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The World Bank Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 7167-CHA STAFF APPRAISAL REPORT CHINA Public Disclosure Authorized SHAANXI PROVINCIAL HIGHWAYPROJECT May 12, 1988 Public Disclosure Authorized Transportand Energy OperationsDivision Country DepartmentIII, Asia RegionalOffice Public Disclosure Authorized IThis document has a restricted distribution and may be used by recipients only inthe performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS (as of January 1988) Currency name = Renminbi Currency unit = Yuan (Y) = 100 Fen US$1.00 Yy 3.70 US$0.27 = Y 1.0 US$1.0 million = Y 3.7 million US$270,270 = Y 1.0 million FISCALYEAR January 1 - December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer(km) 2 0.62 mile (mi) 1 square meter (m2 ) = 10.76 square feet (ft2) 1 square kilometer (km2) = 0.4 square miles (mi ) 1 hectare (ha) = 0.01 km2 = 2.47 acIes (ac) = 15 mu 1 mu = 666.7 m = 0.0667 ha 1 kilogram (kg) = 2.2046 pounds (lbs) 1 metric ton (m ton) = 2,204 pounds (lbs) ABBREVIATIONSAND ACRONYMS CAAC - Civil Aviation Administrationof China ERR - Economic Rate of Return GJVAI - Gross output value of agricultureand industry HPDI - Highway Planning and Design Institute HSRI - Highway ScientificResearch Institute ICB - InternationalCompetitive Bidding ITC - InternationalTendering Corporation MOC - Ministry of Communications O-D - Origin-Destination pcu - pass3ngercar unit PTD - ProvincialTransport Department SAA - State Auditing Aeministration SFYP - Seventh Five-YearPlan SHAB - Shaanxi Highway AdministrationBureau SPTD - Shaanxi ProvincialTransport Department SSDI - Shaanxi Survey and Design Institute VOC - Vehicle Operating Costs vpd - Vehicle per day FOR OMCIL USE ONLY CHINA SHAANXIPROVINCIAL HIGHWAY PROJECT Table of Contents Page No. Loan and Project Summary............................................ iv I. THE TRANSPORTSECTOR A. Economic Setting ... ......................................so. 1 B. Traffic .. *.* ............... ......... .o................. .......... 1 C. Transport System ............................ ....... ...... * 2 D. Transport Issues and Objectives in the 1980s............... 4 E. Previous Bank-Financed Projects in Transport Sector ........ 5 II. SHAANXIHIGHWAY TRANSPORT SYSTEM A. Network......................... 6 B. Traffic Growth and Characteristics.......... 7 C. The Vehicle Flteet ........ 8 D . The Trucking Industryd... 8 E. Highway Admtinistrationr.ot......o..*....o...o..........O 9 F. Planning, Budgeting and Financinga......n g..&.o..........9 C. Engineering, Construction and Maintenance.ooo...... 10 H. Road Safety...................... 00.*.. 11 I. Staff Trainingr...i.nn8...... ....... 11 J. Highway Development: Objectives for the Seventh Five-Year Development Plan........ l........... 12 III. THE PROJECT A. Project Formulation and Preparation......................... 13 B. Project Objectives ......................................... *.. 13 C. Detailed Features. .... ...... ....................... 13 D. Cost E stim ...... a 4 te #*..oo4s*o......s 17 E. Finning..... a nc.......i .. e.o.o...ng. 19 F. Imlentaio....oos.*o...*noo ....... eo* .. 19 Go Procurement .......... *. .* .. ...... .......... **..O 20 H. Disbursements.............. .... *.... .... 22 I. Auditing, Reporting and Monitoring....,#................ 23 J. Environmental Effects.f..o ... ..... s..* 23 This report was prepared by B. P. Kennedy (Engineer) and S. Teravaninthorn (Economist), who appraised the project. B.P. Kennedy is the Task Manager for the Project. This document has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout WorldBank authorization. - ii - Page No. IV. ECONOMIC EVALUATtON A* vriw.................................25 B. Transport in the Existing Sanyuan-Tongchuan Corridor*...... 25 C. Traffic on the Existing Road without the Project........... 26 D. Projected Traffic on the New Sanyuan-Tongchuan Highway..... 26 E. Economic Evaluation ...................................... 27 F. Overall Evaluation and Risks............................... 28 C. Improvement and Repair of Rural Roads....................... 28 V. AGREEMENTS REACHED AND RECOMMENDATIONS......................... 31 TABLES 1.1 China: Investment in the Transport Sector..................... 32 1.2 China: Freight Traffic, 1952, 1977 and 1979-85................ 33 1.3 China: Passenger Traffic, 1952, 1977 and 1979-85 .............. 34 1.4 China: Highway Design Standards in China.*....o............... 35 1.5 China: Motor Vehicles Manufactured and Imported, 1980-85...... 36 1.6 China: Total Transport Handled by Public and Social Trucks 1978-85*... ........................oo.* ......... .......37 2.1 Shaanxi: Demographic and Transport Network Data, 1985......... 38 2.2 Shaanxi: Vehicle Fleet, 1985.................................. 39 2.3 Shaanxi: Freight Handled by Public and Social Trucks, 1985.... 40 2.4 Shaanxi: Road Manintenance Revenue and Expenditures, 1980-397.. 41 2.5 Shaanxi: Capital Construction Investment in Transport Sector 1985 .....o...* ............................... 42 3.1 Estimated Disbursement .................Schedule -... 090 ...... .*.. 43 4.1 Sanyuan-Tongchuan Road: Economic Data of its Service Area, 1985..... .. .... o.. .. 44 4.2 Traffic on the Existing Roads Without the New Sanyuan-Tongchuan Highway ............................................... 45 4.3 Projected Traffic on the New Sanyuan-Tongchuan Highway .. *..... 46 4.4 Traffic Capacity of the New Sanyuan-Tongchuan Highway in Passenger Car Equivalent Units (PCUs). .....................48 4.5 Economic Cost Conversion Factors, 1988......................... 49 4.6 Vehicle Operating Costs Summary (1988)......................... 50 4.7 Economic Rates of Return and Sensitivity Analysis.............. 51 4.8 Demographic and Transport Network Data for Shangluo and Ankang Prefectures, 1986....... ........ 52 4.9 Economic Analysis of Rural Roads............................... 53 - iii - ANNEXES 1. Terms of Reference'forShaanxi Highway Data Bank Preparation,Pavement Evaluationand StrengtheningProgram and MaintenanceManagement Study 2. Project ImplementationSchedule 3. Project MonitoringIndices 4. SelccEed Documentsand Data Available in the Project File CHARTS 1. RelationshipBetween Central and ProvincialTransport Department (IBRD 26423) 2. Organizationof the ProvincialTransport Department and the Highway AdministrationBureau (41642) MAPS 1. Shaanxi ProvincialTransport Network - IBRD 20255 2. Sanyuan-TongchuanHighway - IBRD 20268 -iv - CHINA SHAANXI PROVINCIALHIGHWAY PROJECT Loan and Project Summary Borrower: People's Republic of China Beneficiary: Shaanxi Province Amount: US$50.0 million Bank loan Terms: 20 years including5 years of grace at Bank's standard variable interest rate On-lendingRates: 4X for highway construction 7Z for rural roads ProjectObjectives and Description: The proposed new Sauyuan-Tongchuanhighway would provide urgently needed expanded capacity in the heavily developed corridor between the provincial capital, Xi'an, and the importantcoal mining and industrialcenter of Tong- chuan. Specific policy, institutionaland technological objectivesto be addressed by the project would cover the developmentof poorer rural areas by improvingthe rural road network, improved road planning,preparation of a pavement strengtheningand maintenancemanagement program and staff training. The projectwould include: (a) con- structionof a new 67-km highway between Sanyuan and Tongchuan;(b) consulting services to help train SPTD staff in the supervisionand quality control of the highway construction;(c) expansion,improvement and repair of the rural road network in southern Shaanxi; (d) preparationof a program for pavement strengthening, bettermentand maintenance;(e) assistance to SPTD in improved road planning,by preparinga computerizedRoad Data Bank; and (f) staff training. Project Benefits The principalbenefits accruing to users of the new high- and Risks: way and rural roads would be savings in vehicle operating costs and accident reduction. There are no major risk foreseen in the project. Although a section of the new highway passes through the area of archaeologicalimport- ance and could possibly delay completionof project, to minimize the risk, the Bank and SPTD agree to use force account on this section to allow more flexibilityin reschedulingconstruction work and to use resourcesmore efficientlyin the event of archaeologicalfinds. It was also agreed that a representativefrom the Archaeological Institutewould be assigned on site. Local Foreign Total Project Costs: - (US$ million) ----- Highway construction 26.9 26.6 53.5 Rural roads improvement and repair works 22.2 14.8 37.0 Consulting services and training 0.5 2.0 2.5 Equipment - 1.2 1.2 Base Cost 49.6 44.6 94.2 Physicalcontingencies 4.9 4.5 9.4 Price contingencies 2.6 2.3 4.9 Subtotal 57.1 51.4 108.5 Land acquisition 9.3 - 9.3 Total Project Costs /a 66.4 51.4 117.8 FinancingPlan: IBRD - 50.0 50.0 ProvincialGovernment 53.0 1.3 54.3 Central Government 13.5 - 13.5 Total Financing Plan 66.5 51.3 117.8 Estimated Disbursements: Bank Group FY 1989 1990 1991 1992 1993 1994 1995 t.nnual 5.0 10.0 20.0 5.0 5.0 4.0 1.0 Cumulative 5.0 15.0 35.0 40.0 45.0 49.0 50.0 Economic Rate of Return: 28Z for the Sanyian-TongchuanHighway and 16X to 25% for the rural roads. /a Import duties and taxes are not included in project costs, as the
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