQUISITION AND RESETTLEMENT .61

SECTION 8: CONSULTATION AND GRIEVANCE REDRESS PARTICIPATION...... 63 8.1 PROJECT STAKEHOLDERS ...... 63 8.2 MECHANISMS FOR STAKEHOLDER PARTICIPATION ...... 63 8.3 LOCAL INSTITUTIONS OR ORGANIZATIONS ...... 69

- ii - 8.4 PROCEDURES FOR REDRESS OF GRIEVANCES ...... 70

SECTION 9: RESETTLEMENT BUDGET AND IMPLEMENTATION SCHEDULE ...... 72 9.1 LAND ACQUISITION AND RESETTLEMENT COSTS...... 72 9.2 ANNUAL BUDGET...... 74 9.3 SOURCES OF FUNDING...... 75 9.4 TIME SCHEDULE ...... 75

SECTION 10: MONITORING AND EVALUATION...... 78 10.1 OBJECTIVES AND SCOPE...... 78 10.2 BASELINE DATA...... 78 10.3 INTERNAL MONITORING OF RESETTLEMENT TARGETS ...... 79 10.4 EXTERNAL INDEPENDENT EVALUATION...... 82 10.5 PARTICIPATION BY AFFECTED PEOPLE...... 88 10.6 MONITORING REPORT...... 88 10.7 ESTABLISHING A COMPUTERIZED DATABASE...... 90

ANNEXES TO THE RESETTLEMENT PLAN

ANNEX A: DETAIL OF LAND, BUILDINGS TO BE ACQUIRED ANNEX B: COUNTY LEVEL DEMOGRAPHIC DATA ANNEX C: AFFECTED ENTERPRISES AND INSTITUTIONS ANNEX D: RESETTLEMENT STATUS AT THE VILLAGE LEVEL ANNEX E: ESTIMATED BUDGET FOR LAND ACQUISITION AND RESETTLEMENT BY PROVINCE ANNEX F: TERMS OF REFERENCE FOR EXTERNAL MONITORING

SUPPLEMENTARY ANNEXES TO RESETTLEMENT PLAN (BOUND SEPARATELY)

ANNEX 1: INTERVIEWS AND DATA GATHERING ANNEX 2: LIST OF PEOPLE MET ANNEX 3: NHAR 5-YEAR PLAN OF FARMERS’ NEW RESIDENCES ANNEX 4: APPLICATION OF ADB DEFINITION TO HUI ANNEX 5: TERA SURVEY FORMS ANNEX 6: SOCIOECONOMIC PROFILE BY PREFECTURE AND COUNTY ANNEX 7: MINUTES OF MEETINGS WITH SHANXI AND SHAANXI PROVINCES, AND THE NINGXIA HUI AUTONOMOUS REGION AND OTHER AGREEMENTS BETWEEN MOR AND THE THREE PROVINCES ANNEX 8: ANALYSIS OF HOUSEHOLD AND VILLAGE RESETTLEMENT SURVEYS ANNEX 9: NHAR APPROVED LAR VALUES

- iii - SUMMARY RESETTLEMENT PLAN

1. The Project railway line is 939.889 km long, including (i) electrified double-track from Taiyuan/Yuci at its eastern terminus to Dingbian (508.338 km), where it separates into electrified single-track lines to (ii) Zhongwei (239.196 km) and (iv) (192.355 km). The Taiyuan- Zhongwei Railway (TZR) Project will cross 3 provinces, 7 prefecture level cities, and 22 counties and districts. The areas near the eastern and western termini are developed urban centers with considerable commercial, administrative and industrial activities. These areas have rail lines and expressways that provide access to China’s national transportation network and the national economy. The areas between these economic centers have relied on the limited capacity of a two- lane paved road for their access to China’s economy. This limited capacity has severely constrained the development of and investment in the western part of the Shanxi Province, the northern part of the Shaanxi Province, and the eastern part of Ningxia Hui Autonomous Region. As a result, there are relatively high incidences of poverty in these areas. However, there are considerable natural resources awaiting development that will be triggered by TZR. For example, there are substantial proven coal reserves in Shanxi and Shaanxi that are not competitive with coal deposits in other regions because of high cost road transport. Similarly, the area’s agricultural production has been limited by lack of water for irrigation and the heavily congested two-lane road, which presents a serious hurdle in accessing markets.

2. An estimated 69,845 mu of land will be permanently acquired, of which 42 percent is cultivated dry land, 36 percent paddy land, 8 percent orchard, 3 percent vegetable plots, 3 percent woodland, and 7 percent wasteland. About 41 percent of the land is in Ningxia, 37 percent in Shaanxi, and 22 percent in Shanxi. Along the alignment, the eastern part of Ningxia and the western and central parts of Shaanxi are sparsely populated and very arid. The Project will also temporarily acquire 28,074 mu for TZR construction activities and access. An estimated total of 428,395 square meters (m2) of structures will be affected, of which 81 percent are residential units and other farm structures; 18 percent are factory buildings, workshops, and other industrial structures; and 1 percent school buildings. Based on the Chinese standard for impact assessment, the equivalent of 11,803 would lose all their land and agricultural livelihoods and 11,956 will have their houses demolished. Since the alignment is a narrow strip of land, land acquisition will affect a much larger number but most of the AP will only lose a small part of their land holding. Based on other railway projects and the low population density in the Project area, it is estimated that the average loss of land per household would be 15%, which means the number of partially affected people would be in the order of 78,687, of which those losing more than 25% would be about 8,000 (i.e., 2,000 households having a significant loss of livelihood). A more accurate account of the number of AP will be available after completion of the detailed measurement surveys. Land acquisition and resettlement impacts will be lessened by aligning the railway away from the most densely populated areas, and avoiding villages, cultivated land, and facilities, where possible, based on consultations with communities.

3. The Ministry of Railways (MOR) in consultation with provincial and local governments prepared the initial Resettlement Plan (RP) with the assistance of the Third Survey and Design Institute (TSDI) in May 2005, including a survey of 1,100 potentially affected households. The initial RP was revised in September 2005 and updated by the Project Preparatory Technical Assistance (PPTA) Consultant following field surveys completed in November 2005. This RP is based on the first stage of a preliminary design study, village surveys of 79 somewhat affected villages, 1,319 additional household surveys, provincial, prefecture and local government statistics, and consultations with provincial, prefecture, county/ and local officials, village leaders, and affected households. The RP will be updated based on the detailed measurement survey and the final alignment, and full disclosure of the RP to affected persons will occur prior to Project Appraisal that is expected in March 2006. Based on this schedule, the Resettlement Information Booklet will be provided to all AP before March 10, 2006. The updated RP will be disclosed to AP and submitted to the Asian Development Bank (ADB) for concurrence prior to the commencement of land acquisition.

- iv - 4. The resettlement objective is to ensure that compensation and entitlements provided to AP are adequate to at least maintain their "without-project" standard of living, with prospects of improvement, in line with the Land Administration Law (1998) of the People's Republic of China (PRC) and with ADB's Policy on Involuntary Resettlement (1995), and Policy on Indigenous Peoples (1998). In addition, affected people that are poor or vulnerable should be made better off, either as direct beneficiaries or through special measures to safeguard and enhance their living conditions. People losing land, housing, other assets, or other means of production will be compensated at replacement cost and assisted in restoring their incomes and living standards. In 2004, the PRC Constitution was amended to ensure that people are compensated according to law for land expropriated for public projects. The State Council (SC), China’s highest policy making body, issued its Decision on Further Reform to Strictly Implement Land Administration, State Document No.28 (2004), which requires public consultation with all AP prior to approval of projects, maintenance of the living standard of AP, strengthened monitoring procedures, and public accounting of the receipt and distribution of resettlement funds. Payments will be made to the village collectives, and they will determine the allocation of funds in conjunction with AP and local government officials. At the minimum income restoration plans will be prepared for seriously affected villages with particular emphasis on long-term sustainable income enhancement strategies.

5. The RP stipulates eligibility/entitlement provisions for AP. SC Document No. 28 establishes that the level of maximum compensation rates for land acquisition and resettlement subsidy of up to 30 times the Average Annual Output Value (AAOV) may be increased if it is not adequate for income restoration of AP. The provinces are utilizing the revised implementation methods in accordance with the Land Administration Law and SC Document No. 28. Compensation for temporary land loss will be paid directly to the AP and the land will be restored to its original state after use. Compensation for rural housing losses will be paid directly to the AP at replacement cost, free of depreciation, demolition expenses and salvaged materials. In general, rural households will rebuild their own houses within the same village and at the standard of being as good as, if not better than their existing houses. Crop and tree losses will be directly paid to the AP. Factories, schools and other institutions and enterprises will be compensated at replacement value for relocation and reconstruction, using the latest market prices of materials and labor.

6. The 79 surveyed villages are on the alignment and have been identified as being “somewhat affected” by TZR. The 1,319 households with a population of 4,336 people surveyed by the Consultant were selected by local officials as being the most affected by TZR. The average net income per capita for the surveyed population is CNY 3,291. About 20.3 percent of the total surveyed households had net incomes per capita below CNY 965, which is the national poverty line for 2005.1 Special assistance such as free labor for building houses, materials, and additional funds will be provided to the vulnerable households that include orphans, widows, and the disabled, and are largely dependent on agricultural production for their income.

7. Households headed by women represent only 0.8 percent of the total surveyed households. While this may seem a low representation, it should be noted that in these rural areas, it is generally uncommon for a woman not to live with a family. Although there were very poor households in the small sample of women-headed households, there were also ones with net incomes well above the poverty line, especially in or near urban areas, where there are more opportunities to earn income from wages or business. Households with a disabled or infirmed member constitute 4.9 percent of the surveyed households. As with women-headed households, there are very poor as well as wealthier households in this group. Special assistance will be provided to the vulnerable households by local governments on a case-by-case basis consistent with the needs of the household.

8. Hui minority households constitute 16.7 percent of the surveyed households, and all are concentrated in Ningxia. While there are 7 poor Hui households in the sample, there are also

1 The 2004 poverty rates in the counties/districts crossed by the alignment are: 6.81 percent in Shanxi, 32.35 percent in Shaanxi, and 19.83 percent in Ningxia. The average poverty in all counties/districts crossed by the alignment is 17.09 percent.

- v - wealthier ones, such as in Jinfeng, where the average net income per capita is CNY 5,343 for the 17 Hui households in the sample. The poor Hui households have often been relocated over the last 15 years along with poor Han from mountainous areas to the south of the Project under a provincial program to improve living conditions. Some of the relocated households have successfully transitioned into China’s economy, while others have remained poor albeit with improved living conditions. Thus, the Hui reflect income levels of their respective areas and living conditions. In Jinfeng, they are successful business persons, and have incomes reflecting their success. Where they are poor, this is due to the limited resources available in the area to all residents and inability to take advantage of opportunities, which reflects root causes of poverty rather than ethnicity. The Hui have been politically and economically integrated into Chinese society for centuries and their customs and practices are respected and protected.

9. Each village will utilize the land compensation and resettlement subsidy for income restoration. In accordance with the requirements of SC Document No. 28, compensation for loss of land will be principally distributed to AP although the method of distribution will be determined by the village in conjunction with government officials. In this process the AP will be consulted through consultative meetings to obtain their preferences. Local officials expect that schools, factories and enterprises will rebuild locally and that these organizations and their employees will be fully compensated for any and all losses and costs associated with relocation.

10. MOR, local governments, and prefecture and county-level land acquisition and resettlement offices and land administration bureaus, will be responsible for implementing and delegating resettlement activities to township officials and village committees. The estimated resettlement cost, exclusive of taxes, fees, and physical and price contingencies, is CNY 1.48billion, (US$ 183.1 million), which constitutes 6 percent of the Project’s base cost. The resettlement budget will be adjusted based on the actual measurement of physical losses.

11. AP have been and will continue to be informed and consulted about the likely impacts of the Project at various stages. Stakeholders consulted include heads of affected households, village heads and representatives, local government agencies and departments, and vulnerable groups, including women and ethnic minorities. Before March 10, 2006, resettlement information booklets will be distributed and local resettlement plans made available to the public, including all AP. Affected households will also be consulted and will participate in resettlement activities, including compensation standards, allocation and utilization of compensation, detailed measurement surveys, location of underpasses, new housing sites, and grievance redress. During the actual implementation of land acquisition and resettlement, the AP and affected enterprises can appeal any problems or grievances regarding land acquisition, housing demolition and relocation, compensation and resettlement to five levels: the local land administration, local government, the owners of the project, the external monitoring agency, and/or the courts. In addition, there will be frequent opportunities for AP to interact with representatives of the various organizations involved in the implementation and management of the Project through public meetings and hearings, consultations, and site visits to discuss issues related to compensation and resettlement.

12. MOR and prefecture-level land acquisition and resettlement offices, in collaboration with the county resettlement offices, will be responsible for internal supervision and monitoring of compensation payments, house rebuilding/relocation for AP, land redistribution, and grievance redress. Progress reports will be prepared by MOR and submitted to ADB on a quarterly basis, until resettlement is completed. MOR will then prepare a resettlement completion report for submission to ADB. In addition, an independent monitor will be contracted by MOR to carry out the external monitoring and evaluation work. The tasks include: baseline survey, review and verification of the compensation payments, status of land acquisition and compensation payments, appraisal of grievance redress procedures, AP's reaction/satisfaction with entitlements and compensation, assessment of the restoration of livelihoods of AP, and drawing lessons learned for future resettlement planning. The external monitor will prepare monitoring and evaluation reports for submission to MOR and ADB every 6 months until the completion of resettlement activities; thereafter, annual evaluation investigations will be conducted for 2 years and reported to MOR and ADB.

- vi - 13. The Project will displace a large number of people. However, this could also be to their benefit because, under SC Document No. 28 regarding resettlement policies, compensation payments will be substantial and could provide the basis to invest in income generating activities. Affected households will receive training and skills development assistance that will facilitate income-generating activities. Other assistance such as preferential hiring of AP by construction companies, and access to capital will also be provided. Local poverty alleviation programs provide a valuable source of additional assistance to vulnerable groups and they will be targeted during the implementation of the Resettlement Plan. In addition, the provinces have established programs that directly benefit affected villages and persons. Shaanxi has a very active village development program that provides infrastructure and funds for enterprise development that will be doubled from the 10th to the 11th 5-Year Plan. Ningxia has implemented a village relocation program that provides new and higher standard housing, infrastructure and access to services such as health clinics. The province and counties provide 50 percent of the funding for the relocation program and the village 50 percent. Officials stated that affected villages will be allowed to leverage their compensation funds from TZR towards their 50 percent contribution to the program. Thus, AP could greatly benefit from the TZR provided the resettlement and income restoration activities are properly planned and implemented. If these are successful, TZR could serve as a model for other large projects.

14. MOR and local agencies have extensive experience in land acquisition and resettlement (LAR), including responsibility for LAR for the expressway now under construction that parallels TZR, and other roads and bridges in the area. This experience will facilitate appropriate LAR under this Project. As is the normal procedure, the local government will provide training in LAR procedures to the relevant county and township officials and village leaders who are directly involved with implementation. This will also provide an opportunity to explain ADB resettlement policy and requirements. ADB has agreed to provide support to increase local understanding of ADB policy and requirements set out in this RP.

- vii -

SECTION 1: INTRODUCTION

1.1 BACKGROUND 1. This Resettlement Plan (RP) is prepared by the Ministry of Railways (MOR) of the People’s Republic of China (PRC), Ningxia Hui Autonomous Region (NHAR) Government, Shanxi Provincial Government, and Shaanxi Provincial Government with assistance from national and international consultants. In May 2005, MOR prepared a Feasibility Study (FS) report for the Taiyuan-Zhongwei Railway (TZR) Project with assistance from the Third Survey and Design Institute (TSDI). Also funded by MOR, a Project Environmental Impact Assessment (EIA) and Resettlement Plan (RP) were prepared. These reports were later updated in September 2005. The preliminary alignment and design of the Project have been completed by TSDI and MOR. 2. The National Development and Reform Commission (NDRC) of PRC approved the Project for Asian Development Bank (ADB) financing. A loan application has been made to the ADB to finance selected Project components. As part of ADB’s project preparation, TERA International Group, Inc. of the United States (TERA) in association with TSDI (collectively referred to as Consultant in this Report) has been engaged by the ADB under Contract No. COCS 05-467 dated 25 August 2005 to assist MOR in preparation of the RP and other Project-related reports. MOR and the three provinces are responsible for the preparation and implementation of the RP. The Consulting Services Contract has been funded by ADB as a Project Preparation Technical Assistance (PPTA) project. The Foreign Capital and Technical Import Center (FCTIC) of MOR is the Executing Agency (EA) for the Project and the TZR Preparatory Leading Group, which will become Taiyuan-Zhongwei Railway Company (TZRC) when the joint venture between MOR and the three provinces is established, is the Implementing Agency (IA). 3. The RP follows the ADB format. Sections 2 through 10 cover specific topics in accordance with ADB guidelines for preparation of Resettlement Plans.2 Annexes of the RP include supportive background and statistical data. Supplementary Annexes to the RP are provided as a separately bound document, which contains further background information for ADB’s purposes. The information contained in the RP is based on survey data collected by TSDI during initial project preparation tasks and by the Consultant during October-November 2005. The Project’s feasibility study has been submitted in September 2005 to NDRC for approval and NDRC approval has been obtained on January 17, 2006. Based on the final alignment and completion of the full census of Affected Persons (AP), the RP will be updated and the Final RP will be prepared by MOR and the three provinces and resubmitted to ADB for concurrence before July 1, 2006.

1.2 PROJECT DESCRIPTION 4. The TZR will become one of the major lines in MOR’s national railway network linking east and west China (Figure 1-1). The TZR alignment will extend from the southwestern part of Shanxi Province through the northern area of Shaanxi Province to the middle (Zhongwei extension) and northern areas (Yinchuan extension) of the NHAR. The orientation of the railway line is basically along National Highway No.307, starting from Taiyuan City/Yuci in the east to Zhongwei City and the Provincial capital, Yinchuan City in NHAR (Figure 1-2). 5. The total length of the alignment is 939.889 km. The Project envisages the construction of an electrified Class 1 railway line. In addition to new line construction, the Project includes some reconstruction of existing lines in order to provide for compatible alignments. The line between Taiyuan/Yuci and Dingbian will be double-track, with a maximum speed of 200 km/hr permitted, and the lines from Dingbian to Yinchuan and Zhongwei will each be single-track with a maximum speed of 160 km/hr. The proposed line will have 63 stations (see detailed list in Table 2-2 in Section 2). The Project will pass through 3 provinces, 7 prefecture level cities, and 22 counties/districts (Figure 1-3).

2 Handbook on Resettlement: A Guide to Good Practice, Asian Development Bank, Manila, 1998.

- 1 -

Figure 1-1: General Location Map of TZR

N E g rl ia iao n in g n gl e n on if b Hami T r a h a y C H n e h Linhe Jining S Chengde Huhehot Zhangjiakou Fengzhou Shacheng Zhunge'er Dongsheng U ru Wuzuishan m qi Bazhou Shenchi Ningwu Baoding Shengmubei

Yinchuan Daba Dingzhou Cangzhou Wuwei Lanxian Guyaozi Suning Yulin Huanghua Yanchi Yingshuiqiao Dingbian Shanxi Taiyuan Hengshui gwei G Zhon Mucun Zhongyang Longkou e'e Suide Yuci rm Dazhanchang u Jingbian Xiaoxi Lancun Yan'an Qingda

Rizhao Yanzhou

Jiaozuo Heze Puchang Linyi Mengyang Xi'an Legend: Shangqiu Xinyi Taiyuan-Zhongwei-

Yinchuan Railway H u Na a Single Line Railway nji iy ng G

in K u

n o

Double Line Railway a a

w u f n

d g l g

o g n

Under Construction z n a o i h e n X X o h Sh Planned Railway ian u ang C g hai fan Source: Consultant

6. The rationale for the project reflects (i) railway network development; (ii) capacity enhancement; (iii) meeting the needs of the new railway development plan consistent with the western region development strategy; and (iv) promoting pro-poor economic growth along the line and in the region, thereby reducing poverty. The proposed TZR will provide low-cost rail transport for coal, as well as other commodities. It will also reduce the distance for transit traffic significantly between stations in northeast China and the west. Absent the new line, traffic between Beijing and the west, for example, must travel on the Jingbao Line in the north passing through Huhehot, or on the Longhai Line in the south via Xian (Figure 1-1). The proposed line provides a shortcut route between these two existing lines, reducing the distance by between 100 and 500 km, depending on the origin and destination pair.

7. The proposed railway line will connect with the Shijiazhuang–Taiyuan Railway in the east, and the Baotou–Lanzhou Railway in the west. It will intersect the line connecting Baotou to Xingengzhen (east of Xi’an) at Suide. Traffic on both the existing Jingbao Line and Longhai Line is close to capacity. There are improvements planned to increase capacity on these existing lines, but these improvements will likely be sufficient only to accommodate expected traffic growth. Construction of the proposed TZR will relieve the congestion on these existing lines as well as generate additional traffic due to the reduction in transport costs and shortened distances between eastern and western regions of China.

- 2 -

Figure 1-2: General Alignment of TZR

Legend: u to o a TZR Project B 110 City/Town r e iv y R Existing Railway a 109 w o l l Highway w e Y

u h Yinchuan y o

National Road a Helan t

g

o w

n l g

City a i o i

t

B a r

a

River u

D

p H g

Provincial Boundary n

Xingxian o

t

n g

Inner Mongolia r e

h n

Xinxian t

r

o N pi Maowusu Desert n y Jingle Tenggeli Desert a Shaanxi w a l i a

R u Yulin City Lanxian u Ertoukeqianqi o h Y z n 208 a Q L - u n- o i t n o Shanxi a g B d ua a y o i - Y Yangqu a i n T Qinglongxia c Jiaxian City h Wuzhong 307 u a Linxian Taiyuan n 209 Shouya y E City a 210 Fangshan City ilw a x R n p a 211 307 u iy r a e -T

y ng

a s a

w u l h

i Ningxia s z

a a iji

R g wa h

i n S

e i w n

g g y

n n o

h o Yuci Z h y

- a

n Z Qingxu

a d w City

u s

y e i s

a n e T n r a xp Jiaocheng e Pl i e Zhongning h ch T n inchuan Expressway X -Y u -Ya Liulin a n 307 h 307 Wenshui e Hongsipu Taiyuanshan Q Development Development Area ingdao- Area Yinch uan Exp ressway J in g b Yushe i y a Qingjian n a - w 109 Tongxin Y a Jiaokou h g n Shilou i ' a H Wuqi n g E Ansai Zhidan x Yanchuan Lingshi n Wuxiang p e re h Qinxian s c s Yonghe 209 n w 210 u a Y - Heyuan y Huanxin Guoqi n Xianghuan Yan'an City a

u Yanchang y i Qinyuan Gansu n 208 a Danning a ' Huachi i X T Source: Consultant.

- 3 -

Figure 1-3: Prefectures and Counties along the TZR Alignment

Yinchuan Wuzhong

Yinchuan Yinchuan

Yongning Yulin Luliang Taiyuan

Taiyuan Zhongwei Taiyuan Hengshan Yuci Jiaocheng Yanchi Dingbian Jinzhong Wupu Luliang Qingxu Zizhou Suide Wenshui Zhongwei Zhongning Jingbian Liulin Zhongwei Dingbian

Tongxin

Ningxia Hui Autonomous Region Shaanxi Shanxi TZR Route km (375.928) (347.408) (216.553)

Source: Consultant.

- 4 -

8. Beginning from the center of the Yuci Marshalling Yard at the Taiyuan Railway Junction in of Jinzhong City and the Taiyuan South passenger station, the alignment passes through the and of Taiyuan City in Shanxi Province. It then passes through Jiaocheng County, Wenshui County and Fenyang City of Luliang City in Shanxi Province. It crosses the Luliangshan Mountains and proceeds west along the Dongchuanhe River before passing through Lishi and Liulin Counties of Luliang City. It then crosses the into Wupu County, Shaanxi Province. The alignment then passes over mountainous and hilly areas and the Wudinghe River before entering , where it will connect with the - Yan’an Railway (Batou-Xinfengzhen), and then crosses Zizhou, Hengshan, Jingbian, and Dingbian Counties of Shaanxi Province. It proceeds along the Dalihe River before crossing the Mayihe River and a mountainous region before entering the border region between the Loess Plateau and the Inner Mongolian Plateau. It then enters Yanchi and Hongsipu Counties and the Tongxin Development Zone of Wuzhong City in NHAR. It passes through of Zhongwei City, where it crosses the Yellow River. It then passes through the Huangyangwan Railway Station on the Baotou-Lanzhou Railway (BLR) line; and ends at the BLR Yingshuiqiao Marshalling Yard. The total route length of the section from Yuci Marshalling Yard in Jinzhong City to Dingbian Railway Station is 508.338 km (double-track section) and from Dingbian Railway Station to Yingshuiqiao Marshalling Yard in Zhongwei City (single-track section) is 239.196 km.

9. The Yinchuan Connecting Line will extend from Dingbian Railway Station, and proceed through of Wuzhong City in NHAR. It then passes through Lingwu City and crosses the Yellow River in of Yinchuan City. It connects with the BLR at the Pingjipu Railway Station and terminates at the Yinchuan Railway Station in . The total length of this single-track section is 192.355 km.

10. Key factors impacting both resettlement and engineering components of the Project are the topographic and climatic characteristics that are briefly summarized in the following paragraphs. The alignment passes mainly through very dry areas with sparse vegetation that are susceptible to soil erosion. However, reducing the acquisition of productive land does not change the basic fact that income restoration strategies will have to focus on economic and employment opportunities that may require lifestyle changes for AP such as from farming to employment at industrial and commercial enterprises. It should also be noted that TZR will open up many new areas that are rich in mineral resources to development.

11. From Taiyuan/Yuci to Zhongwei and Yinchuan, the route successively passes through three major geomorphic regions: the Central Shanxi Basin, the middle southern section of the Luliang Range and the Shaanxi-Gansu Basin. The section from Taiyuan/Yuci to Wenshui is in the Central Shanxi Basin, and consists of mostly flat land and alluvial plains, with foothills and river valleys. At the west end of the Basin there are loess hills and eroded gullies. The section from Wenshui to Wangjiahui is in the south section of the Luliang Range (maximum elevation 1872 m), and consists of mainly medium and low mountains with eroded gullies. The section from Wangjiahui to Yingshuiqiao and Yinchuan is in the Shaanxi-Gansu Basin, and consists mainly of hills on the Loess Plateau of North Shaanxi with eroded gullies. The alignment borders the Maowusu Desert, followed by some lakes and marshes in the Yellow River alluvial plain. Soil erosion and sparse vegetation are typical of the Loess Plateau, the hilly sections, and the area bordering the Maowusu Desert.

12. From Taiyuan/Yuci to Zhongwei/Yinchuan are respectively a warm temperate sub-humid zone, a medium temperate sub-arid zone, and a warm temperate arid zone using continental climatic zone classifications. For example, Taiyuan receives an average rainfall of 866 mm per year, which drops quickly to 300-400 mm per year in most areas along the alignment until NHAR, where average annual rainfall is roughly 200 mm. Subject to monsoon circulation, the seasons are distinct with short summers and long winters. It is hot and humid in summer and generally cold and dry in winter. Summer maximum temperatures can reach an extreme of 40°C in Taiyuan, while extreme winter temperatures can fall to -30°C in Yinchuan. For engineering purposes, the areas along the route are all classified as cold zones.

- 5 -

13. Currently, the area along the alignment is served by a two-lane highway (National Road 307). A new 4-lane expressway connecting Yinchuan and Qingdao will be completed in 2006. However, development of the rich mineral resources in areas along or near the alignment will require a more economic means of transport than trucks. Thus, TZR will stimulate investment in coal mining, oil and gas development, increased agricultural production through improved access to markets, and tourism.

14. Beyond the area along or near the alignment, TZR will serve as an important route to western China and beyond to Eurasia. Opening western China to markets in eastern China as well as improved export opportunities will greatly facilitate poverty alleviation as well as reduce the income disparities between the east and the poorer west.

- 6 -

SECTION 2: SCOPE OF LAND ACQUISITION AND RESETTLEMENT

2.1 SCOPE AND NECESSITY OF LAND ACQUISITION AND BUILDING DEMOLITION

15. The total length of the Project line is 939.889 route km. TZR is an electrified double-track railway for 508.338 km (Taiyuan/Yuci-Dingbian) and single-track electrified railway for 431.551 mainline km (239.196 km Dingbian-Zhongwei, and 192.355 km Dingbian-Yinchuan). Table 2-1 shows the 3 provinces, 7 prefectures, 22 counties and administrative districts, and the number of villages that will be crossed by TZR. The table indicates that 79 of the 550 villages (14.4 percent of the total) were included in the Resettlement Survey Sample, and a further 75 villages (13.6 percent of the total, for a combined survey sample of 154 villages or 28 percent of the total number of villages) were included in the Socioeconomic Survey Sample that will be utilized in the Poverty and Social Analysis Report.

Table 2-1: Townships and Villages Crossed by TZR Villages in the Villages in the PREFECTURE Total # of Villages in the Townships Villages Crossed Resettlement Socioeconomic PROVINCE County County Crossed by TZR by TZR Survey Sample Survey Sample TAIYUAN CITY Xiaodian 89 2 6 0 3 Qingxu 193 2 5 1 1 S JINZHONG CITY H Yuci 289 1 8 0 0 A LULIANG CITY N Jiaocheng 140 2 7 1 2 X Wenshui 199 4 11 3 4 I Fenyang 289 4 11 1 6 Lishi 193 5 47 12 3 Liulin 257 5 29 7 0 SHANXI Subtotal 1,649 25 124 25 19 YULIN CITY S Wupu 221 1 9 1 4 H Suide 661 4 50 5 10 A Zizhou 550 5 57 0 17 A Hengshan 358 2 31 0 5 N X Jingbian 211 4 49 18 4 I Dingbian 334 6 48 10 4 SHAANXI Subtotal 2,335 22 244 34 44 WUZHONG CITY Yanchi 99 5 52 1 4 Tongxin 221 2 6 0 0 N Hongsiba 83 1 13 0 1 I ZHONGWEI CITY N Zhongning 134 2 26 6 1 G Zhongwei 149 3 48 2 2 X I YINCHUAN CITY A Lingwu 76 2 18 4 2 Yongning 86 2 18 6 2 Jinfeng 28 1 1 1 0 NINGXIA Subtotal 876 18 182 20 12 TOTAL 4,860 65 550 79 75 Source: Total # of villages from county governments; townships and villages crossed by TZR from TSDI; villages in survey samples from Consultant.

16. As detailed in Table 2-2, the Project includes 10 existing stations which will be modified, 1 station which will be demolished, and 53 new stations along the mainline divided into the following categories:

Existing stations with minimal work: 4 Existing stations, which will be expanded: 4 Existing stations, which will be relocated: 2 Existing Station, which will be demolished: 1 Passing stations: 17 (one of which is relocation of an existing passing station)

- 7 -

New passenger stations: 4 New mixed stations (passenger and freight): 21 Stations reserved for future construction: 11

17. The land to be acquired is divided into two categories: (i) farmland and other rural land, which is used and controlled by village and township collectives; and (ii) urban land principally owned by MOR. Most of the land to be used for the Project will be acquired from rural collectives (villages). There is no acquisition of land in urban areas since station expansion will largely utilize existing MOR land and new track which will be laid will use the existing right-of-way of presently operating railways as it passes through urban areas in Yinchuan, Yuci, Zhongwei, and Taiyuan.

18. The land to be acquired will be used for two purposes: the long, thin strip of land for the mainline right-of-way and the larger, somewhat rectangular-shaped tracts for new railway stations and other ancillary facilities. The right-of-way has relatively little impact on the land as it is assembled from small pieces along the alignment, 40 to 60 mu (2.7 - 4.0 ha) per km. The right-of- way will be up to 60 meters (30 meters from the centerline) in width in open areas along the alignment. In tunnels and bridges it will be narrow as appropriate. The station tracts are larger pieces of land ranging from 100 to 500 mu (7 to 35 ha) concentrated in one place, with comparatively greater impact. All new stations, however, will be in rural areas with no need for land acquisition from urban areas.

19. The buildings to be demolished are categorized as rural farmhouses and other farm buildings, schools and other government buildings, industrial buildings belonging to enterprises, and commercial buildings. Farmhouses and buildings make the vast majority of the buildings affected. Housing demolition can also be divided into two categories: the concentrated and the scattered. There is scattered demolition along the rail line and concentrated demolition mainly at the station construction sites, most of which are located near, but not in, urban areas.

2.2 MEASURES TO REDUCE PROJECT IMPACT

20. The Project has been designed by the TSDI. The design of the alignment has been in compliance with the design standards, specifications and mandatory requirements of the State and the MOR, reflecting the development requirements and operating practices. The plan layout of the railway line and the stations and yards to the scale of 1:2000 shows the location of the towns, villages and various buildings and structures, which will be affected by land acquisition and removal of above-ground structures for the Project. TSDI has attempted to minimize the volume of land acquisition and resettlement and reduce as much as possible the negative impacts upon the residents along the railway route.

- 8 -

Table 2-2: Stations by Type and Location along the Mainline No. Station Name Km Post Type of Station 1 Taiyuannan ShiDk 220+500 Existing Station-Expansion 2 Yuci CK0+000 Existing Station-Expansion 3 Xirong CK14+400 New Freight & Passenger 4 Qingxu CK48+050 New Freight & Passenger 5 Jiaocheng CK61+150 New Freight & Passenger 6 Wenshui CK72+400 New Freight & Passenger 7 Fenyang CK86+250 New Freight & Passenger 8 Chujiagou CK103+100 Passing 9 Wucheng CK137+450 Passing 10 Lüliang CK166+800 New Freight & Passenger 11 Liulinbei CK190+500 New Freight & Passenger 12 Wupu CK226+000 New Freight & Passenger 13 Yihezhen CK241+500 New Freight & Passenger 14 Suide CK264+392 Existing Station-Expansion 15 Zizhou CK294+700 New Freight & Passenger 16 Zhoujiajian N/A Passing 17 Weijialou CK330+150 New Freight & Passenger 18 Dijian CK365+850 New Freight & Passenger 19 Yangqiaoban CK382+850 Passing 20 Jingbian CK406+500 New Freight & Passenger 21 Ningtiaoliang CK436+900 Passing 22 Anbian CK463+600 Future 23 Zhuanjing CK494+700 Passing 24 Dingbian CK511+550 New Freight & Passenger 25 Gengerzhuang CK521+900 Future 26 Banyao CK531+300 Passing 27 Hongliugou CK544+000 New Freight & Passenger 28 Hongjingzi CK557+000 Passing 29 Songjiapu CK570+000 New Freight & Passenger 30 Zhuxinzhuang CK578+000 Passing 31 Wangshuikang CK591+800 Passing 32 Laoyanchi CK603+600 Future 33 Taiyangshan CK614+300 New Freight & Passenger 34 Honggouyao CK626+000 New Passenger 35 Shitao CK640+000 Passing 36 Maotoudun CK649+500 Passing 37 Hongsipu CK661+050 New Freight & Passenger 38 Xiaoyanchi CK671+500 Passing 39 Shuangjingzi CK685+800 Future 40 Zhongnindong CK695+600 New Passenger 41 Pangying CK707+000 Passing 42 Huangyangwan CK659+313.39 Existing-Relocate 43 Liujiazhuang BaolanK669+184.32 Existing-Relocate 44 Zhenluopu BaolanK675.490.43 Existing-Demolish 45 Zhongwei BaolanK688+825 Existing 46 Yingshuiqiao BaolanK696+741 Existing 47 Wangerzhuang LCK528+000 Future 48 Dougou LCK533+800 Passing 49 Yanchi LCK546+200 New Freight & Passenger 50 Tianjizhang LCK553+000 Future 51 Niumaojing LCK594+100 New Freight & Passenger 52 Jijiajuan LCK606+800 Future 53 Shijiamiaozi LCK617+600 Passing 54 Hezhuangzi LCK630+000 Future 55 Guyaozi LCK639+500 New Passenger 56 Lijiaxinzhuang LCK651+600 Future 57 Yuejiagou LCK665+200 Passing 58 Xinyuan LCK673+000 Future 59 Lingwu LCK689+000 New Freight & Passenger 60 Yongning LCK695+900 New Passenger 61 Xianfeng LCK705+800 Future 62 Pingjipu BaolanK537+750 Existing Station-Expansion 63 Shuangqukou BaolanK530+372.7 Existing 64 Yinchuan BaolanK524+514 Existing Source: Compiled by the Consultant from data provided by TSDI.

- 9 -

21. During the planning and design of the alignment, TSDI consulted with and took into full account the views and suggestions of local governments and the residents that might be relocated. A number of alternative alignments were assessed utilizing a range of criteria, including minimizing acquisition of cultivated land and building demolition.

22. In order to ensure that people are not disadvantaged in the process of TZR development, efforts have been made to avoid or minimize resettlement effects. If impacts are unavoidable, compensation and rehabilitation measures will help to restore the quality of life and livelihoods of those affected. There will also be opportunities to improve the quality of life particularly for vulnerable groups. Based on this, the following measures have been or will be taken during the design and construction periods in order to minimize resettlement impacts:

2.2.1 Minimize the Project Impact Area.

23. A key design principle was to minimize the land acquisition and house demolition. This was achieved by avoiding cities, towns, and densely populated areas, minimizing land acquisition and locating the alignment close to rather than through villages.

2.2.2 Reduce the Impacts of Construction

24. During the Project planning and design stages, TSDI and MOR have adopted effective measures to reduce Project impacts on economic production and living conditions of local residents. These measures included the following:

♦ Impacts and inconvenience caused by TZR construction have been recognized and appropriate mitigation measures were adopted such as building elevated passage ways or underground passageways to accommodate passage of pedestrians, vehicles, and animals in order to ensure that farming activities are not disrupted. ♦ Construction scheduling was optimized in order to reduce the construction period and to plan house removal and construction during the farming slack season so as to limit the impact on agricultural production. ♦ To the extent possible, wasteland will be used for construction campsites and borrow pits. ♦ Measures have been adopted to reduce the dust and other adverse environmental impacts. Construction companies will be required to comply with the environmental regulations including selection of routes for transporting soil, stone and other materials and prevent falling of materials on roads. 2.2.3 Establish a Feasible Resettlement Plan

25. When land acquisition and building demolition are unavoidable, the Project will ensure that adequate compensation and rehabilitation are provided under the RP in accordance with State and provincial regulations and ADB policy. The preparation of the RP is based on extensive involvement of local officials and AP in consultation, information acquisition, analysis of local socio-economic conditions, and identification of strategies and opportunities for income restoration and protection of AP’s livelihood.

- 10 -

2.3 SUMMARY OF KEY EFFECTS

2.3.1 Land

26. Table 2-3 summarizes the total land to be acquired by prefecture level cities and type of use. A more detailed list by county/district is provided in Annex A. It is estimated that the total area of land to be acquired is 69,845 mu, including 28,843 mu (41 percent) in NHAR, 25,555 mu (37 percent) in Shaanxi Province, and 15,447 mu (22 percent) in Shanxi Province. With 29,265 mu dry land constitutes the largest share (42 percent of the total), followed by paddy land (24,937 mu or 36 percent), orchard land (5,584 mu or 8 percent), vegetable plots (2,414 mu or 3 percent), woodland (2,234 mu of 3 percent) and wasteland (4,528 mu or 7 percent). It should be emphasized that large tracts of land in eastern Shaanxi and NHAR are actually desert areas with no cultivation or agricultural production. Based on field investigations, the Consultant estimates that approximately one-third of dry land is desert land used for seasonal pasture.

Table 2-3: Land Acquisition by Type of Land (mu)

Prefecture Level Total Land Paddy Vegetable Waste Dry Land Orchard Woodland Cities Acquisition Land Plot Land Taiyuan City 4,055 0 542 3171 207 135 0 Jinzhong City 1,555 0 210 1289 42 14 0 Luliang City 9,837 3,577 446 4085 111 68 1550 Total Shanxi 15,447 3,577 1,198 8,545 360 217 1,550 Province

Yulin City 25,555 9,060 4000 7058 1909 1500 2028 Total Shaanxi 25,555 9,060 4,000 7,058 1,909 1,500 2,028 Province

Wuzhong City 17,991 11,638 374 3883 0 287 1809 Zhongwei City 2,644 0 0 2499 145 0 0 Yinchuan City 8,208 4,990 10 2951 0 232 25 Total Ningxia Hui 28,843 16,628 384 9,333 145 519 1,834 Autonomous Region

Grand Total 69,845 29,265 5,582 24,936 2,414 2,236 5,412 Source: TSDI for Shanxi and Shaanxi. NHAR DRC for Ningxia Hui Autonomous Region

27. With 36.6 percent of the total land area to be acquired, Yulin City contributes the highest, followed by Wuzhong City (25.8 percent), Luliang City (14.1 percent), and Yinchuan City (11.8 percent). At the lower end are Jinzhong City (2.2 percent), Zhongwei City (3.8 percent), and Taiyuan City (5.8 percent).

28. During the construction of the Project, some land will have to be used on a temporary basis for access roads to construction sites, assembling or construction of Project components such as parts of bridges and culverts, storage of overburden, and construction workforce facilities and camps. The area of land to be temporarily occupied will not be finalized until construction commences. Table 2-4 summarizes the total land to be occupied temporarily for these purposes by prefecture and type of use. A more detailed list by county/district is provided in Annex A. The estimated area of land to be temporarily occupied is 19,415 mu. The land temporarily occupied will be for a duration of generally 2 to 3 years. To the extent possible, the land temporarily occupied will be dry land (i.e., less productive land) or vacant land. When the land is returned to the villages, the contractors will restore it to its original or better condition. Construction access roads will be turned over to counties or villages for their use or returned to their original or better condition. The construction contracts to be entered with construction companies will include clear provisions for restoration of temporarily occupied land to its original condition before return to the village. The utilization and restoration of temporary occupied lands will be monitored by the township land administration bureaus.

- 11 -

Table 2-4: Temporary Land Use Along the Alignment (mu) Prefecture Level Cities Dry Land Wasteland Total Taiyuan City 0 0 0 Jinzhong City 0 9 9 Luliang City 3,894 4,786 8,680 Total Shanxi Province 3,894 4,795 8,689

Yulin City 4,192 7,415 11,607 Total Shaanxi Province 4,192 7,415 11,607

Wuzhong City 800 2,064 2,864 Zhongwei City 500 1,884 2,384 Yinchuan City 0 2,530 2,530 Total of Ningxia Hui 1,300 6,478 7,778 Autonomous Region

Grand Total 9,386 18,688 28,074

Source: TSDI for Shanxi and Shaanxi. NHAR DRC for Ningxia Hui Autonomous Region 2.3.2 Buildings

29. The estimated floor area of buildings to be demolished by prefecture for the Project is summarized in Table 2-5. A more detailed list by county/district is provided in Annex A. The total floor area of buildings to be removed is estimated at 428,393 m2, of which residential buildings and other farm structures account for 347,203 m2, or 81 percent of the total; factory buildings and workshops account for 20,638 m2, or 5 percent of the total; other industrial structures account for 55,553 m2, or 13 percent of the total; and school buildings account for 5,000 m2, or 1 percent of the total. On average, the amount of building demolition is estimated at 456 m2 (or four to five houses) for every linear kilometer of the railway line, inclusive of the stations and their associated facilities.

Table 2-5: Demolition of Buildings and Other Structures (m2) Workshops and Industrial Prefecture Level Cities Residential Units(a) Schools Total Buildings Taiyuan City 2,523 4,056 6,579 Jinzhong City 45,818 5,456 51,274 Luliang City 64,127 6,226 3500 73,853 Total Shanxi Province 112,468 15,738 3,500 131,706

Yulin City 85,203 3,600 1500 90,303 Total Shaanxi Province 85,203 3,600 1,500 90,303

Wuzhong City 9,201 0 0 9,201 Zhongwei City 39,274 28,477 0 67,751 Yinchuan City 101,057 28,377 129,434 Total of Ningxia Hui 149,532 56,854 0 206,386 Autonomous Region

Grand Total 347,203 76,192 5,000 428,395 Source: TSDI for Shanxi and Shaanxi. NHAR DRC for Ningxia Hui Autonomous Region. (a) Based on average of 101.6 square meters per house in the TSDI resettlement survey sample, the number of houses is estimated at 3,417.

- 12 -

2.3.3 Affected Persons 30. The estimated population affected by land acquisition and building demolition is shown in Table 2-6. Based on the Chinese standard for impact assessment, the equivalent of 11,803 would lose all their land and agricultural livelihoods and 11,956 will have their houses demolished. Although, it is estimated that the number of households to be relocated will be 3,417, approximately one-half of the households will lose only out buildings, animal pens, and other farm structures, It is estimated that the number of to be relocated is 1,430 (425 households).

Table 2-6: Affected Population by Land Acquisition and Building Demolition Total Farm Land (Orchards, Paddy Population Land, and Vegetable Total Dry Land Average Dry Affected by Average HHs Affected Prefecture Level Plots) Acquisition Average Farm Land Acquisition Land per Land Number of by Land Cities (mu) per Person (mu) (mu) Person (mu) Acquisition People/HH Acquisition Taiyuan City 3,920 1.5 03.02,613 3.86 677 Jinzhong City 1,541 2.9 05.8531 3.19 167 Luliang City 4,642 1.9 3,577 5.7 3,071 3.65 841 Yulin City 12,967 8.3 9,060 24.9 1,926 3.70 521 Wuzhong City 4,257 8.1 11,638 24.3 1,004 3.78 266 Zhongwei City 2,644 2.8 08.4944 3.70 255 Yinchuan City 2,961 2.7 4,990 8.1 1,713 3.26 525 Total 32,932 29,265 11,803 3,252

Population Affected by HHs Affected Number of Houses Land by Land Demolition of Demolished based Average Population Population Acquisition Acquisition Prefecture Level Housing Units on Average 101.6 Number of Affected by Affected by and/or and/or Cities (sq.m) sq.m/house People/HH Demolition Both Factors Demolition Demolition Taiyuan City 2,523 25 3.86 96 1,030 1,679 435 Jinzhong City 45,818 451 3.19 1,439 280 1,690 530 Luliang City 64,127 631 3.65 2,304 1,860 3,514 963 Yulin City 85,203 839 3.70 3,103 1,210 3,819 1,032 Wuzhong City 9,201 91 3.78 342 520 827 219 Zhongwei City 39,274 387 3.70 1,430 470 1,905 515 Yinchuan City 101,057 995 3.26 3,243 690 4,265 1,308 Total 347,203 3,417 11,956 6,060 17,699 5,002 Source: Farm land and dry land acquisition figures from Table 2-3; Average Farm Land per Person from Annex B; Average dry land per person Consultant's estimate; Average Number of People per HH from Provincial 2005 Statistical Yearbooks reporting year 2004 data; Demolition of Housing Units from Table 2-5; Average area of house and Population Affected by Both Factors from TSDI.

31. The number of those affected by land acquisition is based on the assumption that people lose all of their land holding and need full economic restoration. However, since the alignment is a narrow strip of land, most of the AP will only lose a small part of their land holding. Based on other railway projects and the low population density in the Project area, it is estimated that the average loss of land per household would be 15 percent, which means the number of partially affected people would be in the order of 78,687, of which those losing more than 25% would be about 8,000 (i.e., 2,000 households having a significant loss of livelihood). An estimated 1,150 Hui households will have partial lose of land, of which about 200 households would have a significant loss. An accurate account of the number of AP will be available after completion of the detailed measurement surveys.

2.4 PRIMARY RESPONSIBILITIES FOR LAND ACQUISITION AND RESETTLEMENT

32. MOR is negotiating agreements with the NHAR and Shaanxi and Shanxi provinces. These agreements will allocate responsibility for the full costs of acquiring land and compensating those who lose property or livelihood as a result of the construction of TZR (other than MOR itself). Supplementary Annex 7 includes the agreements and minutes of meetings held between the MOR and the three provinces regarding funding obligations for land acquisition and resettlement. Although these minutes and agreements do not cover the entire range of compensation standards which will be used during Project implementation, the documents included in the Supplementary Annex 7 show the general intent of the three provinces to provide appropriate compensation consistent with replacement value as required under PRC law, as their equity in the Project.

- 13 -

33. MOR and the three provincial governments are discussing establishment of a joint venture entity that will own and operate TZR. Each province’s contribution to the equity is envisioned to be the cost of land acquisition and resettlement. Negotiations are expected to be completed and the joint venture company established by mid-2006. The local prefecture and county governments will be tasked for resettlement implementation. The railway construction support offices (RCSO) and land administration bureaus of local governments will jointly undertake land acquisition, housing demolition, and resettlement tasks.

34. Local officials at the county and township levels are responsible for carrying out resettlement and paying compensation to the owners of the property taken (or to those with an effective right to use) and to those whose incomes are disrupted. The central question of who gets compensated for what is discussed in Section 4.3 under the heading “Property Ownership and Structure of Payments”.

2.5 STATION LINK AND CONSTRUCTION ACCESS ROADS

35. Land acquisition and resettlement for construction access roads are covered in the RP. Additional roads to connect new passenger and freight railway stations to existing roads (“Station Link Roads”) are needed for some stations. The existing road network is relatively well developed along most of the alignment and the region has a functioning network of rural roads, which link remote villages with town and urban centers.

36. As shown in Table 2-7, there will be a total of 39.17 km of new station link roads connecting 24 new stations to the existing road networks. In many cases the length for the station link roads is less than one km. In seven locations, particularly in the sparsely settled areas of the alignment the length of the station link road is 3 km or more with the longest in Jingbian at 5.15 km.

- 14 -

Table 2-7: Station Link Roads Estimated New Road Land Station Name Km Post Type of Station (km) Acquisition (mu) Xirong CK14+400 New Freight & Passenger 0.75 45.05 Qingxu CK48+050 New Freight & Passenger 0.50 30.03 Jiaocheng CK61+150 New Freight & Passenger 0.55 33.03 Wenshui CK72+400 New Freight & Passenger 0.90 54.05 Fenyang CK86+250 New Freight & Passenger 4.50 270.27 Lvliang CK166+800 New Freight & Passenger 0.75 45.05 Liulinbei CK190+500 New Freight & Passenger 0.35 21.02 Wupu CK226+000 New Freight & Passenger 1.10 66.07 Yihezhen CK241+500 New Freight & Passenger 0.15 9.01 Zizhou CK294+700 New Freight & Passenger 0.15 9.01 Weijialou CK330+150 New Freight & Passenger 0.17 10.21 Dijian CK365+850 New Freight & Passenger 3.75 225.23 Jingbian CK406+500 New Freight & Passenger 5.15 309.31 Dingbian CK511+550 New Freight & Passenger 3.20 192.19 Hongliugou CK544+000 New Freight & Passenger 3.80 228.23 Songjiapu CK570+000 New Freight & Passenger 0.90 54.05 Laiyangshan CK614+300 New Freight & Passenger 1.70 102.10 Honggouyao CK626+000 New Passenger 3.15 189.19 Hongsipu CK661+050 New Freight & Passenger 1.00 60.06 Zhongnindong CK695+600 New Passenger 0.75 45.05 Yanchi LCK546+800 New Freight & Passenger 3.00 180.18 Niumaojing LCK594+100 New Freight & Passenger 0.90 54.05 Guyaozi LCK639+500 New Passenger 1.30 78.08 Lingwu LCK689+000 New Freight & Passenger 0.70 42.04 Total 39.17 2,352.55 Source: Consultant

37. The typical station link road will have a 12-meter road bed for two lanes and a 4-meter shoulder at each side. The 39.17 km of station access roads will, therefore, require a 20-meter wide strip of land and an additional 10-meter width on both sides for right-of-way, which adds up to a total land area of 156.84 ha (2,352.55 mu). Station locations are consistent with local development plans. Continued coordination between MOR and local governments during construction and implementation will be maintained. The Consultants verified with the local governments during the field visit in November 2005 the length and location of the station link roads and confirmed that local funding will be provided for this purpose. It was also confirmed that any land acquisition for the new roads will be undertaken in full compliance with appropriate State and provincial government laws for land acquisition. MOR will ensure that local governments prepare resettlement plans and acquire land for station link roads pursuant to the requirements of the Land Administration Law.

38. Land acquisition and resettlement for construction access roads have been estimated by TSDI as approximately 657.6 km dispersed along the 939.889 km alignment. The cost and resettlement requirements for these roads are included in the Project and in this RP. At the completion of the Project these roads will be turned over to the local government for their use as local roads in accordance with their respective transport network development plans.

2.6 VILLAGE IMPACTS

39. The Consultant conducted a survey of 79 villages as part of the resettlement survey. Annex D includes a summary of the data collected in the village survey. Some 28 of the 79 villages surveyed reported that they estimated an average loss of land of 256 mu per village out of the average 6,807 mu of cultivated land per village. This represents a loss of 3.8 percent of cultivated

- 15 -

land per village. The land loss to TZR is relatively low mainly because the Project railway will traverse an area with large tracts of land distributed among villages.

40. Based on the village survey data obtained in November 2005, two villages indicated that they would lose more than 20 percent of their land. Jiaonidong and Hanhuochang are both in , Shaanxi. Neither is an officially designated poverty village. In the Consultant’s household survey, the 17 Hanhuochang households had an average net income per capita of CNY 1,502, while the 17 households in Jiaonidong had an average net income per capita of CNY 784.

41. Both villages are heavily reliant on agricultural production of grains and raising livestock. Jianidong also grows potatoes (for which the area is well known) and sunflowers. Hanhuochang additionally grows vegetables, and because it is close to a township, people work for the wages for the local government and in nearby enterprises.

42. Hanhuochang has 492 mu of cultivated land and 1,200 mu of wasteland. It expects to lose 145 mu (29.47% of cultivated land) to TZR. Village officials estimated that a total of 21 households would be affected by land acquisition. Of these, 6 would also lose their housing. There are 75 households in the village with a total population of 245 (132 males and 113 females).

43. Jiaonidong has 268 mu of cultivated land and 3,000 mu of wasteland. It expects to lose 150 mu (55.97% of cultivated land) to TZR. Village officials estimated that a total of 23 households would lose land and 10 of these would also lose their housing. There are 56 households in the village with a total population of 263 (143 males and 120 females). In terms of affected households (41 percent of households in the village) the estimated land loss (55.97 percent) appears to be an overestimate. On the other hand, the number of affected households could be underestimated by the village. This inconsistency will be resolved during future field investigations and the resettlement census.

44. Neither village has prepared a resettlement plan, nor indicated if and how land will be reallocated for affected households. The estimated land to be acquired could be an overstatement given that final alignment staking was not completed at the time of the survey. The Consultant’s survey of villages identified another 11 which indicated a loss of land of between 10 percent and 20 percent. Given the potential magnitude of the land loss, attention will be given to these villages to ensure that they are not adversely affected during the resettlement process. The resettlement census for compensation will fully identify the special needs of these villages including that a number of relatively low-income households could be affected, and the final RP will reflect them in recommending strategies for resettlement. Specifically, a concrete set of actions will be laid out that the villages can utilize to fully exploit the opportunities provided by the Project. This will be based on the villages defining their opportunities, and with assistance from appropriate officials, targeting these opportunities prior to compensation payments in order to maximize benefits from the Project.

45. MOR and local officials are very familiar with the resettlement process. Utilizing the Project as a mechanism to raise people’s living standards conforms with national objectives to reduce poverty. As described in more detail in Section 3, there are funds and human resources available to assist the potentially seriously affected villages, and ensure that they fully benefit from the opportunities created by the Project. MOR recognizes that the Project can be used as a means to dramatically improve people’s living standards, and can thus serve as a model for future infrastructure resettlement projects.

- 16 -

SECTION 3: SOCIOECONOMIC PROFILE AND PROJECT IMPACT

3.1 OVERVIEW

46. Detailed information on the socioeconomic profiles of the 7 prefectures and 22 counties along the alignment are provided in Supplementary Annex 6. This annex includes for each prefecture and county information on the structure and performance of the local economy, natural resources, agricultural production and employment, poverty situation and programs, and transport infrastructure. Maps are provided for each country showing the location of the TZR alignment, surveyed villages on and off the alignment, major roads and other infrastructure.

47. The population of the counties and districts on the TZR alignment are overwhelmingly rural except at the ends of the alignment (Xiaodian, Yuci, and Jinfeng) and in Lishi, the prefecture city of Luliang. Even in areas with high urban population, TZR does not affect urban people because the Project facilities are either located outside the urban areas or utilize the existing MOR rights-of-way. Table 3-1 shows the total population, the number of minorities, the number of persons living in poverty, and percent living in poverty and percent living in rural areas. Noticeable are the relatively high incidences of poverty from the western part of Shanxi, through Shaanxi, and the eastern part of Ningxia. Poverty will be a recurring issue throughout the analysis of the Project’s impacts.

Table 3-1: Population of Affected Counties PROVINCE Population Minorities Persons in % % County (000) (000) Poverty (000) Poverty Rural SHANXI Xiaodian 503.0 5.000 7.0 1.39% 29.22% Qingxu 337.0 0.000 3.5 1.04% 82.49% Yuci 542.0 0.000 0.0 0.00% 33.76% Jiaocheng 220.0 0.000 52.8 24.00% 74.09% Wenshui 418.0 0.000 0.0 0.00% 89.71% Fenyang 397.0 0.000 18.8 4.74% 81.23% Lishi 244.0 0.016 53.0 21.72% 49.59% Liulin 301.2 0.000 70.0 23.24% 81.34% Subtotal 2,962.2 5.016 205.1 6.92% 63.21% SHAANXI Wupu 82.9 0.009 26.4 31.85% 78.77% Suide 345.0 0.092 75.6 21.91% 88.12% Zizhou 310.0 0.000 110.0 35.48% 89.84% Hengshan 334.0 0.000 82.0 24.55% 89.82% Jingbian 277.0 0.000 158.0 57.04% 89.89% Dingbian 317.0 1.362 87.0 27.44% 84.54% Subtotal 1,665.9 1.463 539.0 32.35% 85.29% NINGXIA Yanchi 161.0 3.691 52.0 32.30% 70.19% Tongxin 325.0 271.418 80.0 24.62% 74.15% Hongsiba 141.0 86.634 122.0 86.52% 88.65% Zhongning 294.0 49.424 41.0 13.95% 65.31% Zhongwei 347.0 5.966 22.9 6.60% 63.98% Lingwu 237.0 111.600 20.3 8.57% 51.48% Yongning 204.0 37.406 24.0 11.76% 76.96% Jinfeng 138.0 46.768 4.0 2.90% 30.46% Subtotal 1,847.0 612.907 366.2 19.83% 65.73% TOTAL 6,475.1 619.386 1,110.3 17.15% 69.72% Source: County data provided by counties.

48. Because the Project will utilize existing rail line areas (for track upgrades and/or doubling of track) at the ends of the alignment, there will be no impact on current urban or peri-urban development. The selected alignment purposely avoids entering urban areas wherever possible. Where new track is laid along the majority of the alignment or where new stations are built, they will be outside urban areas. Thus, the Project’s impacts will be essentially on rural areas.

- 17 -

3.2 SOCIOECONOMIC SURVEY OF AFFECTED VILLAGES, HOUSEHOLDS AND ENTERPRISES

49. A socioeconomic survey of 1,100 households and 4,268 people affected by resettlement was conducted by TSDI in April 2005. An additional 1,319 households and 4,336 people were surveyed by the Consultant in October-November 2005.3

50. Supplementary Annex 5 includes a copy of the survey instruments utilized in the October- November 2005 survey. The Consultant completed the data analysis and integrated the analysis into this RP. The village survey form was completed for 79 villages that were identified as being on the alignment and would be somewhat affected by TZR. In addition, county officials were requested to survey affected schools, factories and other enterprises in their districts. There are 21 affected enterprises and institutions that are discussed in Section 3.5

51. The October-November survey was focused on finding and surveying the most substantially affected households. The sample was selected using the following procedure: TSDI design engineers and experts provided a list of the villages that would be the most affected by TZR. The Consultant in consultation with TSDI reviewed detailed maps for the entire alignment to confirm and augment the list. The detailed maps show the location of the proposed railway, topography, roads, villages and urban areas.

52. Detailed data and analyses of the surveys are provided in Supplementary Annex 8. County and prefecture socioeconomic characteristics and data are presented in Annex B and Supplementary Annex 6. This includes in Supplementary Annex 6 maps of each county showing the alignment and the villages surveyed on and off (for the Poverty and Social Analysis) the alignment. The information presented in Supplementary Annex 8 includes household socioeconomic characteristics, household income by source, and socioeconomic information by vulnerable groups (women-headed households, minority-headed households, households with a disabled member, and poverty households).

53. It should be emphasized that all AP are rural in the PIA and therefore, the analysis of Project impacts in this section is focused only on the rural population along the alignment. Since there are no urban AP, it would be misleading to include poverty and socio-economic data on urban households when the Project impacts are solely on rural households.

3.3 AFFECTED VILLAGES

54. Table 3-2 shows demographic data for the 79 villages out of 550 villages crossed by the alignment and preliminarily identified as somewhat affected. The “persons in poverty” are from households that have been designated “poor” by local officials. As noted above, poverty is an issue in areas affected by TZR, and is especially noticeable in western Shanxi and Shaanxi provinces.

3 During October-November 2005, an additional 1,200 households were surveyed in areas that are off but near the alignment, and are discussed in the Poverty and Social Analysis Report.

- 18 -

Table 3-2: Demographic Data for Somewhat Affected Villages Indicator Shanxi Shaanxi Ningxia Total Population 26,762 47,377 34,417 108,556 Males 14,379 24,403 17,666 56,448 Females 12,383 22,974 16,751 52,108 Hui 0 0 8,206 8,206 Other Minorities 0167 Persons in Poverty 5,404 12,896 4,950 23,250 Poverty as % of Total Population 20% 27% 14% 21% Adult Workforce 16,897 23,279 15,017 55,193 Male Workforce 10,386 12,943 8,436 31,765 Female Workforce 6,511 10,336 6,581 23,428 Illiterate Male Workers 693 1,899 377 2,969 Illiterate Female Workers 753 1,818 322 2,893 Male Out Migration 2004 128 102 137 367 Female Out Migration 2004 87 139 221 447 Male In Migration 2004 62 75 3 140 Female In Migration 2004 203 130 220 553 Male Births 2004 117 145 122 384 Female Births 2004 73 107 109 289 Males Attending University 190 365 190 745 Females Attending University 160 282 118 560 Source: Consultant Village Survey.

55. As expected, Hui are concentrated in the NHAR, constituting 23.8 percent of the total population in the surveyed villages in that province. The other minorities (6 in Ningxia and 1 in Shaanxi) are Mongols.

56. In addition to poverty, an important consideration in assessing Project impacts and developing income restoration strategies is the rate of illiteracy amongst the adult workforce because it is a factor that limits the type of jobs for which one can qualify. According to the village survey, in Ningxia, the illiteracy rate among adult workers is 4.6 percent, in Shanxi it is 8.6 percent, and in Shaanxi it is 16 percent. On a positive note, TZR construction will require thousands of unskilled workers for a range of labor and service jobs, and literacy is generally not required for these positions. Moreover, illiteracy does not necessarily mean that one is not trainable, nor does it mean that literacy cannot be achieved. The village surveys strongly indicated support for training as a component of income restoration strategies that will be discussed below.

3.4 AFFECTED HOUSEHOLDS

57. The Consultant’s household survey summarized in Supplementary Annex 8 provides detailed data on affected households. As discussed above, a total of 1,319 households were surveyed, representing a population of 4,336, and with an average annual net income per capita of CNY 3,291.

58. In the household survey, the Hui are the only ethnic minority represented, because other minorities are very few and scattered amongst Han villages or in towns (i.e., not directly affected).. Households with a disabled or infirmed member constituted only 4.9 percent of all households, compared with 7.5 percent in the TSDI survey of 1,100 households. Women-headed households constituted only 0.8 percent of the Consultant’s surveyed households, compared with 3 percent in TSDI’s survey. County officials all along the alignment indicated that it is relatively rare to find women-headed households in their rural areas because unmarried women are generally living with families. In cases where the male was away working and the female identified herself as the head of the household, these were included in the women-headed household group. In cases where the female indicated that her husband was the head of the household, then they were not included in this group. However and in any event, the numbers suggest that women-headed households could be under-represented in the survey.

- 19 -

59. In terms of basic house data, the average area of cultivated land per household in the TSDI survey was 12.53 mu (3.23 mu per capita), compared with 9.12 mu (2.77 mu per capita) in the Consultant’s survey. The TSDI survey showed an average house size of 101.58 square meters compared to 132 square meters in the Consultant’s survey. It should be noted that one household in the Consultant’s survey with a large area (150 mu) was eliminated from the calculation for Wenshui County, as were 4 households with house sizes above 1,000 square meters.

3.5 AFFECTED ENTERPRISES, SCHOOLS AND OTHER EMPLOYERS

60. The county officials were asked to survey affected schools, factories and other enterprises in their districts. Given that the alignment was purposely selected to avoid developed areas, the number of factories, enterprises and facilities that will be affected are relatively low. However, it should be noted that people are aware that a rail line will be built and are waiting to hear on the final alignment before preparing resettlement plans. Twenty-one responses (Annex C lists the 45 potentially affected enterprises and institutions) were received from 7 counties, for 15 factories, 1 elementary school, 4 government facilities and 1 technical training institute.

61. These enterprises and schools employ more than 1,124 people. All of these enterprises and institutions, except 3, intend to rebuild in the same neighborhood. Of the 3 indicating that they were uncertain as to rebuilding, all cited lack of funds as the constraint. This includes the technical training institute that has considerable available land (1000 mu) to rebuild if in fact its buildings are demolished.

62. The 15 factories employ 980 people. The elementary school and the government facilities will rebuild in the same neighborhood. The elementary school is in Dingbian and has 11 employees, 130 students, and 1,170 square meters of buildings.

63. For the whole project, factories and other commercial organizations will lose 76,192 square meters of buildings, equivalent to 18 percent of the 428,393 square meters of buildings to be demolished. The schools will lose 5,000 square meters, equivalent to 1.2 percent of the square meters of buildings to be demolished.

3.6 PROJECT IMPACT

3.6.1 The Affected Inventory

64. The Consultant survey of 79 villages and 1,319 households covering 4,336 people in addition to the TSDI survey of 1,100 households and 4,268 people provides a substantial baseline to assess the impact of the Project. As noted in Section 2, some 34,035 people will be affected by loss of land, loss of home, or both. The average annual net income per capita for the households in the Consultant’s survey is CNY 3,291. In the household survey, there are 268 households and 991 people with annual net per capita incomes below CNY 965. Local officials along the alignment indicated a poverty line ranging from CNY 924 to CNY 965.

65. Approximately 69,845 mu of land will be permanently acquired, of which 32,932 mu is farm land (paddy, irrigated, and orchard land) and 29,265 mu is dry land. An additional 28,074 mu will be temporarily acquired primarily for use in conjunction with line, tunnel, and bridge construction. A total of 428,393 m2 of buildings will be demolished, of which residential housing units and other farm structures accounts for 347,203 m2 or 81 percent of the total, factory buildings, workshops, and other industrial structures 76,192 m2 or 18 percent, and schools 5,000 m2 or 1.2 percent of the total.

66. Supplementary Annex 8 presents data on the 79 villages with respect to population, household size, percent minority, percent designated as poverty households, literacy levels, cultivated land, perceived anticipated land that will be lost to TZR, schools and enterprises affected, whether a resettlement plan has been developed, and the main method to replace income lost because of the loss of cultivated land to TZR.

- 20 -

3.6.2 Institutional Capacity and Resettlement Issues

67. The PRC has extensive experience in resettlement resulting from railway and highway construction. Nearly all of the local government units (prefectures and counties) along the alignment have recently completed major resettlement projects including those related to expressway construction in all the provinces. Officials in all prefectures know the applicable PRC and provincial laws. Officials have indicated there are few, if any, problems in replacing housing and other buildings taken for railway or highway projects. The goal of insuring that people are at least as well off after the project than they were before is always met in terms of housing and buildings. Similarly, there are few, if any, problems in compensation for standing crops, fruit trees and other “attachments to the land” that belong to individuals and families or to enterprises and private businesses. These payments are regarded as appropriate and fair.

68. To ensure that compensation payments are adequate and fair for the Project, appropriate stakeholder consultations, information disclosures, census arrangements, relocation and compensation payments, and monitoring programs will be developed and implemented.

69. The Consultant’s and TSDI’s surveys provide a set of baseline information for a sample of 2,419 households. Completion of the final design will provide the additional data for a more detailed analysis of AP and impacts. Railway surveyors expect that only a small portion of the total number of households will lose all their land. As noted above, responses on the amount of land and buildings that will be lost are based on perceived losses because the layout for the alignment was not yet available at the time of the surveys, and do not necessarily reflect the amount of land that will be acquired from a specific household. Most villages will lose far less land, and most villages should be able to accommodate the needs of those that will lose land. In the remaining cases, compensation will be provided4. Appropriate planning and monitoring systems will ensure that AP are adequately compensated.

70. Although most households will be able to continue farming through land reallocation in the same village, when households lose their land and must cease farming, major social, economic and cultural changes often result. These include shifts in time allocation from household food production to wage or business activities that could lead to increases in the amount of time women spend on food production if the male becomes a wage earner or business operator. This could be especially pronounced if the male is working away from his home area, and the woman becomes the effective head of the household. This would mean that the structure of the household has changed, and could include divergence in lifestyles if the male is working in an urban area in Guangdong or . Interestingly, more than half of those in the household survey who expect to lose some or all of their land, prefer to be resettled in non-agricultural occupations. Resources including training and skills development, preferential hiring practices by contractors along the alignment, and access to capital, will be made available to facilitate the transition from farming to wage employment or business ownership. Importantly, there are currently a limited number of wage-earning or business opportunities in some of the areas along the alignment, which means that even when people prefer non-farming activities, they will likely have to continue farming unless they choose to work away from the PIA.

71. As will be detailed further below, many farmers are already under-employed. The amount of land available to them is not sufficient to provide them with full-time work, and is not sufficient to provide their families with an adequate income. Many farm families already engage in small business. Many members of farm families work as laborers locally and elsewhere in PRC, sending money back to those remaining at home. As a result, the transition out of farming may not be as painful or extreme as it is in settings where farming is able to provide an adequate family income.

4 While the perceived losses may not reflect the amount of land that may be acquired, perceptions of potentially affected persons are an indicator of issues such as the types and levels of impacts that will result from the Project. This is part of the consultative process that will be followed up with precise land acquisition numbers resulting from final staking, and detailed in the resettlement census.

- 21 -

72. Additionally, in October 1999 PRC adopted a goal of reducing the rural proportion of the population from 73% to 50% by 2015. Reduction of the agricultural population will serve to increase rural income by raising the amount of cultivated land per capita for the remaining rural population. Since urban people produce more GDP per capita, increasing urbanization will also promote growth of personal income. Either a micro-urbanization or a village relocation strategy are being pursued in the TZR counties as they focus upon increasing the development of existing, small, local urban centers, and/or upgrading the living conditions of villagers. Those affected by TZR resettlement will be able to benefit from these programs.

3.6.3 Impact Analysis and Vulnerable Households

73. All rural households who lose a large portion of their land or their house to TZR are potentially vulnerable, especially if they are poor, elderly or disabled. If resettlement does not work well for them, their household and economic well-being may be at substantial risk.

74. Survey data were reviewed to determine if particular categories of households that are the most vulnerable, including those with disabled members, headed by women, of minority nationalities, or of the poor, are at significant additional vulnerability because of these conditions.

75. Table 3-3 shows the potentially vulnerable households by province in the Consultant’s household survey. Using a per capita net income of less than CNY 965 results in a total of 268 households, or 20.3 percent of the total sample. As the average net income per capita row shows, this group is very poor, with a net income per capita of only CNY 614, or 18.7 percent of the net income per capita of the total sample of CNY 3,291. More detailed income data by province and county are presented in Supplementary Annex 8.

Table 3-3：Vulnerable Households (#HHs) Province Shanxi Shaanxi Ningxia Total As % of Total

# of HHs in Sample with Net Income

577 626 626 614 18.7% Poor HHs Average Net Income Per Capita All HHs in Consultant Survey Sample 393 557 369 1,319 100.0% of which # HHs with Disabled Member 28 9 27 64 4.9% Disabled HHs average Net Income Per 1,708 775 3,548 2,353 71.5% Capita # Women-headed HHs 6 0 4 10 0.8% Women Headed HHs Average Net Income 1,006 0 2,757 1,706 51.9% Per Capita Minority HHs 0 0 52 52 3.9% Minority HHs Average Net Income Per 0 0 1,953 1,953 59.3% Capita

All HHs Average Net Income Per Capita 6,397 1,835 3,072 3,291 100.0% Source: Consultant

76. Included in this group of 268 poor households are 13 households with a disabled or infirmed member and 4 women-headed households (there were no women-headed households with a disabled or infirmed member) in Shanxi; 2 households with a disabled or infirmed member in Shaanxi; and 6 households with a disabled or infirmed member and 7 Hui households (there were no Hui households with a disabled or infirmed member) in Ningxia.

- 22 -

77. An important factor in determining a household’s net income per capita and poverty is the number of sources of income activities. While nearly all households report income from farming, income from forestry, orchards, livestock, business and wage or salaried employment are other important sources, and those households with multiple income sources have higher net incomes per capita, and are thus less vulnerable to a single disruptive event such as a flood or freeze, or a more prolonged condition such as a drought or sickness that affects an income earner.

78. For example, in Shanxi, income from business was cited by 56.5 percent of responding households in the total sample but by only 33.3 percent of households with a disabled or infirmed member, 24.2 percent of poverty households, and 20 percent of women-headed households. Similarly, income from wages was cited by 42.9 percent of responding households but by only 29.2 percent of households with a disabled or infirmed member, 21 percent of poverty households, and 20 percent of women-headed households.

79. Being largely dependent on farming income, these households are often short of able- bodied labor and the capital necessary to increase productivity through such measures as increased use of fertilizers, purchases of higher quality seeds, and tractors. Moreover, being largely dependent on income from less-intensive farming means that these households are even more vulnerable to droughts, freezes, floods, and crop price fluctuations.

80. In Shaanxi, 50.5 percent of households received income from livestock, 22.8 percent from business income, and 9.8 percent from wages. The households with a disabled or infirmed member received no income from any of these sources. In the poverty households, 33 percent received income from livestock, 17.3 percent from business income, and 4.9 percent from wages.

81. In Ningxia, poverty households are active in livestock (35.3 percent versus 17.9 percent for the total sample), and business (29.4 percent versus 29.9 percent for the total sample). However, only 11.8 percent of the poverty households receive income from wages versus 45.3 percent for the total sample.

82. The 4 women-headed households in Ningxia also have multiple income sources and this is reflected in their higher net income levels (90 percent of the average for the total sample). However, the sample size is a very small number on which to base any generalizations, and there were other women-headed households that did not report income levels or sources, suggesting that there could be some poor vulnerable ones similar to those found in the other provinces.

83. The Ningxia households with a disabled or infirmed member indicate a range of income levels and sources. As noted, there are 6 of these included in the poverty households. However, the average net income per capita for this group is CNY 3,548, or 115 percent of the average for the total sample. The well off households clearly are drawing income from a range of sources including forestry, livestock, business and wages at rates that are near or above those for the total sample.

84. The Hui households represent a range of income levels and sources. Hui are concentrated in 4 counties or districts in NHAR: Jinfeng, Lingwu, Yongning, and Yinchuan. In the household survey sample for NHAR, there are 7 poor Hui households out of total 52 Hui households. The poor Hui households are located in Lingwu (5 households) and Yongning (2 households). All of the 16 households in Jinfeng in the household survey are Hui, and have an average net income per capita of CNY 2,844, or 83.5 percent of the average per capita income of CNY 3,407 for Jinfeng (Annex B) and 108.5 percent of the national average rural net income per capita in 2003. It should be noted from Table 3-3 that in the survey sample the average net income per capita of Hui households (CNY 1,953) in NHAR is 63.6 percent of the average net income per capita of all households in NHAR (CNY 3,072).

85. Moreover, Hui have very high participation rates in business (51.9 percent versus 29.9 percent for the total sample) and raising livestock (30.8 percent versus 17.9 percent for the total

- 23 -

sample). In other words, Hui households have developed multiple sources of income, and have average net incomes per capita that are similar to those for the total sample.

86. There are poverty households that are Hui but these are because of root causes of poverty not because of their ethnicity. Worth noting is that over the last 15 years a number of Hui along with Han villagers from poorer parts of the province have been relocating closer to the major urban areas as a means of improving their living conditions and reducing poverty. While there have been benefits from this program, the simple fact is that a number of those relocated were very poor prior to their move, and although their living conditions have improved, not all have escaped poverty.

87. As the above discussion highlights, poverty reflects 1) lack of opportunity to earn income from wages and business in, for example, some of the less developed areas of Shaanxi compared to those areas near the large urban centers in Shanxi and Ningxia, 2) lack of resources to establish a business or diversify into other agricultural activities such as forestry, orchards and livestock, 3) reliance on relatively less productive agricultural land that is not irrigated because of lack of water in the western areas of Shanxi, Shaanxi, and the eastern areas of Ningxia, and 4) fewer able-bodied workers in a household. Training and literacy are other important factors but diversified income sources stands out as a key factor in determining a household’s income level.

88. As Table 3-3 shows, those households with net incomes per capita below CNY 965 are generally quite poor, with an average net income per capita of CNY 614. This is absolute poverty and clearly shows that these households will be highly vulnerable to any disruptions affecting their limited income earning activities caused by land acquisition and/or resettlement. These households will have little savings to tide them over during land acquisition and/or resettlement, and will require compensation funds in an early and timely manner in order to maintain basic subsistence standards.

89. Similarly, any household that includes a disabled or infirmed member, has elderly, or is headed by women, will be especially vulnerable to any disruptions to income earning activities caused by land acquisition and/or resettlement. Moreover, because these households are often dependent on fewer able-bodied workers, they will generally require additional labor to compensate for and assist them during and after land acquisition and/or resettlement.

90. Generally, women manage family and household chores, are active in feeding and maintaining livestock, and assisting with other farming as time permits. Land acquisition may place extra time burdens on them because men will be busy shifting production to new acreage. Resettlement will place extra time burdens on them because they will have to be heavily involved in shifting to a new house. It will be especially important for women to be involved in consultative meetings prior to resettlement because they will likely have a better understanding as to what resources are required to facilitate shifting to a new house. Women’s involvement in resettlement planning will thus provide an essential component in ensuring that the process is smoothly implemented.

3.6.3.4 Most Vulnerable Households

91. The most vulnerable households, as shown in the survey data for this Project, are those households which (a) almost entirely dependent upon agricultural income, (b) have school age or younger children, and/or (c) have only one adult able to earn an income.

92. Households headed by women and households with a disabled member are both often at substantial disadvantage because these households tend to have fewer able adults who can generate income from multiple sources in the manner of the typical Chinese household.

♦ Households with young children and no father, or with a severely disabled parent, have less ability to generate income than most families; ♦ Households having these characteristics will need the most help; and

- 24 -

♦ Households with no father or with a disabled parent, but who have children who can work at adult jobs and tasks, are much less economically disadvantaged and much less vulnerable. 93. Some households with a disabled adult fit this pattern, while others do not. Some households headed by women fit this pattern, while many others do not. The key factor seems to be the inability of the household to generate income from wages or small businesses. These households are not clustered together in particular villages, and are found in both less prosperous and more prosperous villages. Their needs will be addressed on a case-by-case basis. They will receive the extra support indicated above to insure that their situation after the Project is as good, or better, than it was before the Project.

94. With respect to possible sources of additional support for the most vulnerable households, in Shanxi, the Poverty Alleviation Offices, ACWF and the RCSOs are aware of the fact that these vulnerable households will require special attention, and have indicated that resources will be provided to assist them. The ACWF in Luliang City Prefecture (Jiaocheng, Wenshui, Fenyang, Lishi, and Liulin counties) has recently implemented a World Bank micro-credit program targeting poverty alleviation that has been assessed as highly successful. Thus, it can provide useful experience in developing and implementing income restoration strategies for women during the implementation of the Project.

95. Shaanxi has a very active village development program that provides funds for roads, water, electricity, and other services to villages plus the establishment of village enterprises, and its funding is going to roughly double during the next 5-year plan. This will be of considerable benefit to those villages that have significantly higher number of AP.

96. In considering any resettlement and income restoration strategies, the Ningxia Hui Autonomous Region’s recently implemented program, Five Year Plan for Farmers New Residences (Supplementary Annex 3), should be incorporated. This unique program is aimed at relocating villages. The villages are provided with a range of services including new houses with higher standards, land use planning that enables increased amounts of arable land, secure drinking water, telephones, electricity, television access (cable or satellite), roads, and as appropriate schools and clinics. The province and counties provide up to 50 percent of the funding, and the villages the remaining 50 percent. Provincial and county officials all indicated that any village that is affected by TZR land acquisition and decides to participate in this program will be able to leverage their compensation funds to this program (providing their 50 percent contribution). This could be an extremely valuable mechanism leveraging the compensation received for TZR with another funding source and facilitating resettlement and income restoration.

97. One of the very positive contributions that TZR can provide in terms of employment opportunities in addition to unskilled construction jobs, are low-skilled service jobs ranging from cleaning to cooking to selling food and newspapers at the stations. Even though these vulnerable households may be short of able-bodied labor, they may be able to take advantage of these opportunities. TZR and local officials will ensure that whenever possible, members of these vulnerable households are provided with employment.

98. Table 3-4 outlines the criteria to define eligibility for the most vulnerable households in the Project area. As the above discussion of the household surveys indicates, there are no broad generalizations that can fully group or identify the most vulnerable households. Instead, the situations are different from one household to the next. However, there are indicators that show potential vulnerability, and these will be used to provide the basis for assistance and mitigation programs, even if the result is a unique combination of resources (e.g., funds, finance, training, labor, rehabilitation and skills training) allocated to the individual household. This points to a resettlement program that incorporates flexibility and responsiveness into its structure, and requires local officials such as the ACWF and the Poverty Alleviation offices to work proactively with the AP. The actual number of vulnerable households will be determined by the resettlement census and reflected in the Final RP.

- 25 -

99. While the Project has been purposely designed to lessen impact on developed areas, there will be affected households that will have their livelihoods placed in jeopardy because of relocation. These are primarily poor rural households that will lose their source of income and subsistence. These households will have to receive special attention from resettlement officials as well as local Poverty Alleviation officials and the ACWF. Resources will be made available for skills training, livelihood training, and if the AP decides to establish a small business, access to capital and other support mechanisms. In addition, preferential hiring practices during Project construction will provide an alternative income source. Although the intent of these support programs is very positive, experience suggests that the poor do not always access available resources for a range of reasons. It is thus essential that Project and local officials in conjunction with representatives of affected villages give considerable focus on ensuring that those at risk are receiving the compensation that they are entitled to and that they are also utilizing available resources to increase their incomes and improve their livelihood.

Table 3-4: Vulnerability of Households

Serious Project Impacts on Households Loss of job in Vulnerability Loss of House Loss of Land >50% Loss of Shop relocated enterprise Rural Poverty or Replacement value High dependence Main source of Often contract low income of simple houses is on crop income income; shop may not labor or part- households less than cost of be registered, no time, which are dependent on new house compensation for not guaranteed farming business (note: all employment in Urban poverty or Higher cost for rent Employer may have household assets the new Low income or greater distance to relocate including home shops enterprise; or households from possible will be included in the may be too far employment. resettlement and away compensation census). Households lacking Unable to construct These people may Unable to construct labor new house; benefit from a new shop; contract 1) Single parent contract labor is pension scheme labor is more 2) Disabled more expensive; expensive; time 3) Elderly time required may required may disrupt disrupt work business Renters of houses, No compensation; No compensation; No compensation; farmland or shops need to find need to find need to find alternate alternate house to alternate land to space to rent rent rent Farmers cultivating No resettlement non-registered land subsidy; loss of income source House owners with No or reduced unregistered compensation buildings Source: Consultant

- 26 -

SECTION 4: OBJECTIVES, POLICY FRAMEWORK AND ENTITLEMENTS

4.1 PURPOSE AND OBJECTIVES OF LAND ACQUISITION AND RESETTLEMENT

100. Land acquisition and resettlement are necessary components of the construction of TZR. Upon the completion of the Project, it will facilitate the regional economic development along the transport corridor and provide more and better job opportunities to the local people. In addition, construction of TZR will provide greater mobility for the people, increasing their ability to participate in the economic growth and increasing prosperity of PRC’s major urban centers. It will also greatly facilitate east-west linkages and the development of the western region.

101. The compensation and resettlement protect the rights of people affected by the Project, guarantee their interests and make their standard of living and income not lower than prior to land acquisition and building demolition.

4.2 PROPERTY OWNERSHIP AND STRUCTURE OF PAYMENTS

102. Property to be taken for construction of TZR is of four general ownership types:

♦ Property belonging to or controlled by individuals, or by the family (household), ♦ Property controlled in common through the village or collective group, and ♦ Property controlled by the local government or state owned enterprises. 103. Compensation for loss of property depends upon the structure of ownership and control of property. There are 10 main categories in PRC, which are discussed below.

4.2.1 Compensation for Affected Village Collectives

104. The village has the right to use the land on which the farmers grow crops. The village and village group collectives distribute the land to the individual households for cultivation. The size allocated to each household is based on the number of people in the household and the farmers in the household who will work on the land. According to the PRC Land Administration Law of August 1998, when land is acquired for the purpose of State construction (such as TZR), the compensation should be made to the village collective for use in developing production facilities, or for expenditures which will contribute to the improvement of the villagers’ standard of living. State Council Document No. 28 (August 28, 2004) further clarifies that:

“The provincial governments shall formulate allocation methods for compensation within the rural collective organizations based on the rules that the compensation shall principally be distributed to the households whose land is acquired.”

105. The Ministry of Land Resources in Guidelines for Improvement of Land Requisition and Resettlement System (Document No. 238, 3 November 2004), indicates that while the principle is for the farmer to be the primary recipient of the compensation, the funds are to be rationally distributed within the rural collective economic unit and that the distribution method should be prepared in accordance with the State Law and in consultation with AP. The guidelines also state that if the compensation multiple of up to a maximum 30 times of the Average Annual Output Value (AAOV) is insufficient to ensure that the AP cannot at least maintain their standard of living prior to land acquisition, the provincial authority may increase the compensation multiplier as it deems appropriate.

4.2.2 Individual Farmer Households Affected by Land Acquisition

106. Compensation for standing crops (including orchards and other “attachments to the land” which belong to the household) goes to the affected households.

- 27 -

4.2.3 Rural Households Affected by Housing Demolition

107. Residences to be demolished belong to the individual households, and, therefore, compensation goes directly to the affected family. The families get new housing sites from the village without charge, where they can build their new homes. Provincial and county programs facilitating micro-urbanization will be utilized where appropriate. Compensation for moving expenses including income lost due to demolition and relocation is also provided to the affected households. Home shops will be included in the list of household assets calculated for compensation.

4.2.4 Urban Residents Affected by Housing Demolition

108. In the alignment of TZR there are reportedly no urban residents that will be affected by housing demolition. Although there will be no urban AP, for this type of housing to be demolished and which belongs to individual families, the family receives housing resettlement payments from the department in charge of urban housing demolition. The compensation amount is based on the cost to provide for an equal amount of housing of equal quality and similar location (i.e. replacement value of house including land price). Compensation for moving expenses including income lost due to demolition and relocation is also provided to the affected households. Home shops are included in the list of household assets calculated for compensation.

109. There are no informal dwellers affected by the Project. In the event that people without legal title are identified, they will be eligible for compensation based on the value of comparable building and improvements and relocation expenses.

4.2.5 Affected Commercial Buildings/Shops

110. Buildings used for commercial purposes belong to individuals or to the collectives. Household shops are included in the list of household assets that will be compiled during the resettlement census. Resettlement compensation to these people not only considers payment for the building itself, but also the loss expected to be incurred during the transition period and the time of construction of their replacement buildings. This includes lost wages. Compensation for moving expenses is also provided.

4.2.6 Affected Factories and Enterprises

111. Factories and enterprises are owned by the State, the collectives or individuals. Compensation is made to the legally established owners of the affected enterprises and they make their own decisions on reconstruction and relocation of their facilities. As with commercial buildings, resettlement not only considers compensation for the building itself, but also the losses sustained during the transition period and the time of construction of their replacement buildings. This includes lost wages. Compensation for moving expenses is also provided.

4.2.7 Affected Institutions and Units

112. Affected institutions and units (such as township offices, water supply stations, etc.) are buildings which belong to the relevant governmental departments. The appropriate government agency will rebuild them after receipt of appropriate compensation.

4.2.8 Affected Schools

113. Schools, such as primary schools and secondary schools, are public service enterprises. They are to be rebuilt by the local governments after receipt of compensation.

- 28 -

4.2.9 Affected Infrastructure

114. Power supply and telecommunication facilities belong to the State or local government agencies. Affected roads are either owned by the State, the province, prefecture, district, county, township or collectives. Most of these are restored by the Project contractor. Some are rebuilt by the owners after receipt of appropriate compensation.

4.2.10 Land Borrowed for Temporary Use

115. The standing crops and loss of land output during the time period of temporary land use are compensated. When the time of use is over, the project owner is required to restore the land to its original condition. Compensations in cash for above ground attachments to the land, such as trees, fruit trees, and standing crops, are all paid to the affected individuals or households.

4.3 APPLICABLE LAND POLICIES, LAWS, AND GUIDELINES

4.3.1 The Legislative and Regulatory Framework

116. For land acquisition, removal, resettlement and compensation, China has established a comprehensive legal framework and policy. Since the enactment of the first PRC Land Administration Law in 1986, it has been modified three times. On August 28, 2004, the Peoples Congress made the latest revision of the policy. With the guidance of national laws and the national policy framework, many levels of local government have published and implemented local regulations and policies accordingly regarding land acquisition, house removal, resettlement and compensation. NHAR and Shaanxi and Shanxi provinces have developed local laws and policies in conformity with the national legal framework to direct and guide local land acquisition and resettlement tasks. All prefectures, cities, counties, districts of the three provinces implement their provincial government regulations.

117. Land acquisition, housing demolition and resettlement under the proposed Project will be carried out in strict compliance with the following laws, policies and regulations：

♦ Land Administration Law of PRC, August 1998; revised by People’s Congress on August 28, 2004 with an order entitled: ”Decisions on Modification on PRC Land Administration Law”. ♦ Urban Land and Housing Property Administration Law of PRC, April 1994. ♦ The State Council’s Decision on Further Reform to Strictly Implement Land Administration, State Document No.28 (2004). ♦ Regulations on Implementation Methods for the Land Administration Law of PRC, December 1998. ♦ Administrative Regulations for Urban Housing Demolition & Relocation of PRC, June 1991. ♦ Basic Farmland Protection Regulations, December 1998. ♦ Directory of Instructions on Facilitating Compensation for Land Acquisition, The Ministry of Land Administration’s Document No.238 (2004). ♦ Shanxi Province Implementation Method for Land Administrative Law of PRC, September 26, 1999. ♦ Shaanxi Provincial Implementation Method for Land Administration Law of PRC, November 30, 1999. ♦ Shaanxi Provincial Administrative Regulations on House Removal and Compensation, Shaanxi Provincial Congress, December 2003.

- 29 -

♦ Ningxia Hui Autonomous Region Land Administration Regulations, November 17, 2001. ♦ ADB Policy on Involuntary Resettlement, 1995. ♦ ADB Policy on Indigenous People’s, 1998 4.3.2 Relevant Provisions of Laws and Regulations of PRC

118. The Land Administration Law of PRC used cultivated land as the bench mark value to establish the compensation amount. Article 47 of the Law specifies the compensation for land acquisition as follows:

♦ For land acquisition, compensate according to the original use of the land acquired. The compensation for cultivated land includes land compensation, subsidy for resettlement (relocation assistance such as moving expenses), compensation for above-ground attachments and standing crops. ♦ Compensation for the cultivated land acquired should be 6 to 10 times the AAOV during the last three years prior to acquisition. Subsidy for resettlement for cultivated land acquired is calculated according to the number of agricultural persons to be resettled. The number of agricultural persons to be resettled is calculated by the formula: the amount of acquired cultivated land divided by the amount of cultivated land per capita prior to the land acquisition. Subsidy for resettlement for each agricultural person should be 4 to 6 times the AAOV of the cultivated land acquired during the last three years prior to acquisition. However, the maximum subsidy for land to be acquired shall not exceed 15 times the average AAOV of the land acquired during the last three years prior to land acquisition. ♦ For other land acquired, governments at the affected provinces shall decide the compensation and resettlement subsidy standards by using the standards for cultivated land as a reference. ♦ Governments themselves at the affected provinces will decide on compensation standards for above-ground attachments and standing crops for land acquired. ♦ The units that acquire suburban vegetable plots have to pay fees for building new vegetable plots according to relevant State regulations. 119. If land compensation and resettlement subsidies paid in accordance with Article 47 are insufficient to maintain the original standard of living of the farmers to be resettled, the resettlement subsidy may be increased upon approval of provincial governments. However, the total amount of compensation plus resettlement subsidy shall not exceed 30 times the AAOV of the land acquired during the last three years prior to land acquisition. Under special circumstances, The State Council may increase the compensation for cultivated land acquisition and subsidy standard for resettlement according to the socioeconomic development of specific areas.

120. In order to further improve PRC’s land administration, the State Council (SC) enacted “Decision on Further Reform to Strictly Implement Land Administration” in 2004 (Document No. 28), which sets out new requirements on land acquisition and compensation. Article 12 of SC’s Decision 28 specifies:

“The compensation method on land acquisition shall be enhanced. All county- level governments and above shall take any necessary measures to ensure that the living standard of the people whose land to be acquired will not be reduced due to land acquisition. The governments shall ensure sufficient and timely payment for compensation for land acquisition, resettlement subsidy, above- ground improvements and standing crops for land acquired. When the compensation for land acquisition and subsidy for resettlement according to the laws and regulations cannot maintain the people’s living standard as well as prior

- 30 -

to land acquisition, and it is not sufficient to ensure the social condition and welfare for the people who lose land, the provincial governments shall increase the compensation standards. When the compensation and subsidy taken together and meeting the maximum level under the laws, still cannot ensure the people’s original living standard, the local governments shall make further payments to the people from the proceeds of the land acquisition collected by the local government. The provincial governments shall develop and publish the unified annual output standard by cities/counties or integrated land price by areas for land acquisition, and the compensation to land shall be based on the principle of ‘the same land, the same price’”. 121. The SC’s Decision 28 specifies the process of resettlement and land acquisition for farmers and addresses appropriate resettlement for farmers who lose land. In addition, it specifies that the land acquisition plan shall include consultation with the affected people to insure that the benefits are provided to these people. Article 13 specifies the following:

“Those farmers whose land will be acquired shall be appropriately resettled. The local county and above governments shall develop specific methods to ensure the farmers’ future living standards after their land is acquired…. In rural areas, when the farmer’s land is acquired, the local government shall reallocate necessary farmland for those people within its jurisdiction, or arrange suitable jobs for them. Those farmers who lose land and do not have basic production means to support their living shall be resettled to other places”. 122. In addition, SC Decision 28 requires that labor and social organizations, together with related organizations, shall provide job training as soon as possible for farmers whose land will be acquired. It also directs requirements for the social security system. Article 14 specifies the following:

“During land acquisition, the local government shall protect the farmers’ entitlement of collective land property and contractual land operation. Prior to approval of land acquisition, it shall notify the farmers of the purpose of land acquisition, location, compensation standard, and resettlement approaches. The survey of the land to be acquired shall be confirmed with the rural collective organizations and the households. When it is necessary, the national land administration organizations shall hold public consultation meetings pursuant to related laws and regulations. Materials relating to the farmers’ knowledge of land acquisition and confirmation of it shall be required for the documentation to be submitted for approval. The arbitration mechanism shall be established as soon as possible for disputes on compensation and resettlement, to ensure the entitlements of both farmers and land users. All issues approved regarding to land acquisition shall be published, unless there are special circumstances.” 123. With respect to distribution of compensation to the AP, the PRC Government has developed specific rules to ensure the farmers’ entitlements. Article 15 in the SC Decision 28 specifies that:

“The monitoring of the process of land acquisition shall be strengthened. If compensation for resettlement has not been implemented, the new user [project owner] shall not use the land. The provincial governments shall formulate allocation methods for compensation within the rural collective organizations based on the rule that the compensation shall principally be distributed to the households whose land is acquired. The rural collective organizations shall publicize to its members the revenue and expenses from resettlement as well as its distribution, in such a way so as to allow supervision by the public. The agricultural and civil administration organizations shall improve their supervision of the distribution and use of compensation funds within the collective organizations”.

- 31 -

124. Pursuant to SC Decision 28, the Ministry of Land Administration has developed Instructions for Facilitating Compensation for Land Acquisition to further elaborate on the Government’s implementation rules and procedures. The provinces along the alignment, NHAR, and Shaanxi, and Shanxi Provinces also developed land administration methods and detailed implementation rules for land acquisition, compensation and resettlement. The provincial implementation methods and compensation standards follow the same principles as those set by the State Government.

125. The scope of the SC’s Administrative Regulations for Urban Housing Demolition and Relocation5 includes the following:

♦ The remover shall compensate the removed; ♦ The remover shall sign an agreement with the removed specifying the terms of compensation and resettlement; ♦ Removal compensation is based on swapping of property with identical features and compensation by evaluation; ♦ The remover shall be responsible for resettlement of the users of the removed buildings, or provide sufficient funds so that the removed can satisfactorily relocate; ♦ The users of the removed buildings required to move due to the building demolition shall be given a moving subsidy by the remover; ♦ During the stipulated transition period, the users of the removed buildings shall be given temporary subsidy if they live by themselves. During the stipulated transition period, the users of the removed buildings shall not be given temporary subsidy if the remover provides the transition house. 126. In conformity with the above laws, regulations and policies, MOR and the three provinces which are partners in the envisaged joint venture for TZR will implement land acquisition, resettlement, and compensation through the local governments.

4.3.3 ADB Policy on Involuntary Resettlement

127. In accordance with ADB’s Policy on Involuntary Resettlement, people unavoidably displaced should be compensated and assisted, so that their economic and social future would be generally as favorable as it would have been in the absence of the Project. People affected should be fully informed and consulted, and existing social and cultural institutions should be supported.

128. ADB guidelines for involuntary resettlement include the following:

♦ Involuntary resettlement should be avoided where feasible. ♦ Where population displacement is unavoidable, it should be minimized by exploring all viable project options. ♦ People unavoidably displaced should be compensated and assisted, so that their economic and social future will be generally as favorable as it would have been in the absence of the project. ♦ People affected should be informed fully and consulted on resettlement and compensation options.

5 In urban areas there are special regulations regarding house removal developed by the Central Government and the local governments. As the highest policy making body, the State Council issued Administrative Regulations for Urban Housing Demolition and Relocation, which specifies the rules for housing demolition in urban areas. The three provinces have developed implementation regulations separately according to the State Council’s policy. All prefectures, counties, cities, and districts are following the provincial regulations on housing demolition and relocation at urban areas.

- 32 -

♦ Existing social and cultural institutions of resettlers and their hosts should be supported and used to the greatest extent possible, and resettlers should be integrated economically and socially into host communities. ♦ The absence of a formal legal title to land by some affected groups should not be a bar to compensation. ♦ Particular attention should be paid to households headed by women and other vulnerable groups, and appropriate assistance provided to help them improve their status. ♦ Involuntary resettlement should be conceived and executed as an integral part of the project. ♦ The full costs of resettlement and compensation should be included in the evaluation of project costs and benefits, project budget, and project financing. 4.3.4 ADB’s Policy on Indigenous Peoples

129. As stated in The Bank’s Policy on Indigenous Peoples:6 “A basic principle in the Bank’s operations is examination of all implications and effects of the development initiatives and interventions it supports. The Bank operationalizes this principle through the range of policies and practices—for example, policies and practices relating to environment, involuntary resettlement, participation, social assessment, and gender and development. Consistent with this approach, it is recommended that the Bank establish policy and practices specifically addressing indigenous peoples affected by its operations, to reflect the policy elements shown below.

130. For development interventions it supports or assists, the Bank will ensure that affected populations and persons are at least as well-off as they would have been in the absence of the intervention, or that adequate and appropriate compensation be provided. Policy should ensure equality of opportunity for indigenous peoples. Policy must ensure that Bank interventions affecting indigenous peoples are (i) consistent with the needs and aspirations of affected indigenous peoples, (ii) compatible in substance and structure with affected indigenous peoples’ culture and social and economic institutions, (iii) conceived, planned, and implemented with the informed participation of affected communities, (iv) equitable in terms of development efforts and impact, and (v) not imposing the negative effects of development on indigenous peoples without appropriate and acceptable compensation. A policy together with practices addressing indigenous peoples would be applied in parallel with and would not replace or supersede other Bank policies and practices. Each of the elements of policy and practice addressing indigenous peoples would be considered within the context of national development policies and approaches, and the fundamental relationship between the Bank and governments would be the basis for country-specific operations in a given country.

131. Policy on indigenous peoples will ensure that the process of initial social assessment mandated in Bank operations includes specific consideration of indigenous peoples as a potentially affected population. If the initial social assessment identifies indigenous peoples specifically as a significantly and adversely affected population, or vulnerable to being so affected, it will be ensured that an indigenous peoples plan as described in this working paper is prepared by a government or other project sponsors.

132. The Bank will work to develop necessary and appropriate internal capacities for addressing indigenous people’s matters in its operational activities.

133. As necessary and appropriate, specific institutional development and capacity building support will be provided to both indigenous peoples communities and to governments, consistent with the Bank’s policies and approaches addressing institutional development and capacity building.

6 ADB, April 1998, pp. 12-13.

- 33 -

134. In developing operational approaches to addressing indigenous people’s matters in Bank operations, policy considerations and operational approaches outlined in this paper will be adopted as the principal thrust of the Bank’s policy on indigenous peoples. Application of the policy would be within the context of country-level legal frameworks and other relevant circumstances.”

4.3.5 Differences between PRC and ADB Policy and Solutions

135. Replacement Value: local regulations have set minimum standards for land compensation which may be adequate in general cases but may not always reflect replacement value. Solution: For this Project higher standards have been adopted by the local governments which are in line with current replacement values. For vulnerable households, preference will be given to replace land for land rather than cash compensation, so they are not adversely affected. For this purpose, reserve (non-contracted) land is available in most villages which can meet the needs of vulnerable households. At the village level, the amount of compensation paid to village collectives and the investment of these funds will be closely monitored to ensure full replacement of losses.

136. Consultation and Disclosure: the PRC Land Law has provision for consultation but the regulations and procedures are not as specific as ADB requirements. Solution: MOR provided Resettlement information booklets (RIBs) to the local governments before March 10, 2006 to distribute to the affected villages, and to fully disclose the approved RP to all relevant local government offices. A second round of disclosure will be necessary to inform AP of specific compensation amounts and eligible training programs. Also, once the final alignment is approved, all AP will be officially notified accordingly.

137. Grievance Procedures: the PRC Land Law has provision for grievance process but experience has shown that documentation of grievances is incomplete. Solution: Local governments will ensure that AP have opportunity to express grievances at appropriate levels and will instruct local officials to find solutions and implement measures quickly. The process will be documented and reviewed by an external monitor.

138. Non-legal Properties: the absence of a formal legal title to land should not be a bar to compensation. Solution: If any AP is identified as lacking formal legal title, they will be eligible for compensation based on the value of comparable building and improvements and relocation expenses.

- 34 -

SECTION 5: RESETTLEMENT AND COMPENSATION MEASURES

5.1 PERMANENT LAND ACQUISITION

139. The Land Administration Law of the PRC stipulates that the compensation for cultivated land consists of four parts, compensation for land itself, resettlement subsidy for people’s loss of livelihood, compensation for above ground attachments, and compensation for standing crops. The land compensation is calculated by using the agricultural output values in the last three years prior to land acquisition with specified multiplication factors ranging from 6 to 10 times. For the resettlement subsidy, the multiplication factors are related to the amount of cultivated land per capita, and multipliers can range from 4 to 20 times. For those villages with relatively less cultivated land per capita, the compensation multiplication factors are higher since more rural people are fed on each mu of cultivated land.

140. AAOVs are calculated by use of market prices (i.e., the average market price for the current year) multiplied by all agricultural outputs of the last three years prior to land acquisition. When calculating output values, values of by-products such as straw from grain products are also included.

141. TZR passes through some areas along the Yellow River that are well-irrigated. It also passes through areas that rely on dry land farming, and some areas that have very sparse vegetation due to desert conditions. In addition, sections of the alignment pass through hilly terrain that requires terracing for dry land farming. The types of crops grown in these areas vary as much as the land forms and access to water. There are a range of grains (such as wheat and rice, corn, millet, sorghum), yams (sweet potatoes), potatoes, beans, vegetables, oil crops, cotton, and medicinal plants, and fruits. Grapes for table consumption and making wine are also grown. Orchard fruits include Chinese dates, wolfberries, pears and apples.

142. The following tables provide a representative set of compensation values in the three provinces. The values for NHAR are approved by the provincial government as compensation rates for LAR for TZR (see Supplementary Annex 9 for NHAR’s detailed list of approved values). For Shanxi and Shaanxi provinces the tables provide indicative figures based on recent resettlement experience. The compensation and subsidy rates for TZR will be determined by Shanxi and Shaanxi in similar detail as NHAR before land acquisition based on actual growing conditions, land productivity per crop, and market prices. The final rates for TZR may differ from the values included in the tables. The counties along the alignment as well as the prefectures and provinces have all had recent experience in calculating compensation rates as a result of expressway and other road projects in their respective areas.

143. Table 5-1 shows AAOVs for typical crops based on TSDI estimates from field investigations and Consultant’s discussions with local governments. The values represent averages for the last three years. Generally, the AAOV of the 22 counties/districts along TZR is: CNY 864/mu for dry land, CNY 1416/mu for irrigated land, and CNY 2700/mu for orchards. Table 5-2 shows the compensation multiples by province used in estimating the LAR budget detailed in Section 9. NHAR uses lower multiples because they provide additional compensation for new farmland development. NHAR has a higher standard for forest land due to need for reforestation. The multiples for orchard are lower because they exclude the value of trees, which are compensated separately.

- 35 -

Table 5-1: Average Annual Output Value of Crops (CNY) Type of Crops Annual Output Market Average Annual Output Value/mu Land Planted (kg/mu) price/kg Output Value Wheat 150 1.6 240 General 864 Dry Land Corn 400 1.2 480 By-products 20% of annual output values of main products Wheat 250 1.6 500 Irrigated Rice 400 1.7 680 1,416 Land By-products 20% of annual output values of main products Apple 1,250 2.0 2,500 General Pears 1,250 1.6 2,000 2,700 Orchard By-products 20% of annual output values of main products Source: TSDI for General Dry Land and Irrigated Land. Consultant’s estimates for General Orchard are based on information provided by Local Governments. Note: The values represent averages for the last three years and should be interpreted as indicative figures.

Table 5-2: Compensation Multiples for Land Compensation Type of Land Shanxi Shaanxi Ningxia Dry Land 20 15 10 Paddy Land 22 14 10 Orchard 13 9 9 Forest Land 10 10 17 Source: Local Governments. Note, NHAR uses lower multiples because they provide additional compensation for new farmland development. NHAR has a higher standard for forests due to need for reforestation. The multiples for orchard are lower because they exclude the value of trees, which are compensated separately.

144. Compensation rates for land are shown in Table 5-3. TSDI presented an estimated average rate per mu in its resettlement report. The data for the provinces were obtained during Consultant’s field visits in November 2005. Despite the wide range between provinces, it should be noted that the values represent recent actual experience in each province with road and other infrastructure projects. The rates applicable to the TZR Project are not yet established. Rates for dry land in Shanxi represent rates paid for land for expressway development in 2004 plus a 20 percent increase recommended by local officials. The rate for irrigated land reflects the price suggested by the provincial DRC as the price paid for land acquisition for a new rail line (versus CNY 13,000 /mu for expansion of an existing rail line because the land to be acquired would be next to the existing line and in their view not as valuable as land that had not already been impacted by infrastructure development). Rates for dry and irrigated land reflect recent rates for expressway development, and were suggested by local officials during field visits in November 2005.

Table 5-3: Compensation Rates for Land (CNY/mu) Type of Land Shanxi Shaanxi Ningxia Dry Land 16,800 13,000 2,500 Paddy Land 31,000 20,000 12,500 Orchard 34,000 24,500 15,000 Forest Land 7,000 7,000 12,000 Waste Land 800 800 300 Source: TSDI and responses from local governments during Consultant’s field visits in November 2005. Note: the values represent recent actual experience in each province with road and other infrastructure projects. The final rates applicable to the TZR Project are not yet established for Shanxi and Shaanxi. Ningxia rates are approved by NHAR; the rate for dry land is low because this includes seasonal farmland and pasture.

145. Table 5-4 shows the TSDI estimated compensation rates for standing or young crops. Compensation is equal to the output value for one crop season. If the crops have been harvested and not re-planted prior to land acquisition, compensation for standing crops is not paid.

- 36 -

Table 5-4: Estimated Compensation for Young Crops – CNY/mu Type of Land Shanxi Shaanxi Ningxia Cultivated Dry Land 450 450 373 Irrigated Land 800 800 750 Orchards 1,400 1,400 1,380 Vegetable Plots 2,500 2,500 2,390 Forest Land 700 700 690 Source: TSDI (note, these rates are based on roughly one-half the AAOV, since most areas produce two crops per year).

146. In addition to the above, each county/district has its own detailed compensation standard for attachments (e.g., wells, fencing, walls, pig sties, manure pits, green houses, etc.), fruit trees, tree farms, public facilities, and woodland.

5.2 TEMPORARY LAND OCCUPATION

147. During railway construction, contractors will temporarily occupy land for access roads, construction camps, material storage, storage of tunneling waste, and engineering activities. Land is generally borrowed for temporary use for periods of 2 to 3 years. Compensation for temporary land will be provided to the landowner or user. If temporarily borrowed land is cultivated land, compensation will be provided year-by-year according to the loss of AAOV. If the borrowed land is wasteland, a lump-sum payment will be made to the village collective. When construction activity is completed, the land will be returned to the owner in its original condition.

5.3 BUILDING DEMOLITION AND REALLOCATION

5.3.1 Compensation Rates for Building Demolition

148. According to the Land Administration Law and housing demolition policies, the compensation for structures and attachments to the land will be paid directly to the AP who own these assets. Compensation will be fixed at the replacement rate for the demolished houses. In rural areas, local governments will allocate housing plots that are prepared (leveled and ready for connection to services if applicable) for house construction at no additional cost to affected people and the new house will be constructed either by the AP themselves or by the village committee. In urban areas, if any AP are identified, the principles of property right swap or compensation at replacement value or a combination of both will be implemented. The area for swap of property rights of houses will be based on the gross area of the house demolished. The amount of compensation will be based on replacement value of the houses to be demolished. Any legal transaction and registration fees will not be charged for rural or urban house relocation.

149. People to be resettled are entitled to use the building materials from the old house for free. Table 5-5 shows compensation rates for building demolition. The values for NHAR are approved by the provincial government as compensation rates for LAR for TZR (see Supplementary Annex 9 for NHAR’s detailed list of approved values). For Shanxi and Shaanxi provinces the tables provide indicative figures based on recent resettlement experience. The compensation and subsidy rates for TZR will be determined by Shanxi and Shaanxi in similar detail as NHAR before commencement of LAR.

- 37 -

Table 5-5: Compensation Rates for Rural Housing Demolition (CNY/m2) Type of Structure Shanxi Shaanxi Ningxia Storied Building 550 500 450 Wood/Brick 500 450 280 Cave 340 300 -- School 500 500 450 Workshop 500 500 450 Source: TSDI, responses from local governments during Consultant’s field visits in November 2005. The final rates applicable to the TZR Project are not yet established for Shanxi and Shaanxi. Ningxia rates are approved by NHAR.

150. For house compensation, there will be no depreciation of value based on age of the dwelling. Where necessary, a house appraiser will assess the replacement or market value of the house and whichever price is higher will be utilized. Compensation standards for reallocation of housing of urban people are higher than for rural houses because both the price and quality of urban housing tend to be higher than those of rural housing. In rural areas, the house sites for farmers to build new houses are allocated to them free by the government, and only the cost of building is compensated.

5.3.2 Principles of Reallocation for New Housing

151. The basis for all planned relocation of buildings, including housing, in the TZR Project is “nearby rebuild.” In nearly all cases, new house sites will be provided in the AP’s current village or urban neighborhood. No displacement of AP will occur unless alternative housing is available. According to TSDI, It is also important to emphasize that there will be no persons affected by resettlement in urban areas because existing MOR stations and yards will be utilized in Yuci, Suide, Zhongwei and Yinchuan, where additional land will come from MOR holdings, or where new stations are built, they will generally be just outside the built up areas on vacant or cultivated land.

152. Throughout housing reconstruction and removal, village councils, township governments (and their urban equivalents) and RCSOs will take care of households affected. If there are any difficulties, governments at all levels will work together to help in resolving difficulties.

153. Households headed by women will receive equal treatment, opportunities, and entitlements in housing reconstruction as those headed by men. It is illegal to have any discrimination against households headed by women, to reduce their housing floor space, or to deprive them of their entitlements. Resources (funds and labor) and other special measures as necessary will be made available to ensure that women-headed households are satisfactorily and appropriately re-housed.

154. Village councils, township governments, and RCSOs will pay particular attention and provide special assistance to households in poverty, the disabled, and the “five guarantees” families when they are relocated. If they are unable to restore their housing themselves, governments at all levels will get them removed and resettled. Two measures will be applied: To help them build new residences, or to purchase housing of the same floor space and quality in the same village.

155. Land used for rebuilding new houses will be distributed to the affected households, free of charge. The floor space for the new house will be at least equal to the original one. The location for the site of the new house will be determined through negotiations between the village collective and the affected household. Typically, rural families prefer building the new houses in places where convenient transport is nearby, or along the sides of the highway or along the village road. The village committee shall do its best to satisfy their wishes, and rural families shall choose their locations for the new houses themselves in the areas made available by the village committee for building new houses.

156. In principle, the building of new houses should come first, followed by dismantling the old ones. However, some AP use construction materials from their existing home to reduce the cost of the new house. Therefore, temporary living arrangements with friends and relatives living nearby are common, allowing the AP temporary shelter for up to one year when the new home is being built with materials dismantled from the old house. If the AP uses construction materials from the

- 38 -

house to be demolished a longer term compensation for temporary living arrangements will be provided. In addition to compensation for temporary living arrangements, moving and all other expenses are directly paid to the AP according to the resettlement agreements.

157. During the relocation process, the affected household will be under the care of the village committee, the town government and the RCSO of the county. Active assistance will be offered by the governments at all levels in the event that difficulties are encountered.

158. As a component of the Final RP census that is expected by June 2006, AP housing preferences including relocation to a town will be included. Special arrangements for those choosing to relocate to a town will be provided under the provincial and county initiatives discussed in Section 3.

5.3.3 Methods of Resettlement

159. The affected households will be compensated for the loss of their house. House plots are calculated separately and are paid to the village collective which then determines in consultation with AP the method for disbursement. Some of this compensation may include the AP as stated at the beginning of Section 5.

160. Reconstruction of a rural residence takes 3 to 5 months. Affected households will typically build their houses themselves with specialized work contracted to local tradespersons. They usually salvage construction materials from their old house with no deduction in compensation.

161. All households will receive allowances for moving, lost time and related losses or costs. If affected households increase floor space or improve the quality of their new residences, they will pay for the incremental costs themselves. Such an increase or improvement is at their own option, based on their own financial resources.

162. The farmer households are generally resettled in a scattered way. They will usually build their own new houses by themselves. As the compensation paid for houses includes both the cost of labor and materials, households choosing to build their own houses are free to (i) better their house by increasing its size and amenities; or (ii) build a similar house and use the additional compensation for other purposes. The locations of the new houses are chosen through consultation between the villagers and the village or group. The village assigns the new house sites to the AP and does not charge them for the land.

163. When a Chinese farmer needs to build a new house on the land owned by his village, he has to file an application. And this application has to be approved by the villagers through the villagers’ meeting and will be reviewed and examined by the village committee and the township government before being submitted to the county government for final approval. This type of land allocation for building new houses is free of charge. The applicant only needs to pay a small amount as documentation and recording fee, which is either compensated separately to the AP or waived.

164. The Shanxi provincial government stipulates that in rural areas, each household can have only one residential plot and the area for building houses cannot exceed 200m2 for each household. In the suburbs of cities and in irrigated and plain areas where the arable land is under one mu per capita, the area for building houses cannot exceed 133m2. In mountainous areas with less population and more land, the land area for building houses can be larger as agreed by the village.

165. One rural household may only have one housing plot according to the regulations of the Shaanxi Province. The housing plot of each suburban household cannot exceed 133m2, in a plain area it cannot exceed 200m2, and in a mountainous area or foothill it cannot exceed 267m2.

166. The NHAR government stipulates that for all residents regardless of ethnicity, in the rural areas, each household can have only one residential plot, and in irrigated areas it cannot exceed

- 39 -

270m2. In dry farming areas, the plots cannot exceed 400m2. In mountainous areas, the plots cannot exceed 540m2.

167. Resettlement of rural people requiring relocation outside the village is concentrated around small township centers. This is likely to happen since, as noted in Section 3, the three provinces pursue village relocation and micro-urbanization schemes in conformance with overall PRC policy. Integrated with township planning and development, streets and storefronts are built. There are several options. The first is that the local government is responsible for constructing streets and infrastructure, while the AP build the new housing in accordance with a unified plan. The second is that the AP get the housing of the same amount and quality built for them. The third is that the AP receive cash compensation instead of housing, if they so wish. The option is chosen by the affected individuals.

168. The new houses will generally be built by the households themselves after compensation is received. By doing so, participation of AP is promoted, and households can control costs and maximize benefits by receiving help from relatives and friends, reusing materials from the demolished house, and using local original house materials. They can also choose the design of their new house.

5.3.4 Compensation and Transition Methods

169. Although it is preferred that housing is not demolished before a new structure is ready for occupancy, many AP of other projects have typically chosen to build their own new house. Since the materials from the demolished house will be used in the construction of some new houses, the new house is often not built until the old house is demolished. This means that temporary accommodation during the transition period of up to one year will be required, and AP will receive compensation for this temporary displacement period. AP which move to their new homes in less time than the transition period will be able to keep the payment as an additional bonus for their own use.

170. 100 percent of the compensation will be paid to the households to be resettled before the dismantling of their original houses. All the attachments to the house, such as enclosures, toilets, pigsties, courtyard wall, water wells, electric wire, fruit trees, other trees and plants belonging to the household will also be compensated.

171. While the compensation is generally disbursed based upon payment of a standard amount per square meter of a particular type of construction, some households to be resettled will receive supplementary compensation in those cases where the standard compensation is not adequate to cover full replacement cost. For example, in some areas construction materials and/or labor may cost more than assumed in the compensation standard. In this case, supplementary compensation would be provided.

172. Special attention will be given to the poverty households and vulnerable families such as households with a disabled member, households headed by women, and households of old people. Should they meet with difficulties in the process of transfer, relocation, and rebuilding, both the village committee and the township government will provide help. The help may be in the form of giving guidance, supplying materials, labor and/or in cash. These measures are geared to insure a smooth resettlement of the households and guarantee that the housing condition of the resettled households is equal or better than prior to resettlement.

5.3.5 Affected Schools

173. Relocation of the affected schools will be handled by compensating the unit owner, the township or village council that will be responsible for rebuilding them. If the schools will be expanded, the township or the village council will contribute the incremental cost from the governmental education fund. PRC pays much attention to education and under general conditions,

- 40 -

for most of the affected schools, their conditions after the removal and resettlement will be improved. Currently, it is estimated that only two schools may lose some or all of their facilities.

5.3.6 Affected Enterprises

174. The demolition of 15 workshops, factories and enterprises affected by the Project is estimated to be 20,638m2 (as identified in the survey in Annex C, with total demolition estimated at 76,192 m2). Local governments were asked to survey affected enterprises. As noted earlier, the alignment was selected to minimize impact on developed areas, so there will be comparatively few affected factories. Local officials will contact affected factories and enterprises to develop their resettlement plans as staking progresses.

175. Compensation of affected industry and commercial enterprises is based on the allocation of the price of the land, buildings, equipment and other attachments. Compensation includes removal cost, income losses for the period when production is halted or reduced, and the market value of the demolition. It is paid to enterprises by the local government through the local resettlement office. Enterprises decide whether to rebuild or relocate affected facilities. The affected employees will be compensated for loss of wages during the stoppage/transition, and they will have priority for re- employment after relocation. If employees are out of work as a result of a decision not to rebuild, local government must provide proper support to ensure that workers obtain training, get new jobs or get pensions to maintain their living standards.

176. Any private shop and business affected by the Project will be compensated on the basis of the same principles as enterprises. Owners will receive help from the local government as early as possible to relocate to a proper place, minimizing or avoiding losses. Losses will be fully compensated before demolition. Home shops will be included in the list of household assets calculated during the resettlement census.

177. Townships and villages will help the affected enterprises to choose relocation sites and to rebuild and re-establish their businesses. The relocation sites for the enterprises owned by townships or villages should still be within the boundaries of their original townships or villages, while private enterprises can obtain or rent a new piece of collective land either in their original village or somewhere else to re-establish their businesses after getting their compensation.

5.3.7 Affected Infrastructure

178. The TZR Project will affect infrastructure including telecommunications lines, electrical transmission lines, roads, irrigation facilities, drainage systems, water and sewer lines, etc. When infrastructure is affected, the Project will either avoid, or minimize, or replace the facilities or pay appropriate compensation to the owners, agencies, or providers of infrastructure services. For cash compensation, standards will be determined based on the principle of restoring the original function, original scale and original standard. In any case, the affected facilities and services will be restored as quickly as possible, or temporary facilities will be provided before demolition or relocation of the existing facility to ensure that there is no significant impact on the quality of services for the local people.

179. The three major types of measures for the recovery of the infrastructure affected by the Project are as follows:

♦ Some will be recovered directly by the railway construction units in the process of construction, such as irrigation channels and township and village roads; ♦ Some infrastructure, such as telecommunication, broadcasting, and power lines, will be relocated by the specialized organizations; ♦ Some basic public facilities, such as water towers and power transmission lines, will be rebuilt by the affected parties.

- 41 -

5.4 PAYMENT OF COMPENSATION

180. The compensation for buildings, privately owned trees and land attachments affected is paid directly to owners. The compensation of land and resettlement subsidy is paid to every affected village collective or family through RCSOs. According to the Land Administration Law and SC Decision 28 (2004), land compensation is paid to the collective, and the collective has the responsibility to see that the compensation is distributed to the affected households. Schools, enterprises, government organizations, and other business organizations will receive compensation payments directly from the Project.

181. Where appropriate, funds will be paid directly to the affected organizations and households through local officials, and the RCSOs will only have an oversight role.

5.5 ELIGIBILITY POLICY AND ENTITLEMENTS MATRIX

182. Table 5-6 presents the eligibility policy and entitlement matrix for all categories of loss, including principles of compensation.

- 42 -

Table 5-6: Entitlement Matrix for Land Compensation Type of loss Application Entitled Compensation policy Compensation Entitlement Implementation issues person/ group

Permanent Arable land a) Land- • Land compensation and Full compensation for land-owning groups and land loss Village meetings to be held to decide the allocation of funds, whether loss of land. located in the owning resettlement subsidies. households, the share between land owning group and households there is land redistribution, and how to utilize collective funds for right-of-way of villages • Replacement land and/or cash will be determined by villagers’ meeting. In Shanxi, at least 80% will investment in income generating activities such as improved cultivation railway and (550) and payments and/or income be paid to AP. Compensation standards are in Table 5-3. techniques/ irrigation/ small business development/ training. associated groups. restoration measures sufficient to facilities ensure. Maintenance of existing If no replacement land is allocated to the AP, at a minimum, all of Higher level authorities to approve and monitor village level proposals and (3502 ha). b) Farmers economic and social conditions. the resettlement subsidy will be paid to the AP in cash. to facilitate training programs. who use the land (11,803 people/ 3,252 HHs).

a) Land- • In addition to the above Based on the lost cultivated land and vegetable land, NHAR has Local government and affected villages will prepare detailed plans for new owning entitlements, NHAR has agreed to agreed to pay an additional CNY 32.19 million for new farmland farmland development. villages in provide additional compensation to development. Ningxia. affected villages for creating new farmland

Forest land Local forest Cash compensation to forest bureau Refer to Table 5-3 for standards. Compensation will be paid by the provincial forest bureaus, which are within ROW bureau / according to standards and regulation responsible for reforestation.. (149 ha). Forestry of provincial by-laws Farm.

Non-cultivated Land- Cash compensation. All affected villagers’ groups Compensation based on provincial by-laws land within owning ROW (1005 groups. ha).

Temporary Arable land Farmers Who lose crops will receive full Cash compensation based on AAOV for each year land is not Village Committee/farm owners must be notified in advance and paid loss of land. adjacent to who use the compensation according to available, plus reinstatement to pre-construction condition (see accordingly. The land administration offices must approve sites, duration, ROW for land. compensation standard. Table 5-4). compensation payments and restoration after use. construction purposes (626 ha).

Wasteland Villages Lump sum cash compensation based Compensation paid to village collective. adjacent to who own on wasteland, plus reinstatement to ROW and the land pre-construction condition. other borrow and disposal sites (1246 ha.)

Crops losses Permanent All owners • Crops losses will be compensated Full payment direct pay to the crop and tree owners and Tree land loss and who lose at a rate equal to the market value losses. temporary standing of the harvested crops. use. crops and • Trees will be compensated based trees on project standards.

- 43 -

Loss of Rural house Households • Cash compensation at replacement Direct compensation to affected households or owners. Sub-villages and the AP to decide on location of new residential plots. residential demolition. (3,417) and rates for all types of houses. Compensation standards are in Table 5-5. The village will assign a Contractors will provide fill and level the sites for house construction and housing and collectives • Allocation of house plot or cash new house plot to affected households. The Project will pay moving make connections to existing public utilities. attachments. a) Collective who lose compensation for house plot and transition allowances of CNY 200/sq.m. Households moving to nearby towns would receive urban registrations losses houses and purchase and privileges for housing, schooling and other social services. villages, other plots. • Transition allowances – allowance units (5,000 Of which for transportation and temporary 2 m ) 586 are housing. b) Private poverty • Poverty households will receive at losses households. least the minimum standard Owner of the housing and assistance with building or construction and moving houses (347,203 m2).

Urban house Households Cash compensation or exchange Cash compensation paid to owner or provision of exchange Housing will be provided or reconstructed in accordance with urban demolition, if and housing, based on urban housing housing, plus moving and transition allowances. planning regulations. any. collectives. market appraisal.

Loss of Establishment School • Cash compensation for land or Full compensation based on compensation standards. Assistance in finding new site if relocation of establishment is institutional sited in or (one) and replacement site provided. unavoidable. buildings. affected by any other • Cash compensation for buildings. New school must be ready prior to relocation, if any affected. ROW. public • Construction of new school by EA buildings. or by local government in consultation with beneficiary groups.

Business State or Affected Compensation for lost assets will be Compensation for structures is based on Table 5-5, but subject to The business losses allowance will be based on the total post-tax profit losses. Collective enterprises negotiated and paid to the owner, appraisal and negotiation. during the six months prior to relocation as declared in the tax receipts. enterprises. (15), and along with business losses, moving Business/salary losses will be paid on a monthly basis for up to 6 workers- and transition allowances. Local months after relocation. Local government will assist enterprises with the relocation and will (permanent government will assist to find a new Salaries for workers will be paid for up to 6 months, or in ensure workers are re-employed. Any laid off workers will be given priority and contract site, if required. accordance with contracts. for training, job assignments and/or income subsidies. staff). Compensation for lost wages will be provided directly to workers.

Small private Owners and • Cash compensation for relocation Compensation for structures is based on Table 5-5. Informal shops will be treated the same as registered shops. They will be shops. workers – of shops (materials, moving, assisted by local government to set up in a better location. Legal and damage to goods). Compensation for loss of profit and wages paid for up to 3 months. informal. • Assistance to identify new site and get a business license.

Vulnerable Households/ Those who • Special assistance will be provided • Construction contracts specify hiring preferences. Relevant government sectors provide guidance and supervision on buying groups. persons live below by local government (e.g., hiring • TZR to set aside low and unskilled operations jobs. insurance where it is feasible. directly the poverty preference for TZR construction • Training programs. Each community establishes a “vulnerable group assistance team” affected by the line, and operations jobs, skills and • Access to grants and loans to start businesses. headed by township and village leaders. The team will collect and feed Project (Hui: landless, livelihood management training, back the needs of vulnerable groups and provide assistance in a timely • House site selection preferences. 2010 aged, grants/loans) for income manner. people/586 women, restoration, either to remain in • Assistance with relocation, construction. Support and monitoring by Poverty Alleviation Offices, ACWF, RCSOs. HHs; other children, farming or to start a sideline • Preference to obtain new farmland. vulnerable minority, business • Utilize benefits from provincial and county village development groups: 3035 long time • Provision of “free” labor to assist programs, including improved house standards.

- 44 -

people/858 sickness with relocation, house construction, HHs). with heavy and land reclamation. burden for Refer to Section 6.6. children’s education fees, etc.

Households Seriously Seriously • Special assistance will be provided • If the AP prefers, an equal amount and quality of replacement • These household will be identified during DMS and closely monitored with income affected affected by local government (e.g., hiring land will be provided, either from reserve land or voluntary land until sustainable restoration is achieved restoration households/ households preference for TZR construction adjustment; • Funds and other special measures will be allocated from the hardships. persons or and operations jobs, skills and • if the AP prefers to start a sideline business, local officials will contingency funds (see Table 9-2). directly households livelihood management training, provide advice and support to identify feasible activities and affected by the with grants/loans) for income invest the compensation wisely; Project inadequate restoration, either to remain in • in special circumstances, the local government or village capacity for farming or to start a sideline collective will assist to arrange micro-credit through the Poverty self- business. Reduction Office and/or the ACWF; rehabilitatio • Two household members will receive skills training (farm or n to be non-farm), of which at least one person must be female. determined during DMS.

Source: Consultant.

- 45 -

SECTION 6: ECONOMIC RESTORATION STRATEGY

6.1 CURRENT INCOME LEVEL AND VULNERABLE HOUSEHOLDS

183. In China, average net income per capita of rural residents in 2003 was CNY 2622. It was only CNY 1676 in Shaanxi Province, CNY 2299 in Shanxi Province, and CNY 2043 in Ningxia, which is respectively 63.9%, 87.7%, and 77.9% of the average of the country. In 2005, however, the average net incomes per capita of households along the alignment was CNY 3,291, or above the national average. However, there is great variation among the counties, with those at the eastern and western ends of the alignment having far higher rates, and those in between closer to the averages for their respective provinces.

184. As described in Section 3, agricultural production remains the main income source for people along the TZR alignment, centered on grain, cash crops and some raising livestock and forestry. Those households able to own and operate a business generally have higher income levels. Local wages also is an important income source for those fortunate to be living in or near areas where there are wage-earning opportunities.

185. The data indicates that households with income from multiple sources are better off than households whose income is solely from agriculture. The data does show a very strong relationship between how much small business income a rural household has and its total income, meaning that a high small business income is a virtual requirement for high total income. It also shows a strong relationship between how much local wages a rural household has and its total income, meaning that a high income from wages is likely to cause households to have high total incomes.

186. Income that is sent to households along the alignment was very limited except for one group: poverty households in Shaanxi, where 11.9 percent received money from outside (from migrant work or family remittances). However, this has to be read with considerable caution because it may represent a one-year only event or could reflect household members working in other areas that regularly send money home. There is insufficient data to assess this source of income.

187. As discussed in Section 3.6 Project Impact, there are households that will be especially vulnerable during relocation and resettlement. These vulnerable groups include rural households largely dependent on agricultural production for income. This means that their income is at risk to droughts, floods, freezes, and storms in addition to market price fluctuations. Poor households are also vulnerable during resettlement because they could lose their source of income and generally have few funds in reserve to cushion any added or unexpected expenses. Poor households that are headed by women, or have a disabled member, or are primarily elderly are generally the most vulnerable because they typically have fewer able-bodied adults capable of generating income. These households will need to receive the most attention during resettlement. Special measures for this group are discussed in more detail in Section 6.2.

188. As an order of magnitude indicator and utilizing an annual net income per capita of CNY 965, the poverty incidence along the alignment was 16.8 percent in Shanxi, 33.2 percent in Shaanxi, and 4.6 percent in Ningxia in the Consultant’s household survey. Vulnerable households that will require special assistance are identified below. Additional resources will be provided to the vulnerable households as outlined below.

189. Minority Hui households are located in Ningxia. About 13.5 percent of these households have net incomes per capita below CNY 965 as opposed to 19.8 percent of households in NHAR being poor. The non-poor Hui households in the survey sample have net income levels similar to their Han neighbors, and have successfully diversified their income sources. There is no evidence of discrimination against the Hui in Ningxia. In addition to the restoration measures described below for all households including employment preferences and training, it should be noted that Hui receive preferential access to university slots and reduced or waived fees. There are other special national and provincial support mechanisms to ensure Hui participation and access to training,

- 46 -

poverty alleviation, and “pension” support for poor people that are provided to all citizens. This includes Ningxia’s support for poverty households that totals CNY 200 per capita per month in urban areas and CNY 50 per capita every 3 months in rural areas.

190. Households headed by women constitute only 0.7 percent of the households in the Consultant survey and 3 percent in the TSDI survey. As noted in Section 3, in rural areas along the alignment it is rare for a woman to live alone or head a household because they are typically living with other family members. However, of the few women-headed households, 4 in Shanxi were also households with net incomes per capita below CNY 965. None of these included a disabled or infirmed member.

191. Households with a disabled member are 4.7 percent of the Consultant sample. Of these, 32.8 percent have net incomes per capita below CNY 965. An important factor is household size, with the average household consisting of 3.0 persons. This means that if one is already disabled or infirmed, then any illness or accident would severely impact the household’s income. Significantly, the households with a disabled or infirmed member reflect the overall sample: those with relatively high incomes have multiple sources of income, while those in the poverty group are largely dependent on agriculture. While there were a number of households with a disabled or infirmed member that had relatively high incomes, especially in Ningxia, those in the poverty group are highly vulnerable during relocation and resulting potential fluctuations in their incomes because they have fewer adults to generate income in addition to the possible costs associated with supporting a disabled person.

6.2 SUPPLEMENTARY INCOME RESTORATION STRATEGY

192. During land acquisition, removal and resettlement, the lives and production activities of the AP will be temporarily impacted and interrupted. The impacts could be quite severe on especially vulnerable households. Compensation will be provided to the AP before the land acquisition and demolition of their old houses. The compensation items shall cover all of the following: land, young crops, trees, fruit trees, auxiliary facilities, houses, and fees for the removal and transitional period.

193. The compensatory payment for the land acquisition will be given to the village collective which has the responsibility (per SC Decision 28) to see that the compensation is largely distributed to the affected households.

194. In addition to the above cash compensation, special aid and attention will be also given to the people affected such as defining and providing new land areas free of charge for the impacted settlers to build new houses; giving guidance in the purchase of construction materials; and preparation of the new house’s bases.

195. Special concern will be given to poor and disabled people and households headed by women, according to their condition, offering them labor or necessary allowances. The AP will be consulted regarding their choice of new house sites, with priority for selection given to potentially vulnerable households, including poverty households, households with elderly members, households with disabled members and households that are headed by women.

196. For households requiring assistance, the village will provide the necessary labor and materials to ensure that the new house is at least comparable to the existing one. For poor households that are headed by women or a disabled person, the village will provide labor at no cost to the household, so that costs for labor calculated in the compensation agreement may be applied to upgrading the house or for other purposes as determined by the AP.

197. In China, women’s rights and interests are protected through the “Protection Law for Women and Children of the People’s Republic of China.” Rural and urban women have the same rights as men – they should not be subject to discrimination and their rights and interests should not be slighted. The All China Women’s Federation (ACWF) has branches in all townships and most administrative villages and is involved in a number of programs designed to help poor girls attend

- 47 -

school, provide assistance, training and micro-credit to women and woman-headed households in poverty, to help train women leaders and to improve women’s health. As noted in Section 3, the ACWF has considerable experience assisting women with income generating activities in the PIA, and it has indicated that it will work with appropriate agencies and women to develop and implement measures that will facilitate income restoration for women and their households.

198. During the construction of the TZR, the railway construction units will employ many unskilled workers. Most of these employees with salary amounting to CNY 20-30 per day shall come from the local villages. AP will receive preferential priority in hiring for construction jobs. It will be a significant opportunity for the affected persons to restore their short-term income. A total of 435,000 person years for unskilled workers will be required during the construction phase of TZR. This is direct employment associated with the Project. In addition, there will be approximately 80,000 unskilled person years in industries that provide construction materials and services for TZR construction. In the 79 surveyed villages, there is a total workforce of 55,193 adults, of which 14,264 are unskilled, that will be able to directly benefit from TZR construction period employment.

199. Vulnerable people from the impacted households will have priority for employment during TZR’s construction. MOR will require that the construction units employ 50 percent of their unskilled workers from local poor people and others, including women, who lose their main source of income due to TZR land acquisition and resettlement. The railway support offices from the counties and townships will work together with the construction and engineering contractors and/or their subordinate construction teams to implement these preference policies.

200. During the construction, as the construction units come into villages and the population of temporary workers increases, job opportunities will be created. Affected persons can increase their income through setting up eateries, hostels and shops to service the construction workers, and by growing more high quality fruit and vegetables for sale to these workers and those who feed them.

201. Railway construction needs considerable local construction materials, such as sand and stone. If geological conditions are favorable, the AP may set up sand yards and stone quarries to provide construction units with those materials. An estimated 50 percent of the ballast, nearly all the sand and gravel, and all of the brick will be procured from areas along the alignment. Enterprises supplying these products have been providing them to the expressway that is currently being constructed parallel to the alignment. Local suppliers will be encouraged to give hiring preference to vulnerable AP whenever possible.

6.3 LIVELIHOOD RESTORATION STRATEGY

202. During the preparation of the RP, TSDI had discussed about the long-term income restoration strategy with the cadres of the local governments and villagers along the railway, and became familiar with the income restoration strategies.

203. According to the Directive and Instructions for Facilitating Land Compensation and Resettlement issued by the Ministry of Land Administration on November 3, 2004, (Document No. 238) the resettlement of farmers would adopt following approaches:

♦ Resettlement for continued agricultural production. In most villages along the alignment, reserve farmland is available and, if requested by AP, will be allocated to them to replace their losses. This is possible in most affected villages where farmland losses are less than 10%7. If land is allocated to AP, the resettlement subsidy will remain with the village collective. If the AP prefers cash compensation, the resettlement subsidy will be paid to the AP. This latter option is likely when the amount of land lost is small. With this approach, few affected households will require further rehabilitation to restore their losses.

7 In cases where reserve land does not exist, some households will surplus land may voluntarily return their land to the collective. The compensation will be paid to the household that returned the land.

- 48 -

♦ Resettlement for re-employment. Local governments shall provide the farmers with free job training and arrange new jobs for them. Under the same conditions, the organization that acquires the land shall give preference in hiring those farmers who lost land. For the villagers whose collective land was acquired within the city planning area, it shall incorporate those people who lost land into the urban employment system and establish a social security system; ♦ Resettlement for having shares and dividends. For those projects that will have stable profits, the rural collective may negotiate with the organization that acquires land to exchange the compensation for land as shares, or exchange the right of using land as shares for those villagers who choose this form of compensation. The collective and households, under the conditions of the agreement, will have benefits with preferred stock8; ♦ Resettlement for relocation to other places. If the local area does not have the necessary productive land to provide farmers with equivalent replacement land, after consultation with the collective and the households, AP may relocate to other places under the government’s arrangement.9 204. There will be 4 new stations on TZR for passenger transport service and 21 new stations will provide mixed freight and passenger service. These will provide the AP with opportunities for service businesses. Employment in manual labor associated with freight transport (such as loading and unloading freight cars, and transporting rail cargo to and from local factories and enterprises) will be possible. The passenger stations should become local passenger transport centers, with substantial development possibilities for local taxi and bus transportation, food and catering services, hotels, shops, and other tourist service businesses that will provide employment for local people.

205. Over time, the areas along the alignment are expected to continue to enjoy the region’s rapid economic development. Mining and manufacturing activity will increase. Tourism is also expected to increase. Local officials will assist the AP develop appropriate plans so that they are able to take advantage of these opportunities.

206. As a component of the village resettlement and economic restoration plans, focus will be on establishing sustainable income-generating activities. Funds for training, skills development and livelihood including micro-financing and mentoring available from the local governments will be used for economic restoration. As the below sample resettlement and economic restoration plan indicates, the AP will be able to utilize the opportunities provided by TZR to develop long term opportunities.

207. One of the major benefits of TZR will be its impact on poverty reduction through job creation, and this will provide the basis for a sustainable livelihood restoration strategy. As discussed in the Poverty and Social Analysis report, TZR direct jobs, indirect jobs (jobs created from TZR purchases of inputs necessary for its operations), generated freight jobs (expansion of existing or development of new enterprises such as coal mining that will produce the generated freight), and tourism jobs have been estimated as shown in Table 6-1.

8 This option is not applicable to the Project because there is no indication that the AP will be offered the option to become shareholders in the TZR. 9 It is anticipated that nearly all resettlement will occur within existing villages. In the event that there are farmers who have to relocate outside their area, local governments will have to ensure that the necessary resources have been mobilized to support the relocating AP.

- 49 -

Table 6-1: TZR Total Jobs Created, 2012-2031 2012 2017 2022 2027 2031 TZR Direct Jobs 8,954 9,961 11,769 13,046 14,235 TZR Indirect Jobs 11,543 20,049 27,431 33,127 37,684 Generated Freight Jobs 103,118 412,720 434,401 445,603 454,936 Tourism Jobs 172 922 1,278 1,631 1,983 Total Jobs 123,787 443,651 474,879 493,407 508,838 Source: Consultant.

208. As the table indicates, total jobs created in 2012 numbers over 120,000, and increases to over 500,000 in 2031. If 50 percent of the total jobs are in the PIA, and one fourth of those are for low or unskilled labor, then the number of jobs created in these categories increases from about 15,000 in 2012 to over 60,000 in 2031. As noted above, the total adult workforce in the 79 surveyed villages is 55,000, which suggests that employment opportunities will become available during TZR’s operations period.

209. TZR will give hiring preferences to AP for low and unskilled positions in order to provide a basis for a sustainable livelihood restoration program. When AP have been trained for higher skilled jobs, TZR will again provide hiring preferences.

210. The majority of the created jobs will be outside TZR’s direct control. In order to ensure that AP are provided with opportunities to secure long-term employment, the RCSOs, Poverty Alleviation Offices, the ACWF and other concerned agencies will work with potential employers to identify AP that will be able to fill these positions. Funds and programs for training will be made available by local government.

211. Combined, the jobs created as a result of TZR and the support and training programs provided by various agencies, AP will be provided substantial opportunities to secure sustainable livelihood restoration that will lead to increased incomes, improved living conditions, and significantly reduced levels of poverty.

6.4 ECONOMIC REHABILITATION PLANS FOR SERIOUSLY AFFECTED VILLAGES

212. According to the surveys conducted by the TSDI in 2004 and early 2005 and the Consultant in November 2005, there are two villages that will lose 29.47 percent and 55.97 percent of their cultivated land. For these and other seriously affected villages found during implementation, the following discussion describes the economic rehabilitation plan to be prepared by the village following the final staking and the resettlement census.

213. Final decisions on alignment alternatives have not been made when the Consultant commenced its field surveys in November 2005. Therefore, local officials are not fully informed as to where stations and track would be located and could not begin their planning.10 There were also alternatives between stations, which, until resolved, delayed local planning. More specific information on the alignment will be available in early 2006 and local officials will be better informed for developing appropriate plans and implementation strategies. MOR is preparing schedules that will become operative following government approval of the Project on January 17, 2006. The Final Resettlement Plan and census will be completed by mid-2006. This will provide the exact names and locations of affected households, villages, schools, factories, shops, enterprises, and other organizations. It will also provide the basis for the calculation of compensation and resettlement.

10 Of the 79 valid survey forms received only 28 villages could provide information on the estimated area of land loss for the Project.

- 50 -

214. Resettlement can provide an excellent opportunity for the AP to benefit from the Project through compensation for land acquisition, relocation of housing, employment during construction (priority hiring preference will be provided by contractors), and skills development provided by resettlement training programs. Income generated by the AP and villages from these sources could be utilized for a range of investments, from setting up village factories to upgrading farm equipment and technologies to developing properties outside the village, or any mix of the above.

215. Local officials will be responsible for disbursing funds in a timely manner. But it will be very important that the census for compensation fully identify the special needs of these villages, and that the Final RP target them in terms of recommending strategies for resettlement officials to utilize in developing a concrete set of actions with the villages so that they can fully exploit the opportunities provided by the Project. Opportunities have to be defined with the villages and appropriate plans developed prior to compensation payments, if they are to maximize benefits from the Project.

216. Once the degree of impact of villages is known (after final alignment affecting a village has been completed), the process of developing economic rehabilitation plans for seriously affected villages can commence with significant involvement by the local people affected. Steps include, an inventory of the village’s resources, an analysis of the strengths and weaknesses of the village and its people, and the opportunities and threats facing them, both from resettlement and from adapting to the changes in income structure and daily life that will likely result. With this basic framework, villages can design processes to use their compensation to best rebuild their lives and their strategies for getting income in the new realities they will face after construction begins.

217. Different villages will face different levels of loss of land and loss of housing. They will differ in size, in the education and skill levels of their working-age adults. They will differ in resources and in their proximity to centers of economic development. Different villages with differing circumstances will need different strategies.

218. MOR and the three provinces are currently preparing a detailed work plan for implementing the resettlement census. Local officials will then be better informed. Resettlement Information Booklets will be provided to the AP before March 10, 2006 prior to the implementation of the resettlement census which is expected to commence in May 2006. It should be noted that local officials have implemented resettlement programs in the Project area in recent years, including for the current resettlement activities for the construction of the Qingdao-Yinchuan Expressway. Thus, they are familiar with resettlement requirements and issues.

6.5 SAMPLE VILLAGE RESETTLEMENT AND RESTORATION PLAN

219. A sample resettlement and income restoration plan is presented below. The sample plan describes the village that will be affected including its location, resources and opportunities for sustainable economic development. The plan also indicates the degree to which the village will be impacted by land acquisition as well as those who will be potentially vulnerable during relocation. The plan outlines how relocation will occur including support given to vulnerable households. The economic restoration components are separated into strategies during the construction phase of the railway and for longer-term economic sustainability.

220. As important as the plan itself is its timing. The resettlement and restoration plan should be developed in advance of land acquisition so that the necessary arrangements can be made to capture income-generating activities during railway construction as well as to ensure that potentially vulnerable households are provided with the necessary assistance. Village leaders should work with local officials to identify and mobilize the resources needed to successfully implement the plan.

- 51 -

6.5.1 Background Information on the Village and AP

221. According to the preliminary design, the village includes 1,500 mu (100 ha) of land, of which 900 is cultivated, and it has a population of 900 and 225 households. About 90 mu will be acquired for the railway, and 25 households will have to relocate.

222. The village is located 5 km from its nearest urban district, and is connected by road with regular local transport. Although weather conditions have affected agricultural production twice in the last decade, recent production has been fairly consistent. The land is of reasonable quality, and produced 250 tons of grain, including 20 tons of wheat, 10 tons of maize, 20 tons of potatoes, 50 tons of sweet potatoes, and 150 tons of rice last year. Per capita net income is CNY 2,500. The income level is higher than for rural villages entirely dependent on agriculture as an income source. About 25 percent of the workforce is employed in wage or salaried positions. Nearly 80 percent of the households report income from sources other than agriculture, with shops, home businesses, and occasional labor for wages accounting for most of this figure.

223. There are 20 poverty households in the village, 10 of which will have to be relocated. One of these consists of two elderly sisters. One of the households is headed by a disabled male with a wife and two children. Two of the households are headed by women with young children. The other 6 households, one of which is headed by a woman, are largely dependent on agricultural income but include able-bodied adults. There are two other non-poverty women-headed households that will have to relocate but one of the women is employed as a supervisor at a state- owned enterprise in a nearby micro-urbanization industrial zone, and the other is a successful entrepreneur with a restaurant and shop in the urban district.

224. The area around the village is rapidly developing. The nearby urban district and neighboring townships are participating in the government’s micro-urbanization strategy. New industries including light manufacturing are being established based on the availability of literate trainable workers and recent infrastructure investments. The area has a National Highway pass through it, and there is an existing railway that carries freight and passengers to markets in China and for export.

225. The impact of land acquisition on the village will be approximately 10 percent of loss of cultivated land, and the village has sufficient reserve land to accommodate relocated households. However, there are households that will be substantially affected by resettlement. The impacts of the railway on the village are two-fold:

♦ Adverse impact on agricultural production. Cultivated land is a primary production resource for agricultural production and it is non-regenerative. Land acquisition for the railway will decrease this resource, and, therefore, decrease the gross production of the village. The land for the railway includes some of the best land for cash crops such as grain and vegetables. Some of the land to be acquired is fertile and irrigated. Therefore, land acquisition will result in production losses in the near-term and it will also take time to develop new land into producing land. ♦ Positive impact. Resettlement will provide the potential to generate economic development in the village. Local officials in consultation with villagers have indicated that there is some low-yielding land near to a construction access road that can be utilized for a small light manufacturing facility that will produce high quality leather apparel goods. This will lead to job creation and as part of the compensation agreement, funds will be provided for villagers to be trained to operate the equipment. Importantly, the local government will utilize some of the revenue it receives from railway construction activity to assist in establishing the small enterprise. The construction access road will be utilized by the new enterprise because it connects to the local road network.

- 52 -

226. In summary, railway construction will bring the village more benefits than adverse impacts. The living standard of resettled people will be at least equal to their original standard of living. Principles for resettlement will encompass the following:

♦ Resettlement compensation will be based on allocating a majority of the funds to the AP; ♦ The remaining funds will be used for increasing the efficiency of agricultural production, skills training, and establishing a small light manufacturing enterprise; ♦ Resettlement of villagers will be within the village, and vulnerable households will have priority in selecting sites; ♦ Relocation will be in stages so as to minimize the need for temporary housing; and, ♦ Vulnerable households will be assisted throughout resettlement and economic restoration. 6.5.2 Housing Reconstruction

227. Principles for relocation and standards for rebuilding include the following:

♦ The AP will be consulted regarding their choice of sites, with priority for selection given to potentially vulnerable households, including poverty households, households with elderly members, households with disabled members and households that are headed by women. Farmers will be able to rebuild next to the existing village or at a decentralized location if agreed to by the village and the AP. ♦ The new house site will be on suitable terrain, and minimize the loss of good quality agricultural land. The site will be leveled and prepared for construction by the railway construction contractor at no cost to the AP. ♦ For farmer households resettled away from the village, the village will determine house sites on appropriate terrain, and the farmers will build the houses by themselves if they so choose. ♦ For vulnerable households requiring assistance, the village will provide the necessary labor and materials to ensure that the new house is at least comparable to the existing one. For poor households that are headed by women or a disabled person, the village will provide labor at no cost to the household, so that costs for labor calculated in the compensation agreement may be applied to upgrading the house or for other purposes as determined by the AP. ♦ Telephone lines and other affected infrastructure will be restored to the original standard. ♦ Power supply. Voltage for residences will be 500W per household, and for agriculture, 15W per mu. 380V shall be adopted for electrical wires from the transformer to the village and along trunk roads. Other electricity wires shall be 220V. ♦ Water supply. Households will be connected to the central system where appropriate. Several scattered sites will utilize wells that will be dug for railway construction. The water consumption standard is 70 liters/day/person, plus an agricultural allowance for livestock.

- 53 -

6.5.3 Supplementary Income Restoration Measures

228. Focus will be on developing sustainable income generating opportunities. This will be based on both opportunities provided during the construction phase as well as longer-term opportunities.

♦ During railway construction, 50 percent of those able and willing to work for wages from the village will be hired by the contractor or by companies producing sand and gravel from a nearby location. Hiring preference will be given to members of poor and other potentially vulnerable households. ♦ During construction, those households interested in supplying or servicing the work camps will be given priority preference for contracts over outsiders. For potentially vulnerable households, they will be supported with training (prior to the start of construction), micro-financing, and mentoring. In addition, the village will organize to ensure that women are given preference to establish these businesses and help to organize community support so that women-headed households with children are able to work. ♦ During construction, transition training will be provided to village members employed by the contractors including those with businesses supplying the work camps, to ensure that earnings are utilized appropriately, and with a focus on developing sustainable income-generating activities. ♦ For households that are not able to participate in longer-term sustainable income-generating activities, training and advisory services on the use of compensation funds will be provided so that these funds can be utilized over an appropriate time-span such as in interest-bearing savings accounts.

6.5.4 Livelihood Restoration Strategies

229. For sustainable income generating activities, the following will be implemented:

♦ Villages and groups will prepare plans to increase the value of production by switching to higher value products and upgrading agricultural inputs. Government officials will advise on these efforts. ♦ Income diversification will be emphasized based on the potential for employment at the new light manufacturing enterprise and the establishment of shops and other enterprises. Training and micro-financing assistance as well as mentoring will be provided by local officials and NGOs such as the ACWF. ♦ Poor and other vulnerable households will be given hiring preference at the new enterprise. ♦ For the two village shops that will have to relocate, all moving and transition costs including lost income and wages for employees will be fully compensated. The village in conjunction with the shop owners will determine the most appropriate sites for the new shops, and the plot will be leveled and prepared for construction similar to the arrangements for relocated housing. 6.5.5 Livelihood Training

230. When the AP and villages determine in conjunction with appropriate agencies that new enterprises or other employment opportunities will be a viable alternative to previous income earning activities, and training will be a necessary component of the new job or enterprise, resources will be made available to facilitate the transition to a new job or for the establishment of the new enterprise. In addition, the AP and villages will be provided with advisory services on the use of compensation funds to ensure that they are optimized for their intended purpose.

- 54 -

6.5.6 Restoration of Lands Temporarily Occupied

231. Land that is temporarily acquired will be restored to its original condition, or if the village so decides, returned in such form as to facilitate new uses such as the site for a new village enterprise or school. As part of the Village Resettlement and Restoration Plan, the village will determine how land that is to be restored after temporary acquisition will be utilized.

6.6 MEASURES FOR VULNERABLE GROUPS

232. Potentially vulnerable households and groups have been identified. Specific mitigation measures to ensure that AP in these households and groups benefit from TZR and are able to develop sustainable livelihood restoration are discussed below.

6.6.1 Poverty Households

233. Areas along the alignment range from relatively well-off to some of the poorest in China. The well-off areas near the termini of the alignment have benefited from China’s recent economic growth. At the same time, many villages located towards the center of the alignment have been isolated from these developments, and these are where the very poor live. The links between poverty, topography, and transport systems are apparent in the PIA. Most people living near the termini have diversified sources of livelihood and a sustainable standard of living. People living in the mountains or in isolated areas have too little unfertile land and insufficient means of livelihood. They also live in an area prone to drought, floods, erosion and uncertainty. The main causes of poverty in the project areas are: (i) natural calamity; (ii) lack of infrastructure; (iii) very limited and unsustainable source of livelihood; (vi) uneven economic development; and (v) poor health. The Project will benefit about 6.5 million people in the project area. Of them, about 70 percent are rural and 17.15 percent are poor with a net income per capita of less than CNY900 in 2004 (nearly $1 per day using purchasing power parity exchange rate).

234. About 435,000 unskilled person-years of work will be created during the construction of the railway. Half of the unskilled work will be targeted for the poor, totaling 217,500 person years at total wages of CNY1,631 million or CNY 7500 per-person year, more than 8 times the poverty line of annual income at CNY 900 per capita. The priority will be given to women, resettlement-affected people, ethnic minorities and other vulnerable people. In addition, during the construction, 80,693 person-years of local unskilled jobs will be created in the provision of construction material with total wages of CNY 605.2 million, of which 40,346 person years will be for the poor, with total wages of CNY 302.6 million. When the operation of the new railway starts in 2012, approximately 8,954 additional jobs will be created with total wages of CNY 107.4 million annually, that will increase to 13,922 job and CNY 289.4 million in wages in 2030. The local governments are responsible for provision of social services and poverty reduction funds for County Poverty Alleviation Planning (CPAP). This added revenue will be used for the range of poverty reduction and social activities including mitigation of negative impacts on HIV/AIDS/STIs, human trafficking and environment, with special attention to resettlement-affected groups, women, ethnic groups and other vulnerable people in the project area, including a program of income sustainability for the poor after the project implementation, especially those hired under for construction jobs on the project.

235. The Project’s railway stations, which will be connected to all levels of road network accessible by all villages including the poor, will create various jobs, and help distribute the benefits in the project area. There will be sufficient space in and around the stations for local area development, and the poor, women, ethnic groups and other vulnerable people will be supported by local governments to sell local specialties and other goods and services. Expecting more efficient freight transport of the existing railways and business travels by the project railway, many enterprises in the project area have been planning to expand its outputs and increase labor; about 52,437 jobs have been estimated by PIA companies as a result of TZR. From TZR’s revenues, it will purchase a range of inputs from other economic sectors that will result in 11,543 jobs created in 2012, and increase to 37,684 jobs in 2031. The jobs created by the generated freight will total 103,118 jobs in 2012, and increase to 454,936 jobs in 2031. Increased tourism will result in 172

- 55 -

jobs created in 2012, and increase to 1,983 jobs in 2031. All of these direct and indirect impacts of the project will provide conditions of the Chinese goal of micro-urbanization for poor families to (i) move away from unsustainable, mountainous and isolated farmlands, (ii) have better access to markets, and advanced educational and health facilities especially for pregnant women and (iii) build a sustainable future in new centers of economic activity, and complement the poverty reduction activities by the local governments to achieve the goal, such as assisting the poor with urban migrations, relocations, employment, local economic development, farmer-based rural tourism, agricultural product development, and health and physical infrastructure and natural resources improvement.

236. These concerted efforts to avail TZR’s impact on job creation to the poor will promote sustainable livelihood restoration for affected poverty households.

237. Additional resources for relocation, house reconstruction and land reclamation will be provided to AP poverty households as necessary. These resources include but are not limited to house site priority preferences, free labor for those households lacking adequate capacity for self- rehabilitation.

6.6.2 Women

238. Analyses of gender-disaggregated data and discussions with representatives of the ACWF indicate that women will need some assistance to fully benefit from the project. Data collected for the Poverty and Social Assessment and the RP indicate the following: (i) women comprise 48 percent of the total population in the project area; (ii) women primarily engage in agricultural activities; and (iii) male members from poor households tend to travel further for migrant labor opportunities than non-poor males, leaving behind a high percentage of households headed by women. The construction of the railway would create opportunities for local area development by (i) facilitating flow of materials and information into the area; and (ii) accelerating development of local industry and tourism. Many of the service sector jobs that will be created by the railway development and in the tourism sector seek women employees. The ACWF will provide business management and financial assistance to women interested in setting up small businesses that serve the construction crews and growing tourist sector. In addition, as women will have a greater exposure to the risk of HIV/AIDS/STIs and human trafficking, the mitigation measures will pay special attentions to women.

239. Poverty and social enhancement measures have been built into the project design, and special mitigation (or protection) actions have been included into the RP. For example, members of the community will collectively decide where schools will be relocated. Women, especially female heads of household, will be consulted as schools provide an informal source of daycare for their children. Poor women heads of household will receive assistance so that their children can remain in school, thereby helping to break the cycle of poverty while at the same time freeing women’s time during the day to work. Widows will be eligible for special assistance, if necessary, during land acquisition and resettlement. Women will be given priority for project-generated employment during construction and operation of the railway. The rise in female participation in the labor force and tourism market will increase women’s net income, thus improving overall family welfare, and increasing the status of women.

240. As with poverty households, affected women-headed households that lack adequate capacity for self-rehabilitation with respect to relocation, house reconstruction and land reclamation will be provided with additional resources including but not limited to house site priority preferences, free labor, and other resources as needed. Women will also be given hiring preferences. The ACWF will monitor the progress of and mentor the sustainability of women’s participation in the acquisition of benefits from TZR.

- 56 -

6.6.3 Ethnic Minorities

241. Minorities constitute 9.57 percent of the total population in the PIA. Almost all of these are Hui and concentrated in NHAR. It is estimated that about 300 Hui households (1200 people)_will need to be relocated and 4300 Hui households will be partially affected by land loss, 80% of which will lose less than 10% of the farmland. The Consultant’s and TSDI’s household surveys as well as evidence from other surveys indicate that Hui are fully integrated into the nation’s socio-economic structure and institutions. Many Hui will benefit from the special mitigation measures provided for all potentially vulnerable households. Hui will have priority to receive replacement farmland if desired by the AP. This is possibly because there are many newly created irrigated lands in the areas along the alignment where Hui are most affected (i.e., ). Also, many of these areas have new resettlement villages, so the scattered Hui households displaced by the railway can be relocated to these nearby sites and will benefit from better infrastructure. In this manner, Hui households will definitely receive better living and livelihood conditions.

242. There are very active positive village resettlement and poverty reduction programs in NHAR that are covered by provincial and county budgets that provide for provision of improved housing conditions, village infrastructure and social services, support for increasing incomes through grants, loans, training and mentoring, and job creation based on the development of village enterprises. Any project affected Hui households will be eligible to benefit from these programs.

243. In addition, the Hongsipu and Taiyuanshan Development Zones in NHAR are specifically designated poverty reduction zones where villages and people are resettled from high poverty areas with poor economic and living conditions, often from isolated mountainous areas. These two zones comprise 30% of Hui will be affected by partial farmland loss. Both of these zones will benefit substantially from TZR with access to stations included in the Project design. NHAR and national budgets are providing funds for investment, training and mentoring to develop industries and enterprises in these zones. Funds and other support for improved housing, village infrastructure and social services, and other development activities are also provided.

6.6.4 Other Vulnerable Groups at Risk

244. As discussed in Section 3.6.3.4, the most vulnerable households are those that lack adequate capacity for self-rehabilitation with respect to relocation, house reconstruction, land reclamation, and livelihood restoration. This would include the aged, low-income women-headed households, and low-income households with a disabled or chronically ill member.

245. AP falling into these categories (including Hui) will be provided with additional support including free labor and house site priority preferences as needed with respect to relocation, house reconstruction, and land reclamation as described above.

246. Livelihood restoration assistance may require other forms of assistance beyond what can be directly provided under the RP because if a household lacks capacity to secure an employment opportunity due to age or health, then pension support will need to be provided. There are programs that can provide this assistance. Poverty Alleviation Offices, the RCSOs, and the ACWF will identify these high risk AP during the RC, and work with appropriate agencies and institutions to ensure that these assistance programs provide support as needed.

- 57 -

SECTION 7: INSTITUTIONAL FRAMEWORK AND ARRANGEMENTS

7.1 INSTITUTIONAL FRAMEWORK

247. Table 7-1 outlines the Resettlement Process and Procedures, from project proposal stage to implementation. Within this framework, there are considerable opportunities for consultation and information exchange, including grievance an appeals mechanisms.

248. A resettlement institutional network will be set up to achieve land acquisition, building demolition and removal, and resettlement. Horizontally, the network includes two parties, MOR including its contractors and subsidiaries, and local governments. These organizations include the land acquisition and removal group of each contractor, the land acquisition and removal group of the RCSO under each level of the government, and the land administration bureaus of local governments. The institutional network may have to be modified if a joint venture company is established by the MOR and the three provincial governments and local governments will take responsibility for resettlement.

249. Government leaders have been given responsibility for these organizations and leaders from various departments are members of the organizations. The governments all indicated that local Development and Reform Committees (DRC) are responsible for issues related to project preparation. When the Project starts, all local governments will establish railway support offices or similar organizations to coordinate and support the Project.

250. Resettlement organizations under MOR and operation administration units are as follows: ♦ MOR Project Management Center/Foreign Capital and Technical Import Center (FCTIC); ♦ TZR Preparatory Leading Group/TZR Company (when formed); ♦ Land Acquisition and Removal Groups of Contractors; and ♦ Overall Design Group for TZR of the TSDI. 251. Resettlement organizations established in local governmental departments include the following: ♦ DRC (Development & Reform Committee) of Shanxi Province/RCSO; ♦ Taiyuan City Development and Reform Committee/ RCSO; ♦ Jinzhong City Development and Reform Committee/ RCSO; ♦ Luliang City Development and Reform Committee/ RCSO; ♦ Taiyuan City Land Resources Administration Bureau; ♦ Jinzhong City Land Resources Administration Bureau; ♦ Luliang City Land Resources Administration Bureau; ♦ Shaanxi Provincial Development and Reform Committee/ RCSO; ♦ Yulin City Development and Reform Committee/ RCSO; ♦ Yulin City Land Resources Administration Bureau; ♦ Ningxia Hui Autonomous Regional Development and Reform Committee/ RCSO; ♦ Wuzhong City Development and Reform Committee/ RCSO; ♦ Zhongwei City Development and Reform Committee/ RCSO; ♦ Yinchuan City Development and Reform Committee/ RCSO; ♦ Wuzhong City Land Resources Administration Bureau; ♦ Zhongwei City Land Resources Administration Bureau; ♦ Yinchuan City Land Resources Administration Bureau; ♦ The Development and Reform Committees/ RCSOs at the county level along the railway line (22 counties, cities and districts ); ♦ The Land Resources Administration Bureaus at all levels along the railway line (22 counties, cities and districts); and ♦ Land Acquisition and Removal Groups of Affected Villages and Affected Townships.

- 58 -

Table 7-1: Resettlement Process and Procedures Government Oversight Public Involvement

Project Proposal

Informal Consultation Revision to Land Use Plan Pre-Examination of Land Use and Basic Farmland

Stage I - Planning Approval of Land Use by LRB

Approval of Feasibility Study

Investigation/Survey of Inventory Land Acquisition Impacts Stage 2 - Approvals Registration of Land Public Hearing(s) Compensation by LRB Prepare Resettlement Plan by Land Use Unit and submit to LRB

Review by LRB Public Disclosure Public Hearing(s) 20 days

Disputes resolved by Local Government

Approval of Land Acquisition

Notification of Removal Cut-off date Stage 3 - Approvals

Disclosure of Compensation and Resettlement Plans

Grievance

Detailed Measurement Surveys

and

Compensation Agreements

Appeals Compensation Payments

LA and house removal Mechanism

Rehabilitation Measures

Source: Consultant

- 59 -

7.2 INSTITUTIONAL OBLIGATIONS

252. Under the leadership of the county DRC/RCSO, the town and village institutions are actually in charge of implementation of surveys, measurements, and confirmation of the affected land, buildings, attachments, and their removal.

253. The county RCSO/DRC, under the leadership of the prefecture DRC/RCSO, are in charge of making plans for land acquisition, compensation disbursement, and implementation of relocation and resettlement.

254. The county Bureaus of Land and Resources are in charge of unified land acquisition, approval of the applications for land acquisition permits, and, jointly with the RCSOs, development of particular compensation and resettlement plans for their county.

255. The county Bureau of Land and Resources is the executive department of the government in charge of unified land administration, which assumes the following major obligations:

♦ To implement State and provincial laws, regulations and policies regarding land administration. ♦ To conduct unified administration of land and urban/rural land affairs, land registrations; to survey and record the amount of land; to categorize land into quality levels; and to record and distribute land use certificates. ♦ To be in charge of land acquisition and disbursement, compensation disbursement and land reallocation; to conduct unified checks; to disburse land used temporarily for construction; and to examine and apply for permission to use land. ♦ To administer the land market and to monitor and set right all kinds of illegal activities concerning land use. ♦ To investigate and deal with cases violating the land administration laws. ♦ To make plans on land utilities and preserve exploitation based on local plans, national economy and social development objectives in cooperation with relevant departments; and to check and monitor the implementation of plans. ♦ To monitor basic farmland protection, land exploitation, and farmland re- cultivation. 256. The DRC/RCSOs at the prefecture level are in charge of land acquisition, housing demolition, and population resettlement within their administrative districts and fund management. They are also responsible for collecting and synthesizing relevant data for land acquisition in cooperation with the TZR Leading Preparatory Group. They also have the obligation to coordinate and manage work done by local and other groups in conjunction with Project construction.

257. The provincial RCSO (the chief executive of the province or his/her designee is the head, and other members coming from the DRC, land and resources administration, personnel sector, civil administration, electric power administration, as well as departments of security, industry, and agriculture) is responsible for making macro-level policies and consulting with MOR, and for coordination and cooperation with the local governmental departments at all levels. In addition, the group sets the standards of compensation for the province.

258. The Transport Departments of the provincial DRCs, as the macro management department of the provincial government for the Project, are in charge of conducting research of the essential issues and strategies concerning traffic and transportation development. It also takes charge in making long-term and medium-term plans on construction of transport and economic development, as well as special plans and annual plans. It examines and approves project plans and submits application for approval of the plans to higher institutions. It supervises and monitors collection and use of the basic traffic tolls and fees and helps to balance capacities of different transportation modes. It functions as a coordinator in resolving significant issues in the implementation of transportation development plans. At the preparatory stage, as far as this Project is concerned, the

- 60 -

traffic departments of the province/municipality involved will undertake all of the coordinating and preparatory work for the TZR.

259. Land acquisition groups of the contractors of all contracted sections are in charge of preparing and submitting applications for land acquisition, consulting with the local land departments on a daily basis, reporting progress in land acquisition, and handling incidental events.

260. Land acquisition groups of the construction organization mainly in charge of construction of railway project involved will be responsible for preparing land use plans and consulting with the land administration bureaus and RCSOs at the county level.

261. The land acquisition group of the TZR Construction Office of MOR will be responsible for the land acquisition and resettlement of the Project. The group is also responsible for consulting and cooperating with the provincial RCSOs in disbursing funds to the AP, as well as the internal monitoring of the Project during its construction.

262. The FCTIC of MOR has been coordinating the preparation of the resettlement plan and managing the socio-economic investigations and analysis conducted by TSDI and the Consultant. FCTIC will be responsible for coordinating the preparation of monitoring reports to ADB.

263. The overall design units of TSDI conduct surveys on and measurements of quantity and categories of the land acquisition, removal of houses and their appurtenances, and infrastructure at the stages of feasibility study, preliminary design and construction design, and are currently responsible for estimating the budget for resettlement, land acquisition, building demolition and removal. Actual budgets will be determined and approved by local governments.

264. RCSOs are set up and functioning in prefecture level cities of Taiyuan, Jinzhong, Luliang, Yulin, Wuzhong, Zhongwei and Yinchuan and will be functional shortly in all of the county-level units along the railway line. They are attached to the DRCs. The tasks and obligations of these offices include coordination and cooperation of activities regarding resettlement during the construction and implementation of land acquisition, housing demolition, and resettlement.

7.3 HIGH LEVEL COORDINATION

265. FCTIC, as the high level coordination agency, is in charge of resettlement related affairs during the preparatory period of the Project, and resettlement monitoring and evaluation during and after the implementation period of the Project.

266. TZR Preparatory Leading Group will assume the duty of the project owner on behalf of MOR and have close contact and cooperation with the RCSOs of the three provinces. The provincial RCSOs will instruct their subordinate units that are responsible for land acquisition, housing demolition and relocation to deal with the affairs of land acquisition, building demolition and relocation as well as resettlement in close cooperation with the RCSOs at all levels.

267. RCSOs in Shanxi, Shaanxi and NHAR provincial governments are in charge of consulting on major issues with MOR and formulating the macro resettlement policies. RCSOs in Taiyuan, Jinzhong, Luliang, Yulin, Wuzhong, Zhongwei and Yinchuan Prefectures are in charge of coordinating and managing the tasks relative to the resettlement of this Project. They are not only in charge of drawing up and conducting resettlement, and managing and coordinating the resettlement plan, but also coordinating with the provincial RCSOs and railway construction units.

7.4 CAPACITY TO PLAN AND MANAGE LAND ACQUISITION AND RESETTLEMENT

268. The DRCs of local governments along the line have accumulated abundant experience of resettlement in constructing similar infrastructure projects including municipal projects, the expressways running parallel to TZR, other expressways in Shanxi, Shaanxi and NHAR, and rail lines running from north to south in all three provinces. Provincial officials are familiar with ADB

- 61 -

policies covering involuntary resettlement. It is clear to officials in all prefectures on the alignment that PRC Law, Provincial Laws and ADB’s policy embody the goal of assuring that the economic well-being of affected persons is at least as good after the Project as it was before the Project.

269. MOR and local agencies have considerable experience in land acquisition and resettlement. The recent experience with other projects will provide a basis for the appropriate implementation of land acquisition and resettlement obligations under this Project. MOR and provincial officials will ensure that adequate support including training will be provided to local governments and villages as necessary, in order to implement appropriate land acquisition and resettlement procedures. While there may be sufficient resettlement experience at the ministry and provincial level, some counties may require some assistance. Similarly, some villages may have experience because of the current resettlement and construction of the expressway, while others may not.

270. As is the normal procedure, the local government will provide training in LAR procedures to the relevant county and township officials and village leaders who are directly involved with implementation. This will also provide an opportunity to explain ADB resettlement policy and requirements. ADB has agreed to provide support to increase local understanding of ADB policy and requirements set out in this RP.

- 62 -

SECTION 8: CONSULTATION AND GRIEVANCE REDRESS PARTICIPATION

8.1 PROJECT STAKEHOLDERS

271. Primary stakeholders of the Project are:

♦ People affected by permanent or temporary land acquisition; ♦ People affected by demolition and relocation of buildings and other improvements; ♦ People affected by relocation of factories and other business premises; ♦ The organizations affected by the demolition and relocation of public facilities; ♦ The individuals or collectives who own the above ground or underground attachments; ♦ The affected village groups and villages; ♦ The RCSOs and Bureaus of Land and Resources in the counties involved; ♦ The RCSOs and Bureaus of Land and Resources in the prefectures involved; ♦ Ministry of Railways, including the related functional departments such as Planning Department, Financial Department, FCTIC, Appraisal Center, etc; ♦ TZR Preparatory Leading Group; and ♦ Construction Companies and Units. 272. Secondary stakeholders include:

♦ PRC national government; ♦ Ministry of Finance; ♦ NDRC and Development and Reform Committees of the provinces, prefectures and counties; ♦ Poverty reduction offices in prefectures and counties; ♦ All China Women’s Federation in prefectures, counties and towns of the Project; ♦ The Civil Administration Bureaus in the counties; ♦ Third Survey and Design Institute and other design and engineering consulting firm which will be retained for detailed design and engineering supervision during implementation; ♦ The external monitoring agent of resettlement related to the Project; ♦ The domestic and international loan institutions for the Project; and ♦ Potential railway passengers and freight shippers on the existing line. 8.2 MECHANISMS FOR STAKEHOLDER PARTICIPATION

8.2.1 Consultations and Meetings

273. Table 8-1 shows that during the TZR project-planning period, a considerable number of meetings have been held with national, provincial and local authorities. Meetings have also been held with representatives of enterprises that could benefit from providing inputs for the construction and operating phases of TZR. Most importantly, affected villages have been identified, and meetings held with residents as well as representatives of schools and other agencies that could be potentially affected. These meetings have been followed by a range of surveys in order to assess the number of affected persons, agencies, schools and enterprises, as well as the intensity of the impacts: e.g., how many people will have to be relocated, how much land will have to be acquired at what estimated cost, how many schools will have to be relocated, etc. A total of 1,319 households have been surveyed by the Consultant in November 2005 in villages which are anticipated to be somewhat affected. This survey was in addition to 1100 households surveyed by TSDI in April 2005. An additional 1200 households off the alignment but in neighboring areas that could benefit from TZR employment opportunities as a means to alleviate poverty, have been surveyed by the Consultant in November 2005. Finally, 21 affected institutions and 121 large enterprises have been surveyed also in November 2005.

- 63 -

Table 8-1: Stakeholder Meetings and Surveys Persons Date Region Agency Participants Main Topics (15,150 total) January 2004- Local government officials, leaders of Opinions of local government and railway Project region TSDI 80 April 2004 railway department authorities about TZR

Local government officials, leaders of Opinions of local governments and railway March-April 2005 Project region TSDI 300 railway department, potential users authorities about TZR

Review FS conducted by TSDI, Opinions of Local government officials, leaders of May-05 Project region MOR, TSDI 300 local government, railway authorities and railway department potential passengers about TZR

Local government officials, leaders of Review FS conducted by TSDI, Opinions of NDRC, MOR, Sep-05 Project region railway department, potential 300 local government, railway authorities and TSDI passengers potential users about TZR

Zhongyang of Lvliang, Jingbian Local demolition policy, resettlement County of Yulin, Town/Township and Village leaders, Apr-05 TSDI 120 framework, channels for public participation, Hongsipu representatives of the village attitude towards TZR Development Zone of Wuzhong

Zhongyang of Lvliang, Jingbian County of Yulin, Heads of Households and Basic situation in village, opinion about future Apr-05 TSDI 120 Hongsipu representatives of the village demolition, attitude towards TZR Development Zone of Wuzhong

Survey 1100 Households that may experience Basic household situation, opinion about future April-May 2005 Project region TSDI households impact demolition, attitude towards TZR (4186 people)

PPTA Basic situation of local society and econmies, Nov-05 Project region Local government officials 141 Consultant attitude towards TZR

PPTA Nov-05 Project region Tourists at main tourist sites 17 Attitudes towards TZR Consultant

Points of origin and destination, aim of travel, PPTA Passengers at long-distance bus Survey of 610 reasons for choosing mode of transport, Nov-05 Project region Consultant station passengers frequency of travel, reasons for paying, occupation, income.

Model of the vehicle, owner of the vehicle, PPTA Drivers of trucks and buses at Survey of 559 number of years in use,origin and destination, Nov-05 Project region Consultant highway tolls drivers operating fee, goods transported, number of tonnes, frequancy of trips. Villages along the line that will sustain Survey of PPTA Basic household situation, opinions about Nov-05 Project region potential resettlement impact and 2387 HHs Consultants future demolition, attitudes towards TZR households in the PIA (8131 people)

Type and quantity of the production, raw PPTA Survey of 121 Nov-05 Project region Large enterprises along the line material consumption, number of employees, Consultant enterprises total wages.

Current environmental issues, likely PPTA Survey of 286 Nov-05 Project region Environmental Impacts environmental issues as a result of the TZR, Consultant people attitudes towards TZR.

Source: Compiled by Consultant from data reported by MOR and TSDI.

274. Table 8-2 provides a plan for public consultations and disclosure that should be utilized for each of the districts as they undertake planning for and actual resettlement of affected households, villages, enterprises, factories and other organizations. The proposed plan will greatly facilitate coordination amongst agencies, ensure that public participation is encouraged, and that resettlement proceeds as scheduled in a positive manner.

- 64 -

Table 8-2: Public Consultation and Disclosure Plan Timing No of Feedback/ Issues/ Activity Task (Date/ Agencies Remarks People Concerns Raised Period) Stakeholder Mapping of the project Completed 380 Local government Socioeconomic Before April 2005 when field data collection Identification area officials, village situation, resettlement began, 380 local government officials and leaders, village framework, demolition potential users were involved in stakeholder representatives policy, channels for meetings. public participation, Does not include subsequent passenger and attitudes towards TZR driver surveys, household surveys, and industry surveys. Project Distribution of March 10, 11,803- EA and local Based on other consultative meetings and Information information leaflets to 2006 land; authorities surveys, people in the impact area will be fully Dissemination affected persons (AP) 11,956- aware of TZR. house Consultative Discuss potential Apr. 2005- 11,736 AP, Socioeconomic Village Leaders: Benefits of TZR: better travel, Meetings with impacts of the project May 2006 representatives of situation, resettlement improved freight, more jobs, better flow of info, AP during affected framework, demolition new enterprise development. Scoping Phase enterprises and policy, channels for Disadvantages: concerns with pollution, schools, village public participation, concerns with relocation, potentially worse leaders and attitudes towards TZR living conditions, concerns with increased representatives, water use, safety concerns, income loss. local government officials Public Publish list of affected Jan. – May EA and local Notification lands/sites in a local 2006 authorities. newspaper; Establish eligibility cut-off date Socio-Economic Collect socio-economic Completed 10,516 TSDI and PPTA Socio-economic info Surveys: Benefits of TZR: 62% better travel, Survey info on AP as well as Consultant on AP as well as AP’s 71% improved freight, 37% more jobs, 43% AP’s perception on the collected data perception on the better flow of info, 49% new enterprise project project development. Disadvantages: 49% more pollution, 51% concerns with relocation, 32% potentially worse living conditions, 45% increase in water use, 40% safety concerns, 28% worried about income loss. 2087 households responded, and 75.4% support TZR, 12% are indifferent, and 12.6% object to the Project. Consultative Discuss entitlements, Apr. 2005 EA, local Meetings on compensation rates, – May authorities, AP

- 65 -

Timing No of Feedback/ Issues/ Activity Task (Date/ Agencies Remarks People Concerns Raised Period) Resettlement income restoration, site 2006 Mitigation selection, grievance Measures redress mechanisms Publicize the Distribute Leaflets or March- EA, local resettlement Booklets in local May 2006 authorities plan (RP) language Full Disclosure Distribute RP in local Prior to EA, local of the RP to AP language to the AP Project authorities Appraisal Mar. 2006 Web Disclosure RP posted on ADB Upon of the RP and/or EA website Project Approval Early 2006 Consultative Face to face meetings During EA, local Meetings during with the AP DMS May authorities Detailed 2006 Measurement Survey DMS Disclosure after Disclose updated RP to After DMS EA, local Detailed the AP July 2006 authorities Measurement Survey (DMS) Update RP and Based on DMS and AP Before submit to ADB consultation, finalize July 1, for approval the updated RP 2006 Web Disclosure Updated RP posted on After ADB of the Updated ADB and/or EA website Approval RP prior to land acquisition of RP Source: Consultant.

- 66 -

275. In the process of the preparation for land acquisition, housing demolition and resettlement, consultations and meetings have been conducted by the Consultant and will be conducted during the Project’s implementation. Consultations will be mainly held between:

♦ MOR and the affected provinces, prefectures and county governments; ♦ The railway construction units and prefectures, and county governments along the rail line; ♦ The local RCSOs, local Bureaus of Land and Resources and the affected villages and groups; and ♦ The local RCSOs, villages/groups and farmer households. 276. The content of the consultations will mainly involve the compensation standard for land acquisition and building demolition, the location and the means of new building construction, the schedule of removal, allocation and utilization of land compensation, and the resettlement methods.

277. In the preparation and implementation stages of land acquisition and building demolition for the Project, the local government and the affected people, the railway support institutions at different levels, the railway sector and the local sectors will constantly hold various types of meetings, including:

♦ Villager meetings to be held in the villages or village groups; ♦ Consultation meetings with the affected families to be held at the county, the township and the village levels; ♦ Meetings of the village cadres and villager representatives to be held at the county and the township levels; ♦ Negotiation meetings on the resettlement plans to be held between the RCSOs at the county and the township level; ♦ Working level meetings to be often held between the RCSOs and removal groups of the Project construction units; and ♦ Meetings to be held between the prefecture RCSO and the county RCSO. 8.2.2 Mass Meetings for Resettlement Planning and Implementation

278. During the period of negotiation on land acquisition, every village or group will hold the following two types of meetings:

♦ Meetings of the villager representatives held by the county or the town land administration departments. The themes of such meetings are to make clear the significance of the Project; the area, location, and the time of land acquisition; and the State and provincial laws, policies and regulations about land acquisition and resettlement. Such meetings are often held during the consultation and negotiation on land acquisition for a project. ♦ Meetings of all the villagers to be held by the village council with all the villagers or the heads of households as participants at least one month prior to decision. The themes of these meetings are to explain State and provincial regulations and policies; the area and amount of land acquisition; the standards of compensation; measures of rebuilding and people resettlement; rehabilitation plans for income restoration; allocation of compensation between the collective and affected households; investment of collective compensation; livelihood training needs and plans; and other issues identified during the consultative process. At each meeting opinions, suggestions, and complaints from the villagers are to be collected. Such meetings are often held during the period of land acquisition, implementation, and signing of contracts on compensation. ♦ Formal public hearings will be organized with the AP and other stakeholders at least one month prior to the implementation of the RP.

- 67 -

8.2.3 Public Participation

279. Features of public participation in this Project are:

♦ Pubic participation during the project preparation stage; ♦ Public participation during the implementation of land acquisition and resettlement; ♦ Public participation during construction; and ♦ Public participation for monitoring and appraisal after Project completion. 280. The focus of public participation include:

♦ Consultation; ♦ Resettlement meetings; ♦ On-the-spot investigation of the potential loss of material possessions and socioeconomic conditions; ♦ Comments and evaluation on the standard of compensation; ♦ Choice of locations for new buildings; ♦ Building of new houses by affected households; ♦ Investment of collective compensation; and ♦ Income restoration assistance, advice and training for affected households. 281. Village group leaders and villager representatives have been involved in investigating and confirming the amount of land to be acquired and the attachments. The participants in these investigations were the household heads, villager representatives, village cadres, the town RCSOs, and the TSDI.

282. After the investigation is completed, the details of the expected loss of buildings, crops, etc. will be verified and confirmed by the affected persons. Compensation agreements will be signed by all the parties concerned with copies retained by the affected villages and households, the RCSOs of local governments, and the railway construction units.

283. The location of the new house site has significant impact on the villager’s future life and on his/her other business activities. The villagers usually hope to build their housing on both sides of highways so that they may engage in business. The RCSOs will respect the villagers’ expectations, provide them with opportunities, and allow them a great deal of freedom in choosing new home sites. The affected villagers will be given sufficient room for adjustment and amelioration of their moving schedule, which will reduce the need for temporary housing. A monitoring mechanism will be established to verify actual performance of this process.

284. Public participation is one of the most important and indispensable steps in the project survey and design. The project survey and design units will go to the construction sites and conduct in-depth investigations. They will hold many types of negotiation and consultation meetings to gather comments and demands on the Project from all parties along the proposed alignment. Through many consultations, including signing contracts with the concerned departments of local governments along the rail line, solutions will be specified before Project construction begins, for such issues as water supply sources, drainage, sites for fill and disposal of spoil, and stone and sand supply. In addition, the survey and design specialists will discuss issues of district interest with RCSOs and work out plans to handle these issues.

285. Public participation is also an important aspect of Project evaluation. During compiling of the Resettlement Plan for the project, in-depth investigations were conducted by the TSDI and the Consultant to identify issues of common concern to the affected people. Questionnaire-based surveys and interviews along the rail line were conducted. People from provinces, prefectures, counties, townships and affected villages took part in the investigations and actions, so that they became clear about the Project. The households interviewed were cooperative and provided detailed data on the size of family, the area of household land, household income and expenditure,

- 68 -

housing condition and the number of durable items. Households also indicated the impact they expected from land acquisition and housing demolition, and expressed their opinions about resettlement and their attitudes toward the construction of TZR. This process will continue for the preparation of detailed resettlement plans and for resettlement implementation.

286. The Project construction process is also the process of public participation. During construction, the rural farmers and urban citizens along the alignment will have job opportunities and participate in the construction. The materials used for the construction may be procured from local sources, which will have a positive impact on the local people, industries and enterprises.

287. During and after the completion of the Project, the monitoring and the evaluation activities will also need public participation, in order to ensure that entitlements have been received as planned. The surveys and assessment for monitoring and evaluation will need public participation and support.

288. As the resettlement census work program is implemented, public participation will be included as a component, that will be followed by continued public participation as a component of the resettlement program, and will be followed by public participation as a component of the monitoring and evaluation program.

8.2.4 Publicity and Information Dissemination

289. Publicity and information dissemination on the Project started at the Project preparatory stage. The purposes and significance of the Project, the time and location of the Project construction components, as well as the relevant State policies concerning land acquisition and housing demolition by the governments at the provincial, prefecture, municipal and county levels will be all publicized in official notifications and through various media, such as newspapers, broadcasting, TV, and magazines. These activities are aimed at letting the local residents know the relevant issues concerning land acquisition and building demolition for the Project.

290. Unified land acquisition and housing demolition notices are publicized to all the affected people before implementing the demolition and relocation. The purpose is to make the public become familiar with the issues related to land acquisition and housing demolition, such as time and area of land acquisition, policies of compensation and resettlement, regulations of residence registration, and the prohibition on planting unplanned crops (in an attempt to inflate compensation claims).

291. Drafting of the Resettlement Information Booklet has started and will be distributed to all affected persons and villages through the land acquisition and resettlement offices of local government. The Booklet will include a detailed description of the TZR Project and the scope, procedures, principles, unit values of compensation, and grievance mechanisms associated with the Project’s land acquisition, building demolition, and resettlement.

292. The resettlers’ meetings are another essential way of message dissemination. The purpose of such meetings is to let the participants know first-hand the implementation of land acquisition, policies and standards of compensation, the strategies of housing rebuilding and resettlement, as well as to collect feedback information from the participants.

8.3 LOCAL INSTITUTIONS OR ORGANIZATIONS

293. Local government units will carry out resettlement functions and distribute compensation to affected persons and villages. Local units of ACWF will be contacted to obtain their support for affected women, and especially for those who are single heads of households.

294. Upon the issuance of the Project approval by the NDRC, the RCSOs and Land Administration Bureaus of the 7 prefectures and 22 counties along the railway line have started comprehensive and detailed recording of land to be acquired, measuring the amount of land to be

- 69 -

acquired and counting affected attachments, measuring area of housing to be demolished and counting affected attachments around the housing. These records will be very detailed and results will be listed in the registration cards or forms. For households to be displaced, the RCSO and the TZR Leading Preparatory Group of MOR will each keep a copy of the forms. Area of affected housing and the number of attachments of each household will be checked and signed with confirmations by the household head, RCSO representatives, village and township cadres, and personnel from railway construction units. The reason to do so is to ensure that land acquisition is effective, fair, and transparent. During this time some basic socioeconomic data for affected households will be collected in order to indicate the degree of impacts and identify households that are vulnerable and will face hardships during resettlement. The designation and eligibility and their special entitlements will be included in the household agreements. The Resettlement Census will be conducted during April-May 2006 and formal land acquisition procedures are expected to begin in July 2006 after ADB concurrence is received on the updated RP which will be submitted to ADB before July 1, 2006.

295. Based on the overall investigations on the amount of land acquisition and housing demolition, the prefecture and county RCSOs will discuss in detail implementation plans of displacement and resettlement in each area. The detailed resettlement plans will be prepared for each affected county, for seriously affected villages, and for enterprise relocation so that resettlement can be easily implemented on schedule. Consultations and discussions will be held with village cadres and representatives regarding detailed resettlement plans. The final resettlement plan will be publicized to affected people.

296. It is required in Article 25 of the Land Administration Law that cities and counties affected should implement land acquisition plans as long as it is legally approved and information regarding institutional approval, the approval document number, the purpose, scope, area of land acquisition, the compensation standards, measures of rural population resettlement, deadline to get the compensation registration for land acquisition are publicized in local townships and villages where the land acquisition occurs. This constitutes the first official publication of resettlement. According to the schedule, this will occur prior to ADB Management Review Meeting.

297. It is required in the same Article that land administration at city and county levels work together with relevant departments to formulate, based on the approved land acquisition plan, compensation and resettlement plans and publicize in local townships or villages to get feed back from local rural collectives and the AP. This constitutes the second official publication of resettlement. According to the schedule, this should occur in May 2006.

8.4 PROCEDURES FOR REDRESS OF GRIEVANCES

298. During the actual implementation of land acquisition and resettlement, the AP can appeal to resolve any problems or grievances regarding land acquisition, housing demolition and relocation, compensation and resettlement through the five levels of institutions discussed below.

299. In addition to this formal process of grievance redress, there will be frequent opportunities for AP to interact with Project and TZR company officials, RCSOs, contractor representatives, and staff from monitoring agencies through public meetings and hearings, community monitoring, and during their site visits to the affected villages. Village officials will also stay in regular contact with AP to ensure that compensation agreements are satisfactorily implemented. Where non- government organizations (NGOs) have established programs, AP will be able to discuss issues including the implementation of the compensation agreements. These various channels for AP to raise their concerns will be an important component of implementing the resettlement plans and compensation agreements even if they are not part of the formalized grievance redress process because they will enable many issues to be resolved before any of the below institutions for redress need to be contacted.

- 70 -

8.4.1 Appealing to the Land Administration of the County or Township Level

300. According to the management obligations of local government, grievances caused by land acquisition and resettlement should first be dealt with by land administration bureaus at the local level. In case the land administration bureau is unable to resolve the grievance, the claimant may appeal to higher levels.

8.4.2 Appealing to the Township, the County, and the Municipal Governments

301. If the grievance can not be resolved by the local land administration bureaus, the claimant may turn to the correspondence and visitation departments of the local governments, which are set up by various levels of government organs to handle letters and visits from AP (including grievances in land acquisition and housing demolition). The correspondence and visitation departments function at all levels of government. The claimant may express his/her grievance orally or in written form to the department, which then may coordinate with the departments concerned to have the matter resolved. If the grievance cannot be resolved in this way, the correspondence and visitation department will report the matter to the leaders of local governments.

8.4.3 Appealing to the Owners

302. The Project owner is the ultimate land user. The owner has the responsibility to resolve the problems and issues raised in the course of land acquisition. The owner of the Project is MOR or the Joint Venture company contemplated between MOR and the three provinces. During the Project’s construction, the TZR construction headquarters will carry out this duty on behalf of the project owner.

8.4.4 Appealing to the External Independent Monitoring Agent

303. The external independent monitoring agent will conduct follow-up investigations on the income and living conditions of the AP periodically during the monitoring period. The agent will evaluate the resettlement consequences and then will submit its Monitoring and Evaluation Reports to the Project owner, the local institutions conducting land acquisition and demolition, and the ADB. The affected persons, therefore, may express their grievances to the external monitoring institution, which is obligated to listen to, find out, and report the complaints and grievances of the AP.

8.4.5 Legal Action

304. If the grievance of the claimant cannot be resolved through the above procedures, the AP may resort to legal action by bringing the case to a hearing before the court of appropriate jurisdiction.

- 71 -

SECTION 9: RESETTLEMENT BUDGET AND IMPLEMENTATION SCHEDULE

9.1 LAND ACQUISITION AND RESETTLEMENT COSTS

305. Funding for land acquisition, resettlement and relocation will be negotiated and established between the MOR and each of the three provincial governments before actual implementation of the Project. These negotiations are underway within the general framework established under PRC Law.

306. It is expected that TZR will be owned and operated by a joint venture company (TZRC) to be established with shareholding by MOR and the three provinces. TZRC is, therefore, the Implementing Agency (IA) and MOR the Executing Agency (EA). On November 1, 2005 the four prospective shareholders of TZRC confirmed the following in writing to the NDRC (see Supplementary Annex 7, page SA7.1):

♦ The Project will be built jointly by MOR and the three provinces; ♦ The three provinces shall be responsible for the work on and cost of land acquisition and resettlement; ♦ The payment for land acquisition and resettlement made by the three provinces will be counted as their equity in TZRC; ♦ The total equity capital of TZRC will be CNY 9.1 billion (US$ 1.126 billion equivalent) of which the cost for land acquisition and resettlement is estimated at CNY 1.2 billion (US$ 148.46 million equivalent) broken down by the three provinces as follows: ► Shanxi Province: CNY 0.54 billion (US$ 66.81 million) ► Shaanxi Province CNY 0.30 billion (US$ 37.11 million) ► Ningxia Hui Autonomous Region: CNY 0.36 billion (US$ 44.54 million) ♦ The balance of the equity in the amount of CNY 7.9 billion (US$ 977 million equivalent) will be provided by MOR through the RCF. 307. Negotiations between the four prospective shareholders of TZRC are currently underway and the company is expected to be established by mid-2006 as a shareholding enterprise under the PRC Company Law.

308. Annex E presents the estimated land acquisition and relocation budget for each of the three provinces. Table 9-1 presents a summary for all provinces. The estimated budget for NHAR is provided by the provincial government. The provincial governments of Shanxi and Shaanxi are currently preparing their respective budgets. The estimated budget for these provinces is based on impact quantity data provided by TSDI and compensation standards provided by each province or prefecture. Management fees are paid to prefectures and local governments involved in land acquisition, resettlement and relocation. The taxes related to land acquisition and housing demolition collected by the State and local governments including land utility tax, land recordation stamp duties, etc. are not listed in the budget because MOR expects to negotiate a waiver with the three affected provinces.

309. The State Land Administration Law in Chapter IV, Article 31 requires that where a project acquires basic farmland, an equivalent replacement area must be acquired and brought into production. If such equivalent replacement area can not be reclaimed, a farmland reclamation fee must be paid to the State. The fees go into a fund with in utilized by the provincial Land and Resources Department to upgrade marginal farmland into basic farmland. The investments are

- 72 -

made on the basis of the annual Land Use Plan. For this Project, local government has agreed to ensure that basic farmland is maintained in the affected counties. This will particularly benefit people in poor villages. Furthermore, in NHAR a new farmland development compensation will be made directly to AP for development of new land to replace land lost to resettlement. As such this is a special entitlement to all AP in NHAR.

Table 9-1: Total Budget for Three Provinces

Average Total Amount of Total Land Item Compensation Compensation (mu) Rate (CNY/mu) (CNY million) Compensation for Land Acquision: Dry Land 29,265.0 7,498.5 219.4 Orchards 5,583.5 25,885.8 144.5 Paddy Land 24,936.7 20,962.1 522.7 Vegetable Plots 2,414.0 22,890.6 55.3 Woodland 2,234.0 8,159.4 18.2 Waste Land 4,527.5 695.1 3.1 Spoil Disposal Land 884.5 300.0 0.3 Fruit Trees and Other Trees 28.91 (20% of orchards) New Farmland Development 32.19 Cost Sub-total 69,845.2 1,024.7 Compensation for Standing Crops: Dry Land 25,939.4 410.5 10.6 Orchards 5,583.5 1,398.6 7.8 Paddy Land 23,070.0 761.2 17.6 Vegetable Plots 2,414.0 2,493.4 6.0 Woodland 2,234.0 697.7 1.6 Sub-total 59,240.9 43.6

Compensation for Temporary Land Acquisition: Dry Land (total rate for 3 years) 9,386.0 2,908.6 27.3 Waste Land (total rate for 3 18,688.0 1,317.7 24.6 years) Sub-total 28,074.0 51.9 Compensation for Building Demolition (sq.m) House with Tile Roof 48,912.0 458.3 22.4 Brick/Wood Building 269,090.0 403.9 108.7 Cave Dwelling 29,200.0 300.7 8.8 Factory Building 20,638.0 496.9 10.3 School Building 5,000.0 488.5 2.4 Appurtenances (green houses and other structures) and 55,553.0 567.2 31.5 Compensation for Moving Expenses Sub-total 428,393.0 184.1 Relocation of Infrastructure and Utilities 106.75

Administrative Fee (5%) 68.94

Total Estimated LAR Budget (excluding taxes and fees) 1,480.0 Source: Compiled from Annex E.

- 73 -

310. During project preparation, the proposed compensation standards have been provided and discussed with affected villages along the alignment. In March, specific policies and compensation standards will be distributed to all AP and villages in the form of an information booklet. Before commencement of land acquisition and resettlement, a census form will specifically list all assets of each AP and the compensation established for each asset. MOR (or the joint venture between MOR and the 3 provinces, if established for TZR) is responsible under the law to fully compensate all AP for their assets. The annual estimated cost of land acquisition and resettlement shown in Table 9-2 provides a basis for estimating these costs for use in the financial and economic evaluation of the Project. Actual costs may differ from the estimates given in this Table.

Table 9-2: Estimated Cost for Land Acquisition and Resettlement by Year (CNY million)

Item 2006 2007 2008 2009 2010 2011 Total Compensation for Land Acquision 614.82 409.88 1,024.69 Compensation for Standing Crops 26.16 17.44 43.60 Compensation for Temporary Land 31.15 20.77 51.92 Acquisition Compensation for Building 73.64 110.46 184.09 Demolition Relocation of Infrastructure and 42.70 42.70 21.35 106.75 Utilities Sub-total Base Cost 788.47 601.24 21.35 0.00 0.00 0.00 1,411.06 Administrative Fee 38.52 29.38 1.04 0.00 0.00 0.00 68.94 External Monitoring Cost 0.37 0.32 0.32 0.32 0.32 0.32 1.99 Internal Monitoring Cost 0.01 0.10 0.10 0.10 0.10 0.00 0.41 Physical Contingency 46.31 35.31 1.25 0.00 0.00 0.00 82.88 Price Contingency 0.00 18.92 1.34 0.00 0.00 0.00 20.26 Total 873.68 685.27 25.41 0.42 0.42 0.32 1,585.54 Source: Annex E and Tables 10-2, and 10-4. Physical contingency at 5.6% and price contingency at 3 percent per year.

311. In the updated RP, detailed compensation cost tables will be prepared to show charges for site development, enterprise relocation, special measures for vulnerable groups, livelihood training, staff training, internal monitoring and supervision, external monitoring and evaluation, taxes and other fees, and physical and price contingencies.

9.2 ANNUAL BUDGET

312. The annual budget of the cost of land acquisition and relocation shown in Table 9-2 are based on the following key assumptions:

♦ 60 percent of compensation for land acquisition, standing crops, and temporary land acquisition will be completed in the first year, and the balance in the second year. ♦ 40 percent of replacement of buildings and structures will occur in year 1 and 60 percent in year 2. ♦ 40 percent of relocation of roads, communication lines and power lines will occur in years 1 and 2 and 20 percent in year 3. ♦ 5 percent administration fee is included in the above costs. The physical contingency is assumed at 5.6 percent of base cost and the price contingency assumes an annual escalation of 3 percent. ♦ The internal and external monitoring cost for five years during the period of resettlement and the first two years after resettlement is completed is included in the budget. The Consultant estimates this cost at CNY 426 per kilometer per

- 74 -

year during the 2006-2011 period, totaling CNY 2.4 million (see Tables 10-2 and 10-4 for a detailed breakdown of internal and external monitoring costs, respectively).

9.3 SOURCES OF FUNDING

313. Until recently, funding for land acquisition and resettlement activities was provided from the MOR Railway Construction Fund and MOR borrowing from domestic sources. As part of railway financing reforms initiated in 2004 by MOR, a general framework agreement has been executed with all provincial governments calling for provision of funding for land acquisition and resettlement for new railway projects in exchange for share ownership in the project. Accordingly, MOR is negotiating with the 3 provincial governments to establish a joint venture company for TZR. If a joint venture company is established between MOR and the provincial governments, land acquisition and resettlement costs will be provided by the provincial governments as part of their contribution to the equity.

314. Funds for land acquisition, housing demolition, and resettlement will be disbursed to the prefecture RCSOs before the Project construction commences. The specific amounts will be decided in accordance with the amount of land acquisition, housing demolition, and work progress in each prefecture. The funds will be paid to local governments and disbursed to the AP prior to land acquisition and housing demolition.

315. The affected families (including people without legal title) will get compensation for their housing, attached trees, other improvements, and their loss of standing crops. Other affected parties (businesses, schools, utility owners, etc) will receive similar compensation for their lost assets. The affected villages will get compensation for affected land and attachments owned by them. The village collectives will decide on the distribution of proceeds in accordance with to the State Council’s Decision No. 28, the Ministry of Land Administration’s Directory of Instructions on Facilitating Compensation on Land Acquisition, and provincial regulations.

9.4 TIME SCHEDULE 316. The draft Feasibility Study was completed by TSDI in May 2005. The revised Feasibility Study for the Project has been completed by TSDI in September 2005, and has been approved by MOR. In November 2005 the TZR Leading Preparatory Group was established in MOR. Following pre-examination and approval of land use by the Ministry of Land and Resources on December 8, 2005, NDRC approved the Feasibility Study on January 17, 2006. State Environmental Planning Administration (SEPA) approval of the EIA is expected by early 2006 and final design of the Project will be completed by May 2006. The resettlement census is expected to be completed also by May 2006 and updated RP submitted to ADB for concurrence before July 1, 2006. 317. The construction period is planned for approximately 5 years with preliminary planning work beginning in mid-2006, commencement of LAR and civil works in July 2006, and projected completion of construction in the second quarter of 2011. The second half of 2011 and the first half of 2012 is planned as the time for trial operations and debugging. Commercial operations is planned to commence in mid-2012. If the commencement of main physical works for the Project changes, the anticipated completion time will be adjusted accordingly. 318. The preparatory stage of railway construction, including LAR, is usually four to six months, including roads to support construction, connections of electric power, and communication lines, building and getting workshops and yards ready, removal of the infrastructure on the land acquired, and getting permissions for utilities. 319. The land acquisition and resettlement implementation timetable will be decided in accordance with the civil works and construction schedule. Land acquisition should be done before civil works start and there should be three to five months for the removal and reconstruction of new housing.

- 75 -

320. Main activities on construction of TZR and resettlement are listed in Table 9-3, and Figure 9- 1 shows the activities in relation to the Project schedule. Table 9-3: Resettlement Schedule Implementation Activity Responsible Unit Schedule Preparation and Preliminary Design TSDI 2002.3~2005.10 of the Project Identification of land acquisition Local land administration office, local support 2005 .6~2006.5 (surveying and investigation) organization, township, village, railway construction unit Census of housing of the affected Local land administration office, local support families (including belongings), organization, township, village, affected household, 2006.4~2006.5 resettlement census railway construction unit Organizing consultation and Local land administration office, local support negotiation meetings and resettlers' organization, township, village, affected household, ongoing since 2004 meetings railway construction unit, TSDI and Consultants Preparation of detailed compensation Local land administration office, local support and resettlement plan (including organization, township, village, affected household, 2006.2~2006.5 identification of new housing site), railway construction unit, MOR, TSDI RIBs to the AP, Project Staff training Prepare land use plans and submit to TSDI and Local land administration office, with Ministry of Land & Resources for participation of village leaders and affected households 2006.4~2006.7 approval and other entities. Local land administration office, local support Updated resettlement plan and organization, township, village, affected household, 2006.5~2006.7 disclosure to the AP railway construction unit Execution of agreements for land Government support organization, local land acquisition and demolition with administration office, township, affected village and 2006.6~2007.6 villages and households affected household Implementation of compensation and Railway construction unit, government support 2006.6~2007.9 payment organization, affected village and affected household Building houses Affected household self-rebuilding 2006.6~2007.12 Affected household, village, township, railway Removal and demolition 2006.7~2008.3 construction unit Civil works and construction Railway construction unit 2006.7~2011.6 Source: Consultant.

- 76 -

2011 Figure 9-1: Project Implementation Schedule 2005 2006 2007 2008 2009 2010 2 Item J FMAMJJ ASONDJ FMAMJJ ASONDJ FMAMJJ ASONDJ FMAMJJ ASONDJ FMAMJJ ASONDJ FMAMJJ ASONDJ FMAMJJ ASONDJ F 1 Preliminary & Detailed Design, Engineering, and Documentation

2 Prequalification and Tendering

3 Land Acquisition, Removal, and Resettlement/Relocation 3A Resettlement Planning and Preparation 3B Disclosure of RP and RIB 3C Implementation of RP

4 Subgrade (Earthwork)

5 Bridges and Culverts

6 Tunnels

7 First Ballast

8 Track Laying

9 Second Ballast

10 Environmental Protection Works

11 Electrification and Power Supply

12 Signaling and Communications

13 Operational Buildings and Associated Works

14 Terminal Operating Facilities

15 Operating Equipment

16 Safety Monitoring System

17 Testing

18 Trial Operations

19Source: Commencement Consultant of Commercial Operations

- 77 -

SECTION 10: MONITORING AND EVALUATION

10.1 OBJECTIVES AND SCOPE

321. Monitoring of resettlement refers to the process of gathering information and providing data concerning resettlement activities and consequences before, during, and after the course of those activities. Evaluation means the process of analysis and appraisal of data gathered in monitoring with reference to the requirements of PRC Law and the ADB, the standards established in the RP, the condition of AP before removal, and with the conditions of the local population not displaced. Any large project will face problems in its execution. The real-time monitoring will help to find any problems, which may occur and solve them promptly.

322. The first purpose of monitoring and evaluation is to ensure timely execution of the Project as designed and scheduled. The second purpose is to find out problems and have them resolved promptly. The third purpose is to provide feedback to benefit design, execution and management of future projects.

323. Evaluation of resettlement is expected to examine and decide whether the displaced population is appropriately resettled from a sociological and economic perspective, and whether the income and standard of living of AP are at least as high as before resettlement. The conclusions drawn from monitoring and evaluation are supposed to provide feedback to the implementation and management of the Project so that inappropriateness, if any, can be redressed promptly and appropriate alterations made to implementation plans.

324. Monitoring and evaluation of resettlement include internal and external monitoring and evaluation. These will be discussed separately in the Section.

10.2 BASELINE DATA

325. Prior to implementation of monitoring on resettlement, it is necessary to establish a RP monitoring sample database representing at least 5% of the total affected households and 20 percent of seriously affected enterprises. Drawn from the Resettlement Census, each sample in the monitoring baseline will have a record consisting of the following information:

♦ Members of the affected household; ♦ Education level; ♦ Infrastructure facility services, such as health, safety, water, electricity, road, telephone and communication, etc.; ♦ Identification of the head of household as farmer or non-farmer; ♦ Total income of the family and income source; ♦ Number of members going outside their local area for jobs; ♦ Cultivated land contracted to the family; ♦ Agricultural production and value; ♦ Major expenses of the family; ♦ Quantity of productive assets and durable consumer goods of the household; ♦ Cultivated land affected; ♦ House affected; ♦ Other affected attached values/assets or impacts; ♦ Compensation quantity and category; ♦ Location of new house to be built and foundation area; ♦ Measure(s) of economic recovery; ♦ Reallocated cultivated land and category; and ♦ Other resettlement measures.

- 78 -

326. In addition, the survey conducted in all affected villages and urban units for this plan should be repeated annually for two years after resettlement so that conditions after resettlement are gauged to conditions prior to resettlement.

10.3 INTERNAL MONITORING OF RESETTLEMENT TARGETS

10.3.1 Objectives and Institutional Arrangements

327. The role of internal monitoring and evaluation is to insure that resettlement institutions are well functioning during the course of Project implementation. The main objectives are to insure that all of the resettlement work is done on time according to the schedule set in the RP, to guarantee that the AP have their rights and interests well protected, and that the civil engineering construction can be completed on time.

328. Internal progress monitoring will be carried out by Construction Coordination Department of Land Acquisition and Resettlement Group of TZR (or the joint venture company if it is formed), which will detail the internal monitoring framework at each railway management organization. The Project Construction Headquarters will submit information quarterly to MOR for inclusion in the quarterly project implementation report to ADB.

329. The resettlement data flow is from the county-level resettlement office and civil works contractors to the prefecture resettlement office, then to the TZR Project Construction Headquarters. The county-level resettlement office will fill out the forms regarding the resettlement progress on a monthly basis and submit them to the prefecture resettlement office and then to the TZR Project Construction Headquarters so that information can be aggregated and analyzed. The prefecture resettlement office will check the actual progress on a weekly basis. Data concerning Project construction will be compared with that presented in the tables filed by the county office.

10.3.2 Steps of Internal Monitoring

330. As part of the preparation for and internal monitoring of the resettlement plan, the following steps are envisioned:

331. The Ministry-Province agreements to be executed by the Minister of MOR and Governors of the Provinces along the line are documents with legal authority since the agreements are worked out in accordance with Land Administration Laws of PRC and Implementation Methods of the Land Administration Law formulated by the provincial governments. The agreements include all the basic principles and standards of land acquisition, housing demolition, and resettlement for this Project.

332. The RP formulated with coordination by MOR and participation of the prefectures along the line includes the actions and guiding principles that are commonly affirmed and accepted by all parties and, therefore, must be adhered to without any reservation during Project implementation.

333. The MOR coordinator will check and supervise on the spot so as to find out and resolve any difficulties and problems in implementation. The MOR will diligently execute Project owner’s duties and obligations, and keep close contact and good cooperation with the provincial RCSOs. TZR Leading Preparatory Group (or its successor, TZR Joint Venture Company) will compile internal monitoring information quarterly.

334. The TZR Leading Preparatory Group (or the TZR Joint Venture Company) will be in charge of handling all affairs in land acquisition, housing demolition, and population resettlement. In addition to handling complaints of the localities, the Group is obliged to supervise local governments in using compensations appropriately.

- 79 -

335. The resettlement teams from railway construction companies are in charge of land acquisition, housing demolition, and population resettlement within their sections and will report their work to TZR Leading Preparatory Leading Group. They will closely cooperate with rural local government units at the township level and are obliged to handle complaints and grievances of the local people.

336. The governments at all levels will organize implementation units for land acquisition, housing demolition and population resettlement. Implementation progress will be reported in written form to MOR once every three months to be incorporated into the quarterly report to ADB. The governments will resolve problems that occur in resettlement implementation in consultation with the railway construction units at all levels.

10.3.3 Scope of Internal Monitoring

337. Listed in Table 10-1 are internal monitoring indicators incorporated in the RP. The budget is shown in Table 10-2. With coordination of the TZR Leading Preparatory Group (or the TZR Joint Venture Company), a quarterly report on construction progress, funds transfer and disbursement and conditions of resettlement progress will be submitted to FCTIC of MOR, and a summary will be forwarded to ADB. The TZR Leading Preparatory Group (or the TZR Joint Venture Company) will also prepare a resettlement completion report after the resettlement activities are essentially finished. This report will focus on physical and financial aspects of land acquisition, compensation, demolition, relocation, reconstruction and livelihood rehabilitation. This report will be submitted to local governments, FCTIC and ADB.

- 80 -

Table 10-1: Internal Monitoring Indicators Monitoring Basis for Indicators indicators - Have all land acquisition and resettlement staff been appointed and mobilized for the field and office work on time? - Have capability building and training activities been completed on schedule? - Are resettlement implementation activities being achieved according to the agreed Budget & Time plan? frame - Are funds for resettlement being allocated to the resettlement agencies on time? - Have resettlement offices received the scheduled funds? - Have funds been disbursed to the affected villages and families according to the RP? - Has the social preparation phase (if needed) taken place as scheduled? - Has all land been acquired in time for Project implementation? - Have all AP received the complete entitlements according to numbers and categories of loss set out in the entitlements matrix? - Have AP received complete payments on time? - Have AP losing temporary land been compensated? - Have all AP received the agreed transport costs, relocation costs, income substitution support and any resettlement allowances, according to schedule? - Have all replacement land plots or contracts been provided? Was the land developed as specified? - How many AP have received housing as per relocation options in the RP? Delivery of AP - Does house quality meet the standards agreed? Entitlements - Have relocation sites been selected and developed as per agreed standards? - Are the AP occupying the new houses? - Are assistance measures being implemented as planned for host communities? - Is restoration proceeding for social infrastructure and services? - Are AP able to access schools, health services, cultural sites and activities? - Are income and livelihood restoration activities being implemented as set out in the income restoration plan? - Have the affected businesses received entitlements including transfer and payments for net losses resulting from lost business and stoppage of production?

- Have consultations taken place as scheduled? - Have resettlement booklets and announcement been delivered? Consultation, - How many AP know their entitlements? How many know if they have been received? Grievance and - Have any AP used the grievance redress procedures? What were the outcomes? Special Issues - Have conflicts been resolved? - Was the social preparation phase implemented? - What changes have occurred in patterns of occupation, production, and resource use compared to the pre-project situation? - What changes have occurred in income and expenditure patterns compared to the pre-project situation? What have been the changes in cost of living compared to the Benefit pre-project situation? Monitoring - Have AP’ incomes kept pace with these changes? - What changes have taken place in key social and cultural parameters relating to living standards? - What changes have occurred for vulnerable groups? Source: Consultant

- 81 -

Table 10-2: Estimated Cost of Internal Monitoring by Year (CNY) Year 2006 2007 2008 2009 2010 Unit Base Line Monitoring Monitoring Monitoring Resettle- ment Total Cost Cost Survey Quantity Unit Reports Reports Reports Comple- tion (RMB and (Quarterly) (Quarterly) (Quarterly) Report yuan) Report Remuneration: Task 1: Prepare and Pilot Test Survey Forms: Resettlement Person- 2 3,000 6,000 6,000 Experts Month Data Entry Person- 2 1,500 3,000 3,000 Clerk/Secretary Month Task 2: Surveys and Site Visits: Resettlement Person- 1 36,000 36,000 36,000 36,000 36,000 144,000 Experts Year Data Entry Person- 0.5 18,000 9,000 9,000 9,000 9,000 36,000 Clerk/Secretary Year Task 3: Preparation of Reports: Resettlement Person- 1 36,000 36,000 36,000 36,000 36,000 144,000 Experts Year Data Entry Person- 0.5 18,000 9,000 9,000 9,000 9,000 36,000 Clerk/Secretary Year Subtotal Remuneration 9,000 90,000 90,000 90,000 90,000 369,000 Miscellaneous Lump Estimate 2,000 10,000 10,000 10,000 10,000 42,000 Costs Sum Total Cost 11,000 100,000 100,000 100,000 100,000 411,000 Source: Consultant estimates.

10.4 EXTERNAL INDEPENDENT EVALUATION

10.4.1 External Monitoring

338. External independent monitoring must be performed by an independent social agency to conduct follow-up investigations of the implementation of land acquisition, resettlement and rehabilitation, and evaluate the whole process from an impartial, comprehensive and long-term point of view. The general task of external independent monitoring is to provide information and foresight, based on follow-up investigations and data collection, to the Project resettlement office and the Project administration institution so that any problems concerning population displacement and resettlement can be solved promptly.

339. The selected monitoring agency will prepare external monitoring reports and submit them to TZR Leading Preparatory Group (or the TZR Joint Venture Company) and the FCTIC of MOR, which in turn will forward them to ADB semi-annually.

10.4.2 Evaluation Plan

340. External monitoring for the Project will include the following four steps:

♦ The preparation stage will identify the target persons and scope of investigation and draw up the outlines and forms to be used during investigation. ♦ The investigation stage will involve interviewing the target persons at all levels one-by-one; conducting field investigations; and gathering information and background data. ♦ The information feedback stage will feed the information collected in the investigation stage back to the MOR, and discuss how to resolve problems, if any. ♦ The report preparation stage will sort, conduct diagnostic analysis and synthesis of the information collected, generalize conclusions, and draw up the monitoring and evaluation reports.

- 82 -

341. The basis of external independent monitoring and evaluation are the following:

♦ The procedures and guidelines of ADB as set out in the Handbook on Resettlement (Manila, 1998); ♦ The relevant PRC laws, policies, and regulations of the State and the local governments; ♦ The RP of the Project; and ♦ The general principle that AP’s livelihood should be better or at least remain at the present level after completion of the Project. 10.4.3 Methods and Scope

342. Research methods of external monitoring and evaluation for the Project involve sample surveys, case studies, investigation of key problems, group interviews of important informants, follow-up visits, field observations, and analysis of correlative data banks collected by local government offices and MOR units.

343. The external monitor will conduct its own baseline survey and be responsible for insuring the accuracy and validity of the baseline census and survey data collected as part of internal monitoring. The monitor will evaluate and confirm annual tracking re-survey data of the village and household sample, and analyze the data collected during project construction. The monitor will also conduct investigations of resettlement implementation at six-month intervals, and will make recommendations and submit a report to local governments, FCTIC and ADB.

344. At least for two years after the conclusion of the construction project or successful resettlement, the external monitor will be responsible for re-surveying the baseline households and villages in order to evaluate the success of the TZR resettlement program. The annual evaluation reports will be submitted to the local governments, FCTIC and ADB. Listed in Table 10-3 are external monitoring indicators required by ADB, which will be followed, in external monitoring of the Project.

- 83 -

Table 10-3: External Monitoring Indicators Monitoring Basis of Indicators indicators

- Location - Composition and structure: ages, educational and skill levels - Gender of household head - Ethnic group - Access to health, education, utilities and other social services Basic - Housing type Information - Land and other resource ownership and utilization patterns on AP - Occupations and employment patterns Households - Income sources and levels - Agricultural production data (for rural households) - Participation in neighborhood or community groups - Access to cultural sites and events - Value of all asset forming entitlements and resettlement entitlements

- Were house compensations made free of depreciation, fees or transfer costs to the AP? Restoration - Have the AP adopted the housing options developed? of Living - Have perceptions of community been changed? Standards - Have the AP achieved replacement of key social and cultural elements?

- Were compensation payments free of deduction for depreciation, fees or transfer costs to the AP? - Were compensation payments sufficient to replace lost assets? Restoration - Was sufficient replacement land available of suitable standard? of - Did transfer and relocation payments cover these costs? Livelihood - Did income substitution allow for re-establishment of enterprises and production? - Have enterprises affected received sufficient assistance to re-establish themselves? - Have vulnerable groups been provided proper means of earning income? - Do jobs provided restore pre-project income levels and living standards?

- How much do the AP know about resettlement, procedures and entitlements? - Do they know if these have been met? Levels of AP - How do the AP assess the extent to which their own living standards and livelihoods Satisfaction have been restored? - How much do the AP know about grievance and conflict resolution procedures?

- Were the AP and their assets correctly enumerated? Effectiveness - Were any land speculators assisted? of - Was the time frame and budget sufficient to meet objectives? Resettlement - Were entitlements too appropriate (wide or narrow )? Planning - Were vulnerable groups identified and assisted? - How did resettlement implementers deal with unforeseen problems? Other - Were there unintended environmental impacts? Impacts - Were there unintended impacts on employment or incomes? Source: Consultant.

10.4.4 TOR and Estimated Budget

345. According to the requirements stipulated in the “The Decision of Investment System Reform” issued by the China State Council in 2004, all construction projects shall be properly supervised through the entire construction process. It is also a requirement of ADB that loan projects that result in land acquisition and resettlement be properly monitored and evaluated. In order for the implementation of the land acquisition and resettlement program of the TZR Project

- 84 -

to comply with the provisions of the RP, monitoring of implementation, both “internal” and “external”, will be carried out during and after the implementation of the Project.

346. Annex F includes the Terms of Reference for external monitoring consultancy services. An independent monitoring agency (Monitor) will be engaged for the external supervision, monitoring and evaluation. The Consultant will be a PRC entity with experience on ADB or World Bank projects dealing with resettlement issues.

347. Monitoring and evaluation will include, but not be limited to:

♦ Monitoring the progress and effectiveness of RP implementation; and ♦ Evaluation of income restoration and post-resettlement conditions of the AP and host communities. 348. For the Monitor, the objectives of monitoring and evaluation are to assess if the land acquisition and resettlement is implemented in accordance with the RP and if the goals and principles of the RP are achieved. Specifically, monitoring and evaluation will focus on the following aspects of the AP’s situation and the resettlement process.

♦ Economic situation prior to and after displacement of land or housing; ♦ Timely disbursement of funds; ♦ Environmental conditions; ♦ Social adaptability after resettlement; ♦ Rehabilitation of vulnerable groups; ♦ Condition and quality of land temporarily acquired when it is returned to the original land users; ♦ Measures taken by the village committees to restore affected livelihoods; and ♦ Living conditions and economic status of the AP following resettlement in comparison to the non-affected household in the Project area. 349. Monitoring and evaluation will include the establishment of socio-economic baseline of the AP prior to land acquisition or physical relocation, and the regular monitoring of their relocation or adjustment during Project implementation, and evaluation of their situation for a period of one to two years afterwards. Qualitative and quantitative methods will be used to evaluate the standard of living of the AP. Investigations will include interviews with local officials, village leaders, and a survey of 5% of affected households, including 20% of seriously affected households and enterprises. Monitoring will also be done for seriously affected villages, if any. Focus group discussions will be conducted to address issues related to women, poor, other vulnerable groups, and unemployed workers.

350. The following indicators will be monitored and evaluated in accordance with the principles, entitlements and rehabilitation strategies and plans stated in the RP:

♦ Disbursement of entitlements to the AP and enterprises/businesses: Compensation for housing, cultivated farmland, and employment as specified in the RP will be detailed. ♦ Development of economic productivity: Re-allocation of cultivated land, land restoration, job opportunities available to the AP, number of AP employed or unemployed will be documented. ♦ Provision of alternative housing: The AP must move into their alternative housing at least one month before the relocation. For those opting for self- construction, payment of compensation and provision of housing sites should

- 85 -

be completed at least three months before the relocation. The compensation for construction of houses should be equivalent to the replacement cost. The AP must receive as scheduled their entitlements regarding moving allowance and transportation allowance. ♦ Restoration of basic infrastructure and special facilities: All necessary infrastructure and special facilities should be restored at the resettlement sites at least up to a standard equal to the standard at the original location; the compensation for all infrastructure and special facilities should be sufficient to reconstruct it to the same quality. ♦ Level of satisfaction of AP: The level of satisfaction of the AP with various aspects of the resettlement program and the operation of the mechanisms for grievance redress will be reviewed and the speed and results of grievance redressing measures will be monitored. ♦ Standard of living: Throughout the implementation process, the trends in standards of living will be observed and the potential problems in the way of restoration of standards of living will be identified and reported. The Monitor will carry out a comprehensive socio-economic survey after the completion of resettlement implementation to document the standards of living and the conditions of the AP after resettlement. The survey will be conducted annually for two years, or until most affected households have fully restored their living standards and income generation. ♦ Reemployment of affected staff and workers, and compensation of lost wages. ♦ Social adaptability and cohesion: Impacts on children, the elderly and other vulnerable groups, public participation, AP’s attitudes and reactions to post resettlement situation, number of complaints and appeal procedures and resolution, implementation of preferential policies, income restoration measures, and improvements in women’s status will be described. 351. During external monitoring, some special attention/provisions specified in the RP will be paid to women, the poor and vulnerable groups. These include:

♦ The status and function of women: Closely monitor any change in women’s status, function and situation. At least 40 percent of AP surveyed will be women. The monitoring and evaluating unit will also provide recommendations and assistance to the EA in respect of women’s issues. ♦ Care and attention to vulnerable groups, especially those that will face hardships due to resettlement: Closely monitor living conditions of elderly, the handicapped, the poor, and other vulnerable groups after resettlement, to ensure that no hardship is experienced. ♦ Monitoring and evaluating will provide information on utilization and adequacy of resettlement funds. The respective local Audit Bureau will audit resettlement accounts and funds. The details of this audit will be made available to the external monitoring agency. 352. A monitoring report will include:

♦ Conclusions of investigations and evaluations; ♦ Major existing and potential problems; ♦ Recommended mitigation or prevention measures which will be incorporated into a revised plan if necessary; and ♦ Assessment of previous follow-up actions.

- 86 -

353. The Monitor will provide the EA, MOR, Shanxi, Shaanxi and NHAR local governments, respective resettlement implementation offices, and ADB with monitoring reports every six months (semi-annually) during the implementation of resettlement.

354. In addition, resettlement will be evaluated by the independent external evaluation organization two years after the completion of TZR construction. The aim is to follow up and evaluate the resettlement in the long term that includes the implementation of resettlement, changes in the living standards and life styles of the AP, and the restoration and reconstruction of the infrastructure in the affected area. A completion report on resettlement will then be provided to the EA, MOR, Shanxi, Shaanxi and NHAR local governments, respective resettlement implementation offices, and ADB.

355. All reports will be available in English and Chinese. EA and MOR shall ensure that information on the progress and status on all aspects of land acquisition and resettlement activities will be provided to the external monitor for verifying the progress reports. FCTIC will forward copies of the reports by the EA including the semi-annual progress reports, in English to the Asian Development Bank. FCTIC will also submit a resettlement completion report to the ADB, to be followed by post-resettlement impact evaluation reports by the monitor, which should provide further evidence whether adverse effects of the Project have been mitigated adequately.

356. Table 10-4 is the Consultant’s estimate of the budget for external monitoring. The estimated budget includes the baseline survey in 2006 and two follow up evaluation surveys in two-year intervals with the first in 2009 serving as an interim report and the last in 2011 serving as the final evaluation to confirm successful completion of resettlement in accordance with the RP.

Table 10-4: Estimated Cost of External Monitoring Surveys by Year (CNY) Year 2006 2007 2008 2009 2010 2011 Unit Base Line Monitoring Monitoring Monitoring Annual Annual Total Cost Cost Survey Quantity Unit Reports (semi- Reports (semi- Reports Evaluation Evaluation (RMB and annual) annual) (semi-annual) Report Report yuan) Report Remuneration: Task 1: Prepare and Pilot Test Survey Forms: Senior Person- Resettlement 1 10,000 10,000 10,000 Month Expert Person- Mid-Level Expert 1.5 7,500 11,250 11,250 Month Person- Survey Takers 3.5 5,000 17,500 17,500 Month Data Entry Person- 2 3,000 6,000 6,000 Clerk/Secretary Month Task 2: Surveys and Site Visits: Senior Person- Resettlement 2.5 10,000 25,000 25,000 25,000 25,000 25,000 25,000 150,000 Month Expert Person- Mid-Level Expert 7 7,500 52,500 52,500 52,500 52,500 52,500 52,500 315,000 Month Person- Survey Takers 10 5,000 50,000 50,000 50,000 50,000 50,000 50,000 300,000 Month Data Entry Person- 5 3,000 15,000 15,000 15,000 15,000 15,000 15,000 90,000 Clerk/Secretary Month Task 3: Preparation of Reports: Senior Person- Resettlement 2.5 10,000 25,000 25,000 25,000 25,000 25,000 25,000 150,000 Month Expert Person- Mid-Level Expert 3 7,500 22,500 22,500 22,500 22,500 22,500 22,500 135,000 Month Person- Survey Takers 2 5,000 10,000 10,000 10,000 10,000 10,000 10,000 60,000 Month Data Entry Person- 3 3,000 9,000 9,000 9,000 9,000 9,000 9,000 54,000 Clerk/Secretary Month Subtotal Remuneration 253,750 209,000 209,000 209,000 209,000 209,000 1,298,750

Other Direct Total Costs: 2006 2007 2008 2009 2010 2011 Travel Tickets Lump 1 70,000 70,000 70,000 70,000 70,000 70,000 70,000 420,000 and Per Diem Sum Lump Processing 1 15,000 15,000 15,000 15,000 15,000 15,000 15,000 90,000 Sum Lump Translation 1 15,000 15,000 15,000 15,000 15,000 15,000 15,000 90,000 Sum Lump Misc. Expenses 1 15,000 15,000 15,000 15,000 15,000 15,000 15,000 90,000 Sum Subtotal Other Costs 115,000 115,000 115,000 115,000 115,000 115,000 690,000

Total Cost 368,750 324,000 324,000 324,000 324,000 324,000 1,988,750 Source: Consultant estimates.

- 87 -

10.5 PARTICIPATION BY AFFECTED PEOPLE

357. Participation by affected people in monitoring and evaluation is through consultation and discussions with internal monitoring personnel and with persons from the external monitoring agency.

10.6 MONITORING REPORT

10.6.1 Internal Monitoring

358. During the implementation of land acquisition and resettlement and economic recovery, the local resettlement office shall report the results of internal monitoring every 3 months. The TZR Leading Preparatory Group will quarterly submit information on land acquisition, housing demolition and resettlement to FCTIC for inclusion in the quarterly project implementation report to ADB by FCTIC. The internal monitoring report shall include the information depicted in Tables 10-5 to 10-7.

Table 10-5: Quantity of Land Acquired and Temporary Land to be Used Total Land Acquired (mu) County and Industrial Other Temporary Affected Items Irrigat Other town/ Dry and Non- Land Villages ed Orchard Cultivated Total Townshi land Mining cultivated Land Land p Land Land Element A Element B Element C Element D Total

Table 10-6: Quantity of Housing Demolition

2 Industrial Buildings Family Buildings to be Removed (m ) to be Removed (m2) County Brick Affected Items Earth No. of Building and town/ Brick with Simple No. of Villages Wood Total Relocated Floor Township Concrete Tile Structure Industries Structure Families Space Roof Element

A Element

B Element

C Element

D Total

- 88 -

Table 10-7: Compensation for Resettlement Land Temporary Family Industry Other Affected County and Items Acquired Use Land Removal Relocation Costs Villages town/Township Element A

Element B

Element C

Element D

Total Note: This table should be made for comparison between the plan and the actual conditions.

10.6.2 External Monitoring

359. An external monitoring organization shall conduct follow-up investigations of the implementation of the resettlement process and output. During the implementation of the land acquisition and resettlement, the external monitoring investigation and report shall be submitted every year (including the update of household survey database and progress of resettlement). The report by external monitoring organization shall be submitted to FCTIC and then forwarded to ADB by FCTIC. The external monitoring and evaluation report shall include the information depicted in Tables 10-8 to 10-10.

360. Table 10-8 shows the scope of resettlement. Based on such data, further explanation should be made on why (for some component), the scope of resettlement has been reduced, while for some other components, the scope of resettlement has increased. This table can also be used to compare the actual implementation progress versus the total planned target for resettlement.

361. Tables 10-9 and 10-10 show the compensation rates for resettlement. By visiting selected villages and interviewing different AP, the monitoring agency should compare compensation rates for various items, including different structures, attached properties, and different types of land. Such comparisons should give detailed explanations if there are major gaps between the compensation in the RP and actual compensation.

Table 10-8: Impacts of Resettlement Resettlement Population Element Land Acquired Building Relocated and Number of HH Element A Element B Element C Element D Total

Table 10-9: Compensation Rates for Land Acquired Element Irrigated Dry Land Forest Land Orchard Element A Element B Element C Element D Total

- 89 -

Table 10-10: Compensation for Relocated Buildings Element Brick Concrete Brick Wood Earth Wood Compensation Element A Element B Element C Element D Total

362. The third issue is to see whether proposed rehabilitation measures in the RP have been implemented, which include both economic rehabilitation and housing reconstruction. For the housing reconstruction, the report should focus on whether all the relocated households have been allocated new housing plots free of charge; whether they received all their housing compensation, including compensation for other properties, moving and transfer assistance, etc.; and whether the total compensation was sufficient to build their houses. A comparison of housing conditions between old and new houses should be conducted among selected AP. The household survey will focus on whether they received all the agreed compensation or rehabilitation, such as self-employment funds, whether the village group has redistributed farmland, etc.; and what their current income level is, and whether this is higher than it used to be. On the question of income change, it is better to select a set of sample households before resettlement commencement to establish a baseline, and continue monitoring their income changes during the implementation process through regular survey updates. 10.7 ESTABLISHING A COMPUTERIZED DATABASE 363. According to the requirements of China’s legal framework and ADB’s policies, every construction project should be supervised throughout the entire construction process. TZR is a major railway project with a large investment, land acquisition, people resettlement, and substantial impacts on environment, social and economic development. Thus, it is necessary and essential to establish a computerized database for TZR’s planning and management to provide support for the EA, MOR and local governments at various levels. This computerized database is also necessary to meet the requirement of ADB in monitoring and evaluation of the TZR Project. 364. A functional and accessible computerized database should enable the collection, recording, storage, processing and transmission of data. The computerized database will include following information: ♦ Every step of the implementation of land acquisition and resettlement; ♦ All policies and documents related to the resettlement plan; ♦ Basic information on AP households; ♦ Restoration of living standards for AP households; ♦ Restoration of livelihoods for AP households; ♦ Levels of AP’s satisfaction; ♦ Effectiveness of resettlement planning; ♦ Social and economic impacts to every area affected by TZR; ♦ Effectiveness of planning and management of EA, MOR and local governments at various levels. 365. To ensure the effectiveness of the database, it will be updated according to a fixed time schedule (for example, quarterly). The updated database will be utilized to provide regular reports to the various organizations involved in the management, implementation and monitoring of the Project. Importantly, the computerized database and the regular reports provided by it will

- 90 -

provide a basis to systematically analyze “lessons learned” during the Project’s implementation so that necessary corrections can be made in a timely and functional manner.

ANNEX A

LAND ACQUISITION AND RESETTLEMENT BY COUNTY/DISTRICT

- 91 -

Annex A Table A.1: Land Acquisition by County/District (mu)

Permanent Land Acquisition Temporary Land Use Administrative District Paddy Vegetable Waste Waste Dry Land Orchard Woodland Subtotal Dry Land Subtotal Land Land Land Land Xiaodian District 269 1,598 101 66 2,035 Taiyuan City Qingxu County 273 1,572 105 70 2,021 Subtotal 0 542 3,171 207 135 0 4,055 0 0 0 Yuci District 210 1,289 42 14 1,556 0 0 0 Jinzhong City Subtotal 0 210 1,289 42 14 0 1,556 0 0 0 Jiaocheng County 270 1,515 102 67 1,955 0 0 0 Wenshui County 0 176 1,018 8 1 347 1,551 0 0 0 Fenyang City 1,491 405 382 2,278 10 0 10 Luliang City Lishi County 1,531 660 610 2,802 10 5 15 556 485 210 1,251 0 5 5 Subtotal 3,577 446 4,085 111 68 1,550 9,837 20 10 30 Total Shanxi Province 3,577 1,199 8,545 360 216 1,550 15,447 20 10 30

Wupu County 0 77 643 0 720 497 1,274 1,771 Suide County 310 1,417 300 0 2,027 589 1,674 2,263 1,175 1,159 310 0 2,644 775 1,222 1,997 Yulin City Hengshan County 0 236 1,188 370 0 1,794 740 1,274 2,014 Jingbian County 3,733 1,929 1,663 448 974 8,747 595 774 1,369 3,843 1,757 1,631 481 858 1,054 9,624 995 1,196 2,191 Subtotal 9,060 4,000 7,058 1,909 1,500 2,028 25,555 4,192 7,415 11,607 Total Shaanxi Province 9,060 4,000 7,058 1,909 1,500 2,028 25,555 4,192 7,415 11,607

Yanchi County 9,634 374 1,063 287 1,809 13,166 500 1,082 1,582 Taiyangshan 375 0 901 0 1,276 30 30 Developing District Wuzhong City Tongxin County 1,616 0 936 0 2,552 300 802 1,102 Hongsipu 14 0 984 0 998 150 150 Developing District Subtotal 11,638 374 3,883 0 287 1,809 17,990 800 2,064 2,864 Zhongning County 0 1,461 140 1,601 500 889 1,389 Zhongwei City 1,039 5 1,044 995 995 Subtotal 0 0 2,499 145 0 0 2,644 500 1,884 2,384 Lingwu City 4,990 232 25 5,246 1,617 1,617 Yongning City 11 1,845 1,855 902 902 Yinchuan City 0 1,107 1,107 11 11 Subtotal 4,990 11 2,951 0 232 25 8,208 0 2,530 2,530 Total Ningxia Hui Autonomous 16,628 384 9,334 145 518 1,834 28,843 1,300 6,478 7,778 Region

Grand Total 29,265 5,583 24,937 2,414 2,234 5,412 69,845 5,513 13,903 19,416 Source: TSDI.

- A.1 -

Annex A Table A.2: Demolition of Buildings (m2)

Residential Units Workshops and Administrative District House with Brick/Wood Cave Schools Total Subtotal Sheds Tile Roof Building Dwellings Xiaodian District 0 4,056 4,056 Taiyuan City Qingxu County 2,523 2,523 2,523 Subtotal 0 2,523 0 2,523 4,056 0 6,579 Yuci District 4,053 41,765 45,818 5,456 51,274 Jinzhong City Subtotal 4,053 41,765 0 45,818 5,456 0 51,274 Jiaocheng County 0 0 Wenshui County 3,623 3,623 3,623 Fenyang City 4,103 0 4,103 4,103 Luliang City Lishi County 29,228 500 29,728 6,226 3,500 39,454 Liulin County 26,673 0 26,673 26,673 Subtotal 0 63,627 500 64,127 6,226 3,500 73,853 Total Shanxi Province 4,053 107,915 500 112,468 15,738 3,500 131,706

Wupu County 0 5,523 5,523 600 6,123 Suide County 11,461 6,233 17,694 500 18,194 Zizhou County 16,778 11,013 27,791 600 28,391 Yulin City Hengshan County 4,468 5,933 10,401 470 10,871 Jingbian County 9,206 9,206 600 9,806 Dingbian County 14,589 14,589 830 1,500 16,919 Subtotal 0 56,503 28,700 85,203 3,600 1,500 90,303 Total Shaanxi Province 0 56,503 28,700 85,203 3,600 1,500 90,303

Yanchi County 9,201 9,201 9,201 Taiyangshan 0 0 0 Developing District Wuzhong City Tongxin County 0 0 0 0 Hongsipu 0 0 0 Developing District Subtotal 0 9,201 0 9,201 0 0 9,201 Zhongning County 23,030 15,747 38,776 28,477 67,253 Zhongwei City Shapotou District 498 498 498 Subtotal 23,030 16,244 0 39,274 28,477 0 67,750 Lingwu City 10,179 10,179 28,377 38,555 Yongning City 69,049 69,049 69,049 Yinchuan City Xixia District 21,830 0 21,830 21,830 Subtotal 21,830 79,227 0 101,057 28,377 0 129,433 Total Ningxia Hui Autonomous 44,859 104,672 0 149,531 56,853 0 206,384 Region

Grand Total 48,912 269,090 29,200 347,202 76,191 5,000 428,393 Source: TSDI.

- A.1 -

ANNEX B

SOCIOECONOMIC INFORMATION BY COUNTY/DISTRICT

- A.2 -

Socioeconomic Indicators by County along TZR (2004) Shanxi Province Socioeconomic Unit Taiyuan City Jinzhong City Luliang City Indicators Total Xiaodian Qingxu Yuci Jiaocheng Wenshui Fenyang Lishi Liulin Total area of land square km 271.3 609.0 1,327.0 1,822.1 1,067.0 1,179.0 1,324.0 1,288.0 8,887.4 Total year-end ten thousand 50.3 33.7 54.2 22.0 41.8 40.5 24.4 30.1 296.0 population Including: male ten thousand 25.6 17.0 27.9 11.5 21.2 25.6 12.7 15.6 151.9 Including: rural ten thousand 14.7 27.8 18.3 16.3 37.5 32.9 12.1 24.5 187.1 population Including: minority number 5,000 0 0 0 0 0 16 0 5,016 nationalities Including: people in ten thousand 0.9 0.0 0.0 5.3 0.0 1.9 5.3 7.0 13.9 poverty Number of towns number 9 9 10 10 12 12 12 15 89 Number of villages number 89 193 289 140 199 289 193 257 1,690 Number of villages in number 0 0 0 83 0 0 155 73 298 poverty Villages having no number00 0 1010005272 highway access Villages having no number 0 0 0 0 0 0 0 0 0 electricity Villages having no number 0 0 0 50 45 29 66 90 280 phone Villages facing difficulty in drinking number 0 0 28 24 45 53 23 170 343 water Area of farmland mu 205,020 436,560 683,550 188,370 600,000 640,000 367,200 521,730 3,561,765

Farmland per capita mu 0.40 1.30 1.30 0.90 1.40 1.40 1.50 1.70 1.20 Perr capita farmland mu 1.40 1.60 2.90 1.20 1.60 1.70 2.70 2.10 1.90 for rural population GDP mil yuan 5,590 5,210 5,330 1,230 1,620 3,200 1,952 4,050 271 GDP per capita yuan 11,105 15,441 9,873 5,674 3,883 8,028 7,994 10,548 9,015 Change in personal % 0.0 0.0 0.0 0.0 9.8 0.0 17.9 25.4 17.7 consumption Average annual net income of rural yuan 5,017 4,601 3,628 2,151 2,608 2,777 948 2,100 2,927 residents Average annual income of urban yuan 0 0 7,830 5,610 5,053 6,318 6,300 6,400 6,022 residents Number of number 37 20 34 15 21 20 20 20 187 hospitals/clinics Number of primary number 85 145 269 94 166 232 141 453 1,585 schools Schooling ratio of % 100.0 100.0 100.0 100.0 99.9 100.0 100.0 95.0 99.4 pre-school children Upgrading rate of % 100.0 100.0 100.0 100.0 99.8 98.8 100.0 93.4 99.0 primary schools Upgrading rate of % 85.0 100.0 100.0 53.0 59.0 32.0 99.7 49.7 72.3 senior middle schools Upgrading rate of % 98.0 61.0 96.0 57.0 45.0 24.5 45.0 28.8 56.9 junior middle schools Infant Mortality Rate % 0.1 0.1 0.1 0.2 0.3 0.1 0.1 0.7 0.4

- A.3 -

Socioeconomic Indicators by County along TZR (2004) Shaanxi Province Socioeconomic Unit Yulin City Indicators Total Wupu Suide Zizhou Hengshan Jingbian Dingbian Total area of land square km 418.5 1,853.0 2,042.0 4,333.0 5,088.0 6,290.0 20,024.5

Total year-end population ten thousand 8.3 34.5 31.0 33.4 27.7 31.7 171.3 Including: male ten thousand 4.5 18.2 15.8 17.4 14.9 16.5 89.1 Including: rural population ten thousand 6.5 30.4 27.9 30.0 24.9 26.8 146.1 Including: minority number 9 92 0 0 0 1,362 1,463 nationalities Including: people in ten thousand 2.6 7.6 11.0 8.2 15.8 8.7 45.8 poverty Number of towns number 8 20 18 18 22 25 111 Number of villages number 221 661 550 358 211 334 2333 Number of villages in number 98 297 160 100 107 158 920 poverty Villages having no number 6 11 50 0 0 56 123 highway access Villages having no number 0 0 0 0 0 32 32 electricity Villages having no phone number 132 262 200 7 56 93 750

Villages facing difficulty in number 91 120 80 100 105 334 830 drinking water

Area of farmland mu 188,746 543,900 183,344 980,000 918,080 1,551,597 4,387,667 Farmland per capita mu 2.20 1.50 0.60 3.00 3.20 4.90 2.60 Per capita farmland for mu 9.00 8.70 5.30 6.60 8.60 11.60 8.30 rural population GDP mil yuan 178 660 441 8 5,090 1,065 56 GDP per capita yuan 1,563 1,544 1,078 2,243 10,017 2,912 3,226 Change in personal % 13.5 1.4 4.0 4.0 16.9 21.9 10.3 consumption

Average annual net yuan 1,215 1,560 1,381 1,197 1,687 1,568 1,231 income of rural residents

Average annual income of yuan 989 5,675 3,000 4,900 4,930 5,000 4,082 urban residents

Number of number 30 30 10 32 26 297 425 hospitals/clinics Number of primary number 93 340 312 455 328 362 1,890 schools Schooling ratio of pre- % 100.0 100.0 100.0 95.0 99.4 99.2 98.9 school children Upgrading rate of primary % 99.1 100.0 98.0 100.0 97.8 99.6 99.1 schools Upgrading rate of senior % 98.5 82.0 90.0 90.0 85.7 96.1 90.4 middle schools Upgrading rate of junior % 33.0 52.0 80.0 31.0 72.0 41.2 51.5 middle schools Infant Mortality Rate % 0.1 0.1 0.2 0.3 0.2 0.1 0.2

- A.4 -

Socioeconomic Indicators by County along TZR (2004) Ningxia Hui Autonomous Region Socioeconomic Indicators Unit Wuzhong City Zhongwei City Yinchuan City Grand Total Total Yanchi Tongxin Hongsibao Zhongning Zhongwei Lingwu Yongning Jinfeng Total area of land square km 8,661.3 7,263.6 1,774.5 2,841.2 5,922.4 4,639.0 1,294.9 289.8 32,686.7 61,598.6

Total year-end population ten thousand 16.1 32.5 14.1 29.4 34.7 23.7 20.4 13.8 184.7 652.0 Including: male ten thousand 8.4 16.4 7.3 14.9 18.2 12.4 10.5 7.1 95.2 336.2 Including: rural population ten thousand 11.3 24.1 12.5 19.2 22.2 12.2 15.7 4.2 121.4 454.6

Including: minority nationalities number 3,691 271,418 86,634 49,424 5,966 111,600 37,406 46,768 612,907 619,386

Including: people in poverty ten thousand 5.2 12.2 2.9 4.1 3.0 2.4 0.4 30.2 89.9

Number of towns number 8104121086260 260 Number of villages number 99 221 83 134 149 76 86 28 876 4,899

Number of villages in poverty number 51 60 25 0 28 14 0 178 1,396

Villages having no highway number 32 12 14 4 0 10 0 72 267 access

Villages having no electricity number 10 28 6 2 0 0 0 46 78

Villages having no phone number 5 53 0 1 4 0 0 63 1,093

Villages facing difficulty in number 40 24 99 53 32 0 0 248 1,421 drinking water Area of farmland mu 1,350,935 2,465,047 474,000 595,467 560,998 361,471 475,502 93,296 6,376,716 14,326,148

Farmland per capita mu 8.40 7.60 3.40 2.00 1.62 1.52 2.30 0.68 3.20 7.00 Per capita farmland for rural mu 11.96 10.23 3.79 3.10 2.53 2.96 3.03 2.22 3.90 14.10 population GDP mil yuan 2,244 862 380 1,790 2,563 2,505 1,903 2,659 14,906 15,233 GDP per capita yuan 14,082 2,561 2,695 6,103 7,403 10,651 9,364 19,282 7,365 19,606 Change in personal % 0.0 0.0 0.0 8.7 4.0 5.0 0.1 0.6 consumption

Average annual net income of yuan 1,763 1,565 1,660 3,039 3,187 3,355 3,453 3,407 2,671 6,829 rural residents

Average annual income of yuan 5,600 0 5,470 6,161 6,400 9,796 7,594 6,591 16,695 urban residents

Number of hospitals/clinics number 34 20 6 83 31 55 24 9 262 874

Number of primary schools number 60 260 59 118 91 55 72 25 740 4,215

Schooling ratio of pre-school % 100.0 99.3 85.1 99.9 99.9 100.0 100.0 97.3 children Upgrading rate of primary % 100.0 99.8 85.1 99.9 100.0 100.0 100.0 97.8 schools Upgrading rate of senior % 42.0 80.0 60.5 49.0 47.0 97.1 90.0 59.3 middle schools Upgrading rate of junior middle % 54.0 0.0 39.3 37.0 64.2 43.9 30.0 34.1 schools Infant Mortality Rate % 0.3 0.0 0.2 0.1 0.2 0.4 0.0 11.8 Source: Compiled by Consultant from data provided by prefectures, counties, and districts

- A.5 -

ANNEX C

AFFECTED ENTERPRISES AND INSTITUTIONS

- A.6 -

ANNEX C: AFFECTED ENTERPRISES AND INSTITUTIONS

In October 2005, prior to the Consultant team leaving for field-work in the 22 counties and districts along the alignment, engineers from TSDI compiled a list of somewhat affected villages, schools and enterprises. The list was used to select villages for inclusion in the household and village surveys and to structure discussion, travel and visits along the alignment during the field trip.

In the course of the field trip – reviewing detailed maps and drawings of the alignment (which include structures on and in the vicinity of the alignment) with engineers from TSDI, local officials, enterprise officials and villagers, visiting villages, schools and affected enterprises, and discussing expected affects with stakeholders – information was gathered leading to the identification of affected enterprises and institutions. Additionally, it should be noted that, in a number of cases, design engineers have used different names for villages and other places than are used by local people and local officials. Sometimes this is a result of place names on maps differing from place names currently in daily use locally.

Table I-1 is the list of affected enterprises and institutions as of end of November 2005. As the alignment has not been physically fixed by redlining (driving stakes in the ground to mark the route precisely), the list is tentative, based upon information available on that date, and subject to change.

All 45 listed enterprises and institutions were provided questionnaires for completion. A total of 21 submitted responses and these have been included in the RP Report. All of the listed enterprises and institutions will have to be included in the resettlement census and information process, especially because many of the representatives are not aware of compensation policies, regulations, and standards.

- A.7 -

Table C-1: Affected Enterprises and Institutions

City, Province County Township On The Alignment

Xiaodian 1) Welfare Center of Yingze Community Taiyuan, Shanxi District 2) Wusu Charcoal Sales Station 3) Yubei Freight Yard 4) Yuci Grain Supply Center of Yuci Grain Bureau 5) Mingli Base, Key Engineering and Power Repair Division of Beijing Railway Bureau in Taiyuan section 6) Jian'an Engineering Division, Railway Fittings plant of multiple operations in Taiyuan section Jingzhong 7) Jizhong Farm Trade and Machinery Market Jingzhong, Shanxi District 8) Private Science and Technology Zone of Jizhong City 9) Some sites of enterprises are under construction 10) Quanshun Pig-breeding Plant, feedstuff plant, breeding and poultry raising station of Yuci Development Area 11) High-efficiency Planning Area of Taiyuan City 12) Taiyuan Farm and Cattle Station 13) Dongjia Fishery 14) Fire Control General Team of Taiyuan City Taiyuan, Shanxi Qingxu 15) Taiyuan Xinyuan Forage Factory 16) Wangwu Coal Cleaning Plant 17) Shanxi Provincial Zoology Garden 18) Kangfu Planting Base, Co Ltd of Jiaocheng County 19) Tuoxin Steel Casting Plant 20) Yongsheng Coal Company Jiaocheng 21) Selenium, Silicon and Magnesium Alloy Plant 22) Selenium, Silicon and Magnesium Alloy Plant of Xiying Town 23) Sanmu Agriculture Delopment Company of Jiaocheng County Luliang, Shanxi 24) Knitting factory and jointing factory of Xiying Village 25) Wenshui Coking Plant Yier Wenshui 26) Seed Plant of Wenshui County Maxi 27) Sanli Brick Plant Fenyang Xinghuacun 28) Xiaoxiangzhai Quarry Tianjiahuixiang 29) Lishi Seismic Station Wangjiagouxiang 30) Luliang Campus Area 31) Nitrogenous Fertilizer Plant Wubao Yihezheng 32) Yiwu Vermicelli Plant Suide Xindian Xiang 33) Test field of Shuibai Station Zizhou Matigou 34) Liquid Gas Station of Zizhou County County 35) Kexing Stock Raising Station of Hejuan Town 36) Prefabricate Plank Plant of Hejuan Town Yulin, Shaanxi 37) Changcheng Automobiles Repair Plant Hequan Xiang 38) Dingbian Petroleum Material Management Division 39) Dingbian Timber Market Dingbian 40) Timber processing plant of Hejuan Town Dingbian County Seat 41) Dingbian County area 42) Changqing 3rd Oil Extraction Division Hongliugou 43) Haixing Xiwang Primary School of Hongliugou 44) Petroleum Output Measure Division of Dingbian County Yinchuan, Ningxia Lingwu Guyaozi 45) Baota Group

- A.8 -

ANNEX D

RESETTLEMENT STATUS AT THE VILLAGE LEVEL

- A.9 - Annex D

RESETTLEMENT STATUS AT THE VILLAGE LEVEL

This annex presents data on resettlement impacts from the villages on the alignment as collected in November 2005 as part of the survey of 79 somewhat affected alignment villages. The data is preliminary and may be overstated.

Table D-1 presents selected responses of rural villages to questions of land, both land in current use and land anticipated to be lost to railway construction. The response rate is relatively low because of two main factors:

• redlining (physically staking the alignment) had not occurred at the time of the survey, so the exact alignment is not known; • many local government officials had little or no information about the alignment at the time of the field work and surveying.

Lacking hard information, many villages did not answer the lost land and lost house items. Some villages with little hard information made very rough estimates, while others appear to have given worst-case answers.

- D.1 - Annex D

Table D-1: Resettlement Impacts at the Village Level HH Losing % HH Losing Cultivated Land Loss City County/District Township Villages People HHs % Land Loss House House Land (mu) (mu) Qingxu Wucun 80 Wennanzhuang 2438 610 2348 Taiyuan Jiaocheng Xiajiaying 1 Jiajiazhai 2980 745 3570 2 Qiaotoucun 4172 Wenshui Xiaoyixiang 3 Xixiaci 3210 803 4 Madongcun 1256 251 2200 13.6 Fenyang Songjiazhuang 5 Zhaozhuang 683 171 1630 6 Kaishan Wuchengzhen 7 Lijiawan P 582 194 1500 8 Lijiagou P Tianjiahuixiang 9 Yiju 1030 258 1522 10 Shuangwudu P 1790 448 1809 Xishubaxiang 11 Shang'ancun 200 20.4 3920 Lishi District Wangjiagouxiang 12 Xiyadi Luliang 13 Shangshui 1.6 Fengshanxiang 14 Xiashui 1400 280 300 15 Houwangjiapo 890 223 16 Qiaojiata P 710 178 700 Jiaokouzhen 17 Hejiata P 836 209 812 18 Liangjiahui P 1568 392 596 Lijiawan 19 Wangjiahui P 2560 640 300 Qinglongcheng 20 Xuejiawan 1788 447 1600 Liulin 21 Miaowan 1216 304 27 8.2 Liulin County 22 Hechangcun 800 23 Dujiawan P 510 170 432 Xuecun 24 Jundu P 1479 370 8 21.1 1625 2.6 12.3

- D.2 - Annex D

Wupu Zhangjiayanxiang 25 Dalianpo P 437 146 1608 26 Hejiajian 401 100 824 12.1 Yihezhen 27 Beiyuanze 548 183 20 18.7 820 Suide County 28 Zhaojiapu P 720 180 2700 Man Tangchuan xiang 29 Dabaijiagou 878 220 2550 Zhangjiabian Xiang 30 Shilipu 1465 366 1063 Zizhou County Miaojiaping Xiang 31 Miaojiaping P Gao Jiagou Xiang 32 Jiaonidong 263 53 56.0 33 Yangyicun P 2300 460 2450 8.8 34 Daqiaopan P 541 108 1 0.9 890 0.2 18.0 Yang Qiaopan Town 35 Yang'ercun P 2350 470 2010 0.0 11.9 36 Shashimao P 1376 275 1 0.3 2180 0.1 17.7 37 Shapan 1520 304 14.4 38 Zhanghuochang 1878 470 42 9.9 2690 1.5 14.9 39 Hanhuochang 245 82 6 8 492 2.4 29.5 Zhang Jiapan Town 40 Zhaohuochang 1986 397 1846 6.5 Jingbian 41 Sibaishu 1280 256 50 20.2 3040 2.0 9.9 Yulin 42 Lujiashan P 2530 506 15 2.7 11200 0.1 4.0 43 Yidangwan 4120 1030 33000 44 Dongshengtan P 3200 800 8 1.1 9520 3.4 Dongkeng Town 45 Maotuancun P 1586 317 5 1.5 46 Dongkengcun 1176 235 2580 47 Xiaoqiaopan Yimincun 2148 537 2950 48 Jinjisha 2435 487 8 1.7 4020 0.1 6.9 Ningtiaoliang 49 Huanghaotangcun 1758 440 4 1 6000 0.1 7.5 Dui Ziliang 50 Baitugangzi 1795 359 4200 Shi Donggou 51 Zhaodun 2861 572 8850 Xiang 52 Zhangzhaizi 2420 605 53 Zhangfangwan 54 Caohuochang 268 Dingbian 55 Liangjuan 1296 259 Zhuanjing Town 56 Zhengjuan 877 175 57 Sunkeng 915 153 4575 58 Houchang 2238 448 Hongliugou 59 Zhangxingzhuang 596 119

- D.3 - Annex D

Wuzhong Yanchi Dashuikenggou 60 Nanwa 5 5.8 3600 0.5 8.9 61 Tiequ 2123 425 2113 Gu Chengzi 62 Panying 3235 647 63 Kongtan 2461 492 Zhongning 64 Yuding 2582 646 3122 9.6 Zhongwei Yuding Xiang 65 Huangyangwan Zhouta 66 Qiqiao Qidui 67 Shengjinguan 2700 675 2548 Zhongwei Zhen Luobao 68 Liujiaqiaotou Yinchuan Connect Line 69 Lijiaquan 2600 650 10 1.3 7800 0.1 6.4 Wutongshu 70 Shijiahao 20 2.2 10000 0.2 10.0 Lingwu Ningdong 71 Mapaoquan 1889 378 3120 2.6 Nongchang sizhan 72 Donghe Wudui 3592 898 4763 73 Xihe Sidui 3216 804 40 5 4762 0.4 8.4 Yinchuan 74 Xihe Erdui Connect Line 75 Xihe Sandui Yongning Wanghong 76 Wangquan Sansidui 77 Xianfengqidu 2078 520 2 0.4 3600 11.4 78 Gaoqu Sidui 1340 335 3002 3.4 Yinchuan Jinfeng 79 Pingjipu (Xingyuan) 3675 919 28 3.2 11.2 Total 108,556 25,020 500 6. 68 190,592 10.2 11.5 Source: Consultant's village surveys. Note: P=poverty village.

- D.4 -

ANNEX E

ESTIMATED BUDGET FOR LAND ACQUISITION AND RESETTLMENT BY PROVINCE

Annex E

Land Acquisition and Resettlement Budget for Ningxia Hui Autonomous Region Compensation Rate Total Amount of Item Total Land (mu) (CNY/mu) Compensation (CNY million) Compensation for Land Acquision: Dry Land 16,628.0 2,500 41.57 Orchards 384.5 15,000 5.77 Paddy Land 9,333.7 12,500 116.67 Vegetable Plots 145.0 12,000 1.74 Woodland 518.0 12,000 6.22 Waste Land 949.5 300 0.28 Spoil Disposal Land 884.5 300 0.27 Fruit Trees and Other Trees (20% of orchards) 1.15 Sub-total 28,843.2 173.67 New Farmland Development Cost: New Dry Land Development Cost 16,628.0 700 11.64 New Irrigated Land Development Cost 9,863.2 2,000 19.73 Cost for Vegetation Recovery 205.0 4,000 0.82 Sub-total 26,696.2 32.19 Compensation for Standing Crops: Dry Land 13,302.4 373 4.96 Orchards 384.5 1,380 0.53 Paddy Land 7,467.0 680 5.08 Vegetable Plots 145.0 2,390 0.35 Woodland 518.0 690 0.36 Sub-total 21,816.9 11.27 Compensation for Temporary Land Acquisition: Dry Land (total rate for 3 years) 1,300.0 1119 1.45 Waste Land (total rate for 3 years) 6,478.0 900 5.83 Sub-total 7,778.0 7.28 Compensation for Building Demolition (sq.m): House with Tile Roof 44,859 450 20.19 Brick/Wood Building 104,672 280 29.31 Factory Building 1,300 450 0.59 School Building 1,150 450 0.52 Appurtenances (sheds and green houses) and 55,553 200 11.11 Compensation for Movinge Expenses Sub-total 207,534 61.71 Relocation of Infrastructure and Utilities 58.27 Administrative Fee (5%) 15.61 Sub-total 360.00 Physical Contingency (5.6%) 20.16 Total 380.16

Source: NHAR Government. Notes: (1) The total does not include price contingency which is estimated separately; (2) Land acquisition does not include MOR land which is estimated at 147.5 mu in NHAR. (3) New Farmland Development Cost is a direct payment to

- E.1 - Annex E

Land Acquisition and Resettlement Budget for Shanxi Province Compensation Rate Total Amount of Item Total Land (mu) (CNY/mu) Compensation (CNY million) Compensation for Land Acquision: Dry Land 3,577.0 16,800 60.09 Orchards 1,199.0 34,000 40.77 Paddy Land 8,545.0 31,000 264.90 Vegetable Plots 360.0 32,000 11.52 Woodland 216.0 7,000 1.51 Waste Land 1,550.0 800 1.24 Fruit Trees and Other Trees (20% of orchards) 8.15 Sub-total 15,447.0 388.18 Compensation for Standing Crops: Dry Land 3,577.0 450 1.61 Orchards 1,199.0 1,400 1.68 Paddy Land 8,545.0 800 6.84 Vegetable Plots 360.0 2,500 0.90 Woodland 216.0 700 0.15 Sub-total 13,897.0 11.18 Compensation for Temporary Land Acquisition: Dry Land (total rate for 3 years) 3,894.0 3300 12.85 Waste Land (total rate for 3 years) 4,795.0 1600 7.67 Sub-total 8,689.0 20.52 Compensation for Building Demolition (sq.m) House with Tile Roof 4,053 550 2.23 Brick/Wood Building 107,915 500 53.96 Cave Dwelling 500 340 0.17 Factory Building 15,738 500 7.87 School Building 2,350 500 1.18 Appurtenances and Compensation for Moving 13.08 Expenses (20%) Sub-total (sq.m) 130,556 78.48 Relocation of Infrastructure and Utilities 15.93 Administrative Fee (5%) 25.71 Sub-total 540.00 Physical Contingency (5.6%) 30.24 Total 570.24 Source: TSDI. The budget is subject to change when Shanxi Government provides its budget. Notes: (1) The total does not include price contingency which is estimated separately; (2) Land acquisition does not include MOR land which is estimated at 164.9 mu

- E.2 - Annex E

Land Acquisition and Resettlement Budget for Shaanxi Province Compensation Rate Total Amount of Item Total Land (mu) (CNY/mu) Compensation (CNY million) Compensation for Land Acquision: Dry Land 9,060.0 13,000 117.78 Orchards 4,000.0 24,500 98.00 Paddy Land 7,058.0 20,000 141.16 Vegetable Plots 1,909.0 22,000 42.00 Woodland 1,500.0 7,000 10.50 Waste Land 2,028.0 800 1.62 Fruit Trees and Other Trees (20% of orchards) 19.60 Sub-total 25,555.0 430.66 Compensation for Standing Crops: Dry Land 9,060.0 450 4.08 Orchards 4,000.0 1,400 5.60 Paddy Land 7,058 800 5.65 Vegetable Plots 1,909.0 2,500 4.77 Woodland 1,500.0 700 1.05 Sub-total 23,527.0 21.15 Compensation for Temporary Land Acquisition: Dry Land (total rate for 3 years) 4,192.0 3,100 13.00 Waste Land (total rate for 3 years) 7,415.0 1,500 11.12 Sub-total 11,607.0 24.12 Compensation for Building Demolition (sq.m) House with Tile Roof 0.0 0.00 Brick/Wood Building 56,503.0 450 25.43 Cave Dwelling 28,700 300 8.61 Factory Building 3,600 500 1.80 School Building 1,500 500 0.75 Appurtenances and Compensation for Moving 7.32 Expenses (20%) Sub-total (sq.m) 90,303 43.90 Relocation of Infrastructure and Utilities 32.55 Administrative Fee (5%) 27.62 Sub-total 580.00 Physical Contingency (5.6%) 32.48 Total 612.48 Source: TSDI. The budget is subject to change when Shaanxi Government provides its budget. The total does not include price contingency which is estimated separately.

- E.3 -

ANNEX F

TERMS OF REFERENCE FOR EXTERNAL MONITORING

Annex F TOR FOR EXTERNAL MONITORING AND EVALUATION

The objectives of the external monitoring and evaluation are to: i) verify the internal monitoring process and reporting by executing agency (EA) ii) monitor the different stages of the project with a specific and need-based framework. These stages include resettlement and rehabilitation. iii) monitor the process in implementing resettlement plan and develop a framework for process monitoring. iv) highlight the major problems that are encountered in implementing RP and propose solutions. v) develop a profile of the new resettlement site as background information for monitoring the site's absorptive capacity. vi) verify project expenditure and the adequacy of budget. vii) establish whether, after the land acquisition and resettlement activity is completed, the welfare levels of those affected were restored and sustained; viii) if not, identify why not; ix) assess the overall efficiency, effectiveness, impact (including behavioural responses) and sustainability of the policy and practice of land acquisition and resettlement on this project; and x) deduce lessons for future railway projects in the three provinces.

Methodology and Content

The general methodology will involve a mix of one-on-one questionnaires administered to households, and participatory rapid appraisal techniques (PRA) repeated on a six-monthly or yearly basis during the resettlement and construction activities associated with the project.

The household surveys will concentrate on the changes in economic activity, incomes and other social conditions of individual households. Key indicators will include: household composition, ethnicity, education and skill levels, experience in positions of influence, pre-acquisition rights over land, size and condition of house, accumulated assets, annual income, relative mix of productive activities, marketing channels, access to utilities and services (including social services and irrigation systems), and nature and frequency of major social and cultural activities. This survey will provide a series of socio-economic indicators which can subsequently be monitored in order to evaluate the success of the resettlement and income restoration process.

In addition, the baseline survey, undertaken as soon as possible after the DMS should give the complete socioeconomic profile of sampled affected persons (APs) with gender-disaggregated data and details of losses. The baseline survey will ask questions on: • household plans to do when confronted with the impending loss of land and/or housing, • the extent and effectiveness of the dissemination of information on compensation standards and options, acquisition processes and restitution measures.

Annex F

The baseline survey will also ask an open-ended question about the farmers' anticipations and apprehensions regarding the impending land acquisition and resettlement process.

The PRA surveys will be conducted at the village level and will include similar indicators to those described above but focusing on the village as a whole. The objective is to provide a wider assessment of the effectiveness of the resettlement process than is possible from the surveys of individual households. These surveys will involve focus group discussions and key informant interviews. Experience shows that these surveys can provide a greater understanding of changes in socio-economic conditions than can be obtained from household interviews. In contrast, the household interviews are more suitable for providing a set of quantifiable indicators which can be compared over time.

Subsequent surveys will use the same format but with greater emphasis given to the changes that have occurred since the baseline survey was undertaken, the actual timing of compensation related activities (signature of contracts, disbursement of funds, identification of new housing sites, construction of new buildings, effectiveness of grievance procedures, and on general levels of satisfaction/ dissatisfaction with the resettlement process. Both household and PRA surveys will be designed to distinguish between changes that are attributable to involuntary resettlement and loss of land and those that result from external factors, e.g. a slump in vegetable prices, the opening of a new factory, etc.

The surveys will be completed by interviews with owners or directors of the non-residential establishments affected, eg. schools, enterprises.

Sampling

As required by the ADB, the baseline survey for launching monitoring and evaluation (M&E) activities should cover 10 percent of the APs. By the time the ROW is marked and the DMS commences the exact identity of the APs and the extent of their individual losses and the losses of the land owning groups will be known. At this stage, it is anticipated that around 5,000 households will be affected giving a total sample size of around 1000.

A two-stage stratified random sample should be used. The first stage sampling will involve the selection of 100 of the affected villages (approximately 1/5th). The initial selection of villages should involve those losing which will be most affected by land and property losses. This selection can be modified if it is considered that it omits any villages with particular characteristics that are significantly different from those originally selected: e.g. higher proportions of ethnic minorities, poor people, different cropping patterns or non-agricultural activity.

Around 10 households should be sampled in each selected village. The sample will be chosen randomly from the schedule of affected households obtained during the DMS. In order to improve comparability, households selected for the baseline survey will be interviewed in all subsequent surveys.

Survey Timing

The RP provides an indicative schedule of the external M&E surveys to be undertaken. The schedule has been designed to provide, as required, six investigations throughout the implementation of the project (one baseline survey, two yearly evaluation surveys, two semi- annual monitoring surveys and a post-construction evaluation survey). The household surveys would be repeated every year starting with the baseline survey implemented as soon as possible after the DMS. The PRA-type surveys would be repeated every 6 months within two year after the start of the land acquisition and resettlement. All selected villages would be visited at this time and annually when the household surveys are being carried out.

Annex F The baseline survey will establish the pre-resettlement socio-economic conditions of AP and the affected villages against which subsequent changes can be evaluated. Again, the baseline survey should give the complete socioeconomic profile of sampled affected persons (AP) with gender- disaggregated data and details of losses. The monitoring survey during the land acquisition and resettlement implementation will concentrate on the extent to which the procedures laid down in the RP have been followed, the effectiveness of these processes and the level of satisfaction/ dissatisfaction of AP with these processes.

Subsequent, yearly evaluation surveys will provide a quantification of the changes in the social and economic conditions of AP together with a more qualitative assessment of these changes and the reasons for them.

Subsequent monitoring survey will provide interim assessments of the changes taking place in the villages most affected by loss of land and/or property. Village level indicators will be collected but the emphasis will be on qualitative information.

The final post railway construction survey should take place approximately one year after the construction is completed. Its main objective is to assess whether the objectives of the RP were achieved, i.e. whether the restoration of income and welfare has been efficiently and adequately restored, and whether the land acquisition and resettlement process has been effective. This survey will also probe sample households and key informants on how the whole process might be better done next time.

Reporting and Distribution

The results of the M&E survey shall be reported to the MOR and the three Provincial Governments, the counties, townships and the ADB on an annual basis. Copies sent to the ADB should be in English.

The baseline survey should be reported in full. Subsequent reports should provide summaries of principal findings, tabulations of key indicators, qualitative and quantitative descriptions of main changes in socio- economic changes of AP and affected villages and conclusions and implications, if any, for additional action/ assistance. Semi-annual and annual progress reports on the implementation of the resettlement plan should be sent to ADB (in English) and EA (Chinese).

The report on the post-construction survey will constitute a final assessment report on the resettlement process and detail the extent to which the compensation paid and other measures have enabled the AP to maintain or enhance their pre-project social and economic living conditions.