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) constructionof 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 project is exempted from import duties and taxes. CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

I. THE TRANSPORTSECTOR

A. Economic Setting

1.1 A national policy emphasizingself-sufficiency and the development of heavy industry has been in place throughout the three decades followingthe foundationof the People'sRepub'ic in 1949. This policy emphasis has left China with the legacy of a "trans,,ort-intensive"economy and has createdheavy demands for transportation. These demands stem from the country'svery high volume of long-haultraffic in bulk materialsand fuels, especiallycoal. The government'srecent policy statementsrepeatedly identifytransportation and energy as the two most critical bottlenecksin the e._onomy.The government has made considerableefforts to reduce waste within the transportsystem, for example by eliminatingcross hauling of the same commodityand increasingthe processingof raw materialsbefore shipment. However, the current transport problem in China arises not only from the need for long distance shipment of coal and other raw materials,but also from the extraordinarilyrapid growth which has resulted from the accompanyingstructural reforms of China's economy in recent years. In the past China did not provide sufficientinvestment to meet the level of demand for transport in such a large country. Between 1953 and 1985, the transportsector received some Y 154 billion, or 14X of the total national investmentfor capital construction(Table 1.1). This percen- tage appears somewhat low compared to other countriesat a similar stage of development. Furtherwmre,the investmentswere made without giving due con- siderationto the most economicalmode of transport and this resulted in a rather unbalanced transportsystem. Improvingefficiency through investment in and modernizationof China's transportationinfrastructure, institutions and serviceswill continue to be a top priority in the developmentprogram for many years to come. The Government is addressing these problems and the Master Plan for China calls for the constructionof about 1.2 million km of paved road by the year 2000 indicatingthe high priority assigned to improving road transportand the substantialeconomic returns expected from road investment.

B. Traffic

1.2 Freight Traffic. Domestic freight transportedin 1986 reached 1,383 billion ton-km,a 8% increaseover 1985; this representsan average growth rate of about 8.5% p.a. since 1979, substantiallyhigher than the growth of domestic product. Conservativeprojections based on these data and expected growth in the economy as a whole indicate that domestic freight traffic could approach 3 trillion ton-km by the year 2000. The modal split has been moving toward a better balanced,with the road share of freight transport increasing from 9':in 1980 to 14% in 1986. This trend is expected to intensifywith diversificationand the continuingrapid growth of short-haultraffic. Indeed, between 1980 and 1986, the growth of road freight transportreached an average of 17% p.a., which is substantiallyhigher than the growth rate recorded by any other mode (Table 1.2). 1.3 Pas-nger Traffic. Passengertraffic reached 459 billion passenger- km (p-km) in 0986, a 7% increaseover 1985. This reflects an average annual growth rate of over 12% since 1980 (Table 1.3). Growth in passengertraffic might have been even more rapid if it had not been constrainedby the limited capacity of the transport sector to offer more passenger services. The modal split has changed more rapidly than for freight;traffic, and the roads now handle about 37% of the traffic cor.mparedto less than 10% in 1952 and 28% in 1977. Nevertheless,the mobility of the Chinese people is still much lower than that of people in countrieswith comparableincome levels. By the turn of the century, passengertraffic may well reach about 1.5 trillion p-km per year, or about three and a half times current levels.

C. TransportSystems

1.4 The railway system consists of 52,000 operationalroute-km, of which about 9,700 km are double- or multiple-trackand about 3,100 km are electri- fied. The network is served by 11,100 locomotives,291,000 freight cars and 19,600 passengercoaches. At prE&ent, 68% of tractive power is still steam, 28% diesel and 4% electric. Freight traffic density averages 15 million tons per route-km--thesecond highest freight density in the world after the Soviet Union and 50% higher than the freight density in the United States. Freight traffic reached 876 billion ton-km in 1986. Growth in freight traffic. which has averaged 7.3% p.a. since 1980, reached 8% in 1986. Three quarters of all freight traffic involves 10 commoditiesincluding coal, iron and steel, grain, timber and constructionmaterials. Despite some possible rationalizationin the transportof natural resourcesand heavy industrialoutputs, transport demand for the major commoditiesis expected to grow rapidly. Passenger traffic in 1986 was 258.7 billion p-km; this density of 4.6 million passengers per route-km ranks second in the world, after India. Although the share of rail in total traffic is decreasing,the volume of rail trafficwill continue to grow, requiringmassive investmentsin line capacity,motive power and rolling stock wall into the future. The system now absorbs about 50% of the investmentallocated to the transportsector for capital construction(Table 1.1).

1.5 The port and waterway system is composed of about 109,000km of navigable inland waterwaysand over 18,000 km of coastal lines. Domestic coastal shipping--whichoffers an alternativeto north-southrailway--has grown in recenc years but remains underdeveloped. Foreign trade shipping grew at an average of about 6% p.a. between 1979 and 1984, 22% p.a. between 1984 and 1985 and 12% p.a. between 1985 and 1986, reflectingthe economic opening up of China to foreign trade. As a result, ports have become congested. Most of the 15 major coastal ports are being renovatedor expanded,with particular emphasis on the constructionof containerand bulk terminals,the latter mainly for coal. In 1986, 22% of the investmentfor capital constructionin transportwent to this subsector(Table 1.1).

1.6 The civil aviation system consistedof about 216,765domestic route- km (and 107,575 internationalroute-km) in 1986, an over threefold increase since 1976. This network, relativelyunderdeveloped for the size of China, is served by about 400 aircraft,most of which are light or medium in size and seat fewer than 100 passengers. The network has only 97 airports,of which no more than 15 can serve the larger modern jet aircraft. It was not until the early 1980s that the civil aviation system received attention;its allocation for investmentin capital constructionreached Y 2.0 billion in 198' for the first time, after maintaininga level of Y 100 - 300 million for a long period of time. The system's share of total transport investmentincreased from about 3% in 1980 to 13% in 1985 and to about 8% in 1986 (Table 1.1). However, the present developmentemphasizes only passenger transport. Passenger trafficdensity was 67,350 passengersper route-km in 1986 compared to about 2,300 tons of freight tratfic per route-km. Despite poor facilities,the system'scapacities are utilized to the fullest extent. Since 1980 the national airline, Civil Aviation Administrationof China (CAAC),has purchased 50 large passengeraircraft such as Boeings 737, 747, 757, and 767, the Airbus, the MD-82 and the TU-154. The introductioninto service of such a large number of aircraft will place tremendouspressure on ground facilities includingrunways, terminalsand navigationcontrol. The Bank may be in a position to make useful contributionsin this area.

1.7 The highway system totalled about 962,800 km in 1986 and, although still relativelyunderdeveloped, it is the sixth largest in the world. Investmentin the highway subsectorhas been rather modest, at 16% of total investmentin the transportsector. Since the early 1980s, the network has borne an increasingshare of traffic (paras. 1.2 and 1.3). The network is, for the purposes of design and technicalspecifications, classified by the Ministry of Communications(MOC) as Expresswayand Classes I, II, III and IV for various traffic capacities(Table 1.4). Table 1.4 also shows the geometricstandards now being used. For administrativepurposes roads are classifiedas trunk, county, rural and special purpose.

1.8 The rapid growth of highway traffic stems not only from the country'srapid economic growth but also from other factors such as the national policy of shifting short-haulrail transportto road, the expansion of the service sector and rural industriesand the increasedprocessing of primarymaterials before shipping. Furthermore,with the increasingforeign trade, growth in road trafficwill be concentratedin transportco fidors serving the main ports and their hinterlandsand, with the containerizationof the higher value commodities,much of this foreign trade is expected to go by road. The new economic activitieshave generatedtraffic far in excess of what the existing facilitiescan accommodate. Congestionon roads, resulting primarilyfrom the mix of slow-movingnonmotorized and motorizedtraffic, is a seriousproblem and road pavementsare showing increasingsigns of distress.

1.9 The vehicle fleet, totaling some 4.0 million units in 1986, consists mostly of trucks, which outnumberpassenger buses by three to one and cars by nine to one. Most trucks are of four-toncapacity with outmoded designs and low fuel efficiency. Most of the trucks and buses are gasoline powered. These vehicles were manufactureddomestically and the productionof trucks has been barely sufficientto repiace the retired vehicles,let alone meat the fast growing demand. It was not until the early 1980s that a large number of modern vehicles was imported (Table 1.5) and joint-ventureswith foreign manufacturerswere started to manufacturetrucks. Productionin 1985 was about 440,000 units which, for the firs, time, exceeded the replacementdemand by 12%, assuming a ten-year life. This productioncontributed to the creation of a new fleet.

1.10 The trucking industry consists of "public trucks" operated by trucking companies affiliatedwith local (provincialor district)highway - 4 - authorities,and "social" or "own-account"trucks operated by factories,any cooperativeorganization and, recently,private individuals. The relaxation of trucking regulationsin the early 1980s allowed own-accounttrucks to haul cargo for other factoriesand cooperativesand thus promoted competition between public and own-accounttrucks. In fact, own-accounttrucks absorbed most of the traffic growth over the past few years which occurred more in the short-haultraffic (Tables 1.6). The structureof the industry is undergoing major changes spurred by the increaseddemand for road transportand market forces are playing a major importantrole in shaping the industry in future.

1.11 The administrationof the highway network in the provinces is done by the ProvincialTransport Departments (PTDs) through their Bureaus of High- ways. Administratively,the PTDs come under the jurisdictionof the provincialgovernment. The Ministry of Communication(MOC) provides general policy guidance and support to tne PTDs through its nationwide policies and regulations,specifying design and constructionstandards. MOC also provides specializedmanpower for planningand design and constructionequipment for major provincialcivil works if needed. However, the PTDs are financially independentof MOC and carry out all road planning,construction, maintenancc and administrationof roads and waterways in the provinces. Only for some large projects consideredfor national constructioninvestment in which MOC would share part of the financialburden. Chart 1 shows the organizational relationshipbetween MOC and the PTDs.

D. Transport Issues and Objectives in the 1980s

1.12 The transportsystem has been severely taxed by the pace of recent economic developments,and capacity constraintsare evident in all modes. By t..eend of the Seventh Five-YearPlan (SFYP) (1986-90),freight traffic is projectedto be 45% 'iigherand passengertraffic 60% higher than in 1985. A greater share of the increasewould fail on road transport,especially in rural areas where increasedagricultural and small scale industrial production have created an urgent demand for bett*_rfarm-to-market transport services. Road transportalso will be called upon to meet a growing share of the demand for passengertransportation from the increasinglymobile population. A formal comprehensivesector investmentplan does not yet exist, mainly because of the multiplicityof ministriesand agencies dealing with transport,the de- centralizationof responsibilitiesfor transportto the provinces,and the magnitude of the task of preparingsuch a plan in a countryas large as China. There are plans to improve the coordinationof transportplanning at central government level by strengtheningthe transportplanning function in the State PlanningCommission; this would greatly facilitatethe preparation of an overall transportinvestment plan. Meanwhile, the government,with the assistanceof the Bank Group, is concentratingon some strategicstudies and on a "transportcorridor" approach whereby the focus of investmenteffort is on removing the most blatant transportbottlenecks in what the governmenthas identifiedas high priority corridors (para 1.15). In order to facilitatethe flow of foreign trade, the top priority is given to corridorslinking ports and industrialdevelopment zones or among induitrialzones themse ves. This strategy is well integratedwith macro-economi'objectives.

1.13 Governmentpolicy for the highway subsectorin the 1980s focuses on the simultaneousimplementation of programs for road network expansionto meet the increasingdemand and for rehabilitationof existing substandardroads. - 5 -

This differs from the policy of the past 30 years which emphasizedroad length and left China with a legacy of substandardroads that cannot sustain the recent increase in traffic. The Bank Group would support the twin objectives by assistingthe process of network expansionwhile helping to direct developmentpolicy toward greater quality improvements. This support is provided within the frameworkof longer-termobjectives for improving efficiencyand cost-effectivenessin meeting the increasingtransport demand. These longer-termobjectives address specificpolicy, institutional and technologicalareas such as: improved economic evaluationtechniques for the selectionof road investments;improved intermodalplanning; efficient transport tariff, road user taxationand road financingsystem; increased capacity to relieve road congestion;improved road safety; developinga methodologyfor road pavement evaluation;increased efficiency in the road transport industry;improved efficiency in constructionthrough continued support of Government'spolicy of competitivebidding and developmentof the local contractingindustry; staff training;modernization of highway design and updating and improvementcf constructionand material specifications;and support of highway research. Some studies related to these objectivesare being carried out under ongoing projects and the Bank Group has begun discuss- ions with the Central and Provincialgovernr.ents on the potential for using sector lending as a means of achieving some of these objectives.

1.14 There is severe congestionin many segmentsof the railway network; capacity is saturatedon severalkey lines and an acute shortage of wagons exists. The delivery of energy supplies (i.e., coal) is severely con- strained. The policy is to invest in rail line electrificationand new line construction;however, it will take years to alleviatethe bottlenecksbetween major mining areas and coastal cities. For civil aviation,CAAC plans to build some 20 medium to large airports over the period 1987 to 1990 and to enlarge and rebuild about 40 small airports. Furthermore,Beijing InternationalAirport, GuangzhouBaiyun Airport, and Shanghai Hongqiao Airport will be expanded and equipped with advanced navigationequipment; when finished, capacitywould be double. For the port and waterways system, the policy is to expand substantiallyits facilitiesto relieve the growing hindrance to external trade caused by inadequateberth capacity and container handling capacity. On intermodaltransport, inadequate road and rail links between ports and hinterlandhamper the efficientturnaround of arriving cargo in a number of ports. The policy is to integratetransportation networks, in particular for coal and for import/exporttrade, container-handlingfacili- ties, intermodalfreight, and passenger transportcenters. To facilitate these developments,the Plan envisions significantinstitutional changes in the sector, includingextending the policy of separatingthe regulatory functionsof government from the operatingand financialfunctions of enterprises and delegatinggreater authority to the enterprises(recently begun in the ports subsector). Continuingadjustments in charges for transportation services are expected to assist funding of investmentsin the sector from internallygenerated resources.

E. Previous Bank-FinancedProjects in TransportSector

1.15 The Bank supports the government'sobjectives and initiativesfor developmentof the transportationsector with both financialand technical assistance. The Bank is financingtwo highway projects (Loan 2539/Credit1594 and Loan 2811/Credit1792); one involves the constructionor improvementof -6- national and rural roads, the other involves the constructionof the first expressway in one of the busiest transportcorridors in China, between Beijing, Tianjin and the new port of Xingang at Tanggu. The projects also support highway research to achieve some of the objectivesfor the highway subsectoroutlined above (para. 1.13) by: supportinghighway research, improvingthe planning of the road network expansionand maintenanceby preparinga Road Data Bank, preparinga suitablemethodology for evaluating road pavements, .eekinglow-cost solutions to road congestion,improving the collectionand analysis of traffic accident statisticsto identify the measures needed to reduce trafficaccidents and, most importantof all, identify- ing how best to finance the expansion, improvementand rehabilitationof the highway network. This work is laying a solid foundationfor the development of a sound strategy for deciding on the investmentallocations in the subsector between main highways and rural roads and among construction, upgrading,rehabilitation and maintenance.

1.16 Physical progresson the First Highway Project (Loan 2539/Credit 1594) is on schedule and work has started on four major civil works contracts recently awarded under the Beijing-Tianjin-TangguExpressway Project (Loan 2811/Credit1792). Three railway projects (Loans 2394, 2540, and 2678/Credit 1680) have assisted with the expansionof capacity on key routes and the manu- facture of electric locomotives,passenger coaches and signalingequipment. A railway operations costing system has been introducedon a pilot basis as a result of a joint Bank/Chinacollaborative effort. Four port projects (Loans 2207-CHA,2689-CHA, 2907-CHAand 2877-CHA)would finance the expansionof berths and berth handling capacity in four of the fourteenmajor ports in China, and included componentsto improveport operationsand studies focusing on intermodallinks to the hinterlandand post operatingcosting systems. In addition to these subsector-specificoperations, the Bank has recently begun to assist the governmentin the conduct of strategicstudies of a wider nature; a review of the utilizationof inland water transportwas completed and translated into Chinese for distributionand discussionamong the Chinese authorities,another study on comprehensivetransportation for Guangdong Province has been completedand a comprehensivetransport study for the greater Shanghai area includingrelevant parts of Jiangsu and Zhejiang provinces is about to start. All pcojectsare proceeding satisfactorily.

II. SHAANXIHIGHWAY TRANSPORT SYSTEM

A. Network

2.1 By the end of 1985, the transportnetwork in Shaanxi province consistedof 1,850 route-km of railways,688 km of navigable inland waterways, 25,581 route-km of civil aviationair routes, and 37,668 km of highways. The province'smajor navigableriver, the Wei River, runs west to east across the center of the province and maergeswith the Huang He (Yellow River) at the b"rder of Shaanxi, Shanxi and Henan province. Because Shaanxi is an inland p jvince with short river estuaries,prospects for developinginland waterways are rather limited; its transportdevelopment has to rely heavily on highways and railways (Table 2.1). The 37,668 km of total road network ranks ninth in the country; its network density (per land area) ranks thirteenth. However, its road network is not spatiallywell-distributed in the province;the highway network is concentratedalong the central belt of the province with - 7 -

moderate density in northern Shaanxi, but with a very low density of network in the southern Shaanxi Area. Most of the network was built in the 1960s when economic activities were slow and the roads were not designed to accommodate the rapidly increasing traffic volumes of today with their higher ratio of heavier vehicles. Of the 37,668 km of road at the end of 1986, there were no roads of Class I standard, only 496 km (1.3%) of Class II, and 7,186 km (19.1%) of Class III standard. The Xi'an-Sanyuan Highway (34 km) being financed under China's first Highway Project (Ln. 2359-CHA/Cr. 1594-CHA), and its continuation from Sanyuan to Tongchuan (67 km), which is proposed for financing under this project, would provide the first 86 km length of Class I roads in Shaanxi province and expand the Class II road system to 511 km. About 36% of the network (13,580 km) has asphaltic concrete or bituminous pavement for a surface, and less than 50% of the network (18,377 km) consists of all-weather roads. The technical classification of the network according to its condition is shown below:

ROAD NETWORK IN SHAANXI PROVINCE (1986)

Classi- Length % of total fication (km) network Pavement standard Quality

Class I 0 0 -

Class II 496 1.3 Cement concrete, All-weather road Bituminous penetra- (only 50 km tion macadam concrete roads)

Class III 7,186 19.1 Bituminous-coated All-weather road macadam

Class IV 20,675 54.9 Bituminous-lime 5,900 km paved treatment or road, 10,695 km gravel surface all weather roads, and the rest impassable after heavy rain

Unclassified 9,311 24.7 Improved earth Impassable after surface rain

Total 37,668 100.0

B. Traffic Growth and Characteristics

2.2 Between 1980 and 1985, road freight and passenger traffic in Shaanxi province grew at about 14Z and 18% per annum, respectively. These growth rates on highways were significantly higher than the growth rates on railways-- 9Z and liZ, for freight and passenger traffic (see table below). - 8 -

TRAFFIC GROWTH IN SHAANXI PROVINCE (1978-1985)

Freight traffic Passenger traffic (million ton-km) (million passenger-km) Highways Railways Highways Railways

1978 1,039 16,558 1,295 4,756 1980 1,054 17,957 1,623 6,288 1985 1,994 28,184 3,756 10,666 p.a. growth rates (1980- 1985) 13.6 9.4 18.3 11.2

Although the modal split has relied heavily on railways, especiallyfor freight traffic, the share of highways graduallyhas increasedin recent years. On some major transportcorridors in the province such as from Xian to Lingtong,Xian to Xianyang,and the project corridor road from Xian to Tongchuan, the growth rate for road freight traffic between 1980 and 1985 was about 18%.

2.3 In 1978, Shaanxi, like other provinces in China, set up a thorough traffic counting system for part of its major trunk roads. The counts,which includenonmotorized vehicles, are made on a 24-hour basis and, dependingon how heavily traffickedthe route, the counts are made either three times a month or every day. However, this intensiveand routine counting system *s seldom augmentedwith origin-destinationsurveys which would be useful for obtainingmore accurate informationon traffic flows for highway planning and design.

C. The Vehicle Fleet

2.4 The vehicle fleet in Shaanxi is relativelysmall when measured in terms of number of trucks per km of road network and number of buses per thousand residents. The truck fleet is about 30% smaller than the average for the country,whereas the bus fleet is about average (Table 2.2). Although the number of social trucks has increasedrapidly in recent years, the supply of trucks is still unable to satisfy the growing demand. Some of the excess demand for short-haultransport thereforehas been met through the use of farm tractors. Although this provides a temporarysolution to the truck shortage, the use of tractors on the roads impedes faster-movingtraffic and creates congestion. MOC are seeking low-cost solutionsfor this congestionthrough a study being carried out under the first Highway Project, Loan 2394-CHA/Credit 1594-CHA (para. 1.13).

D. The Trucking Industry

2.5 Competitionbetween public and social trucks in Shaanxiprovince has increasedin recent years. There is one public trucking companydirectly under the provincialtransport department and at least one public trucking company in each county and township;the latter report directly to the county transport bureaus concerhed. The official trucking tariff ranges from Y 0.18- 0.20 per ton-km, dependingon the type of commodity being hauled and the road condition. With this regulatedtariff, the public truckingcompanies have not dope well financiallyand were unable to expand their business to meet the rapidly increasingdemand; however, the expansion of own-account/socialtruck- ing companies indicatesthat the regulated tariff providesadequate profit. The public trucking companieshave problems of operationalefficiency caused by high management and overhead costs, many old, inefficientgasoline-powered trucks, and the state regulatoryrequirements which give priority to hauling certain kinds of nonprofitablecommodities such as coal. In general, the average hauling distance of public trucks is longer than that of social trucks (Table 2.3).

2.6 Although rapid economic growth and the relaxationof trucking regulations(para. 1.10) are revitalizingthe industryand making it more responsive to market demands, there are still severalareas that could be improved to make the industrymore efficient. The introductionof trucks of appropriatesize with modern designs and energy-efficientengines should be accelerated. Modern truck fleet managementtechniques are urgently needed. The responsivenessto market demand is expected to continueto spur efficiency gains in the trucking industry;there are signs that the problemsoutlined above are being addressed.

E. Highway Administration

2.7 Chart 2 shows the organizationof the Shaanxi ProvincialTransport Department (SPTD) and the Shaanxi Highway AdministrationBureau (SHAB)--oneof its ten bureaus, institutesand corporations. The SPTD reportsdirectly to the provincialgovernment and acts as the administrativearm of the provincial government for planning,budgeting and financingof the transportsector in the province. However, the SPTD conforms to the professional,techrnical and general transportpolicy guidancesissued by MOC. Similarly,administratively the SHAB reports directly to SPTD but receives professionaland technical guidaace from the Highway Bureau of MOC. The organizationof SPTD and SHAB are sound and has adequateand competentstaff to carry out its functions although training is needed in certain areas (para. 2.15). The main function of the SHAB is to constructand maintain all national and provincialroads in the province. It has direct control over 10 PrefecturalHighway Bureaus,98 County,Highwaydivisions (one division per county), and about 930 road maintenance teams. On average, there is one road maintenancegroup for every approximately10 km of classifiedroad network.

F. Planning,Budgeting and Financing

2.8 Planning. The SPTD has overall responsibilityfor planningall road investmentsand for maintainingthe highway network in the province. However, the prefecture,county and village level highway administrationunits have considerableautonomy in planning smaller road investmentswhich, as a formality,are subject to the approval of the SPTD. There are three levels of administrationfor the road network in Shaanxi province: (a) SPTD administers 9,722 km of provincialand trunk roads and a small number of importantcounty roads; (b) county highway bureausadminister the county and rural roads; and (c) village highway units administer the village roads. The three administra- - 10 - tion groups prepare investmentplans for the highway networkunder their jurisdictionand submit their plans to the planning division of SPTD by Septemberof each year for the next year's plan. Before the end of N,vember, SPTD approves the next year's plan for each county or local authority concerned. Similarly,the five-yearroad developmlentplan (paras. 2.17 - 2.18) is prepared by SPTD using inputs from lower level administrativegroups revised to conform to national or provincialguidelines for developmentpolicy during the plan period. To improvethe planning of the development, construction,rehabilitation and maintenanceof the provincialroad network, a start would be made under the proposed project in the preparationof a computerizedroad management informationsystem or road data bank as well as in the preparationof road pavement strengtheningand maintenancemanagement programs.

2.9 Budgeting. As in almost all sectors in China, the SPTD planning division always adopts a balanced-budgetpolicy. The proposedhighway investment is always balanced against the revenue earmarked for highway development, i.e., the amount of investmentapproved for each year is closely related to the amount of road maintenancerevenue expected for the same year. In October of each year and before SPTD approvesnext year's projects,the current year's planned investmentsare reviewed against actual investmentsand revenue receipts,and adjustmentsare made where needed.

2.10 Financing. Since 1985, state regulation has allowed the use of up to 25% of road maintenancerevenues for new road construction. However, in order to ensure that adequate funds were available for maintenance,the road maintenancefee was increased. The SPTD determinesthe fee to be collected from different types of vehicles in the province;and through the provincial governmentit reports to the State Council for approval before the fee is made effective. At present, the road maintenancefee in Shaanxi province amounts to 14.52 of total revenue for public trucks and Y 104 per month per one payload ton for social trucks. (The road i-aintenancefee for farm tractors is collectedby local authorities,not by SPTD, at Y 40 per ton per month.) Of total road maintenanceexpenditures, some 51% was for new road construction and upgrading, 14% was for periodic maintenance,and 11% for routine maintenance. About 24% was expended on administrationand overhead. Table 2.4 shows the road maintenancerevenue and expenditurein Shaanxi province between 1980 and 1987.

G. Engineering,Construction and Maintenance

2.11 Road and bridge projects are engineeredby the planning and design institutesat the provincial,prefecture and county levels. As in the case of the proposed road project,major road projectsare designed by the Shaanxi Planning, S'wrveyand Design Institute(SPSDI) in Xi'an assisted by the MOC's Highway Planningand Design Institute(HPDI) and the MOC's First Survey and Design Instituteat Xi'an. Bridge and tunnel designs are also made by the SPSDI with assistancewhere needed from the MOC First or Second Survey and Design Institute,the Railway Design Institutes,or other specializeddesign institutes. At SPC's request, the MOC's HPDI will assist in economic evaluation; this is now becoming routine for major road and bridge investments. The MOC's Highway ScientificResearch Institute(HSRI) is availableto advise on any geotechnicalor constructionmaterial problems. Fnreign consultantshave not been used for highway design ii Shaanxi since the local institutesare - 11 -

professionallycompetent and have adequate manpower for the work. However, since contracting,particularly contracting for civil works through international competitivebidding (ICB), is still relativelynew in Shaanxi, some foreign consultantswere used to assist in preparingbid documentsand organizingconstruction supervision for the Xian-Sanyuanhighway being constructedunder Loan 2539-CHA/Credit1594-CHA. These consultantswould be needed for similar services on this project.

2.12 In the past, road and bridge constructionnormally has been done as a force account operationby constructionbureaus attached to the provincial, prefectureor country governments. Since the State PlanningCommission directed that all major civil works be awarded after competitivebidding, a domestic contractingindustry has been growing rapidly. Many of the larger provincial constructionbureaus are being reorganizedinto financially independentcontracting companies. As such, they are expected to apply for prequalification,either individuallyor as joint ventureswith foreign contractors,to bid on the road and bridge contractsto be financed under the project.

2.13 The national and provincialroads are well maintainedby the SPTD but maintenancecosts are rising rapidly. Maintenancecosts for asphalt paved roads presentlyrange between Y 3,000 and Y 3,500 per kilometer,due to the poor quality of the roads and the recent, rapid increasein traffic. Mainte- nance of the county roads is effectivelyorganized and carried out, with assigned groups of maintenancecrew throughoutthe province looking after roads, mainly through labor-intensiveoperations. Under the project both periodic and routine maintenanceplanning and operationswould be improved by the setting up of the road data bank and the preparationof a pavement strengtheningand maintenancemanagement program.

H. Road Safety

2.14 Although statisticson road traffic accidentsare neither comprehen- sive nor reliable,it is evident that the situationregarding road safety is far from satisfactoryin Shaanxi province. The poor quality and low geometric standardsof most roads combinedwith the mix of slow and fast moving traffic are not conducive to road safety. Under the first Highway Project, the Bank is supportingthe HSRI's research program,which includesa study on road safety. This study covers: (a) a review of the existing system of reporting, recordingand analyzing road accident statistics;(b) recommendationson improved data collection,recording and analysis of road traffic accidents; and (c) identificationof a program for reducing road trafficaccidents. The final report on the study is now availableand the findings of the HSRI's Research Study are being discussedwith the Bank. Agreementwas reached that Shaanxi Provincewould prepare and analyze the availableroad accident data, using the HSRI computer program and prepare recommendationfor reducing road accident; the analysis and recommendationswould be sent to the Bank for review by December 31, 1990.

I. Staff Training

2.15 Employeesof the provincialand county PTDs are generallycompetent, but many have not been exposed to new technologyand thereforeoften use outmoded work methods and equipment. Followingthe difficultperiod of the - 12 - late 1960s and early 1970s, technicalmanpower planning and assessment of related trainingneeds for the provincialhighway subsectorhave only recently been resumed. The SPTD is in the process of preparinga manpower plan. Strengtheningand expanding formal educationand ongoing training programs to upgrade and increase the number of technicalstaff is expected to be needed in order to meet the demand for trained personnel. Meanwhile, some urgently needed traininghas been identifiedand will be supportedunder the proposed project (paras.3.12 and 3.13).

J. Highway Development: Objectives for the Seventh Five-Year DevelopmentPlan

2.16 Shaanxi province has had a relativelysmall investmentprogram in the transportsector. Compared with Shandong province,Shaanxi province is 26Z larger in total land area but expends only 15% of the total investmentfor capital construction(Table 2.5). This has contributedto the lack of transportationinfrastructure which is a major bottleneckto the development of the provincialeconomy. However, the share of investmentin Shaanxi province has been more equally distributedamong each mode of transportthan in Shandong province. For example, Shaanxi'sinvestment in railways has been only 2.3 times higher than its investmentin highways,compared to 12 times higher in the case of Shandong province.

2.17 The policy objectivesof Shaanxi ProvincialTransport Department (SPTD) in the highway subsectorduring the Seventh Five-YearPlan closely follow the objectivesset forth in the national plan (paras. 1.12-1.13). Road network capacity would be expanded simultaneouslyin the corridorsleading to major industrialand mining areas and in poor rural areas. By 1990, 3,000 km of new roads would be completedand 12,500 km of roads would be upgraded. Of the latter,about 1,000 km would be paved. During the Plan period five major highway projects would be constructed: (a) Xi'an-Lingtong,(b) Xi'an- Xingping, (c) Xi'an-Tongchuan,(d) a railway feeder road system in northern Shaanxi, and (e) a rural road developmentprogram in southern Shaanxi.

2.18 The 23.8-km Xi'an-Lingtongstretch of road would be the first expresswayin the province. The 59-km Xi'an-Xingpingstretch would be a Class I highway. The Xi'an-Tongchuanroad would be a 100 km Class I highway. The Bank is financinga 34 km length of this highway under the first highway project (Loan 2539-CHA/Credit1594-CHA); the remaining67 km would be financed under the proposed project. The Xi'an-Tongchuanhighway would be the first full standard Class I road in the province. The railway feeder road system would be located in the northern Shaanxi coal mining area. The rural road developmentprogram, intended for the poorer southern Shaanxi area, would be financedunder the proposed project. In addition to the road network expansion,the existing paved roads would be strengthenedand improved,and the managementof the highway system would be modernizedthrough the introductionof improved road planning,computerized design, improved specifications for constructionmaterials and constructionmethods, modern contracting and supervisionprocedures, improved paved road maintenancemanagement systems, and training of provincialstaff in a variety of civil engineering fields, financialaccounting and cost control, and equipmentmanagement and maintenance. The Bank is discussingwith the Central and Shaanxi provincial governmentsthe potential for using sector lending to the province as a more effectivemeans of achievingthe objectivesin the subsector. - 13 -

III. THE PROJECT

A. Project Formulationand Preparation

3.1 The main objectives for highway developmentin China in the 1980s are to provide adequate capacity in the heavily congestedcorridors, to upgrade and improve the existing network, and to expand the network in remote rural areas. The proposed Sanyuan-Tongchuanhighway in Shaanxi province is part of the plan for investingin high standard roads. It would be a continuationof the Xi'an-Sanyuanhighway being financed under Loan 2539- CHA/Credit 1594-CHA,the first highway project in China. The rural road developmentin Shaannan (southernShaanxi Province),the poorest part of the province, serves the objectiveof expanding the rural road network to help the rural poor. The project was prepared by SPTD through the ProvincialSurvey and Design Institute,with the assistanceof the MOC's First Survey and Design Institutein Xi'an for the feasibilitystudy and detailed design.

B. ProjectObjectives

3.2 The proposed Sanyuan-Tongchuanhighway would contribute to the urgently needed expansionof capacity in the heavily developed corridor between the provincialcapital, Xi'an, and the importantcoal mining and industrialcenter of Tongchuan. Specific policy, institutionaland technologicalobjectives to be addressedby the project would include:

(a) the introductionof improved road planning techniquesthrough preparationof a computerizedRoad Data Bank;

(b) the introductionof technologyto evaluateexisting paved roads and to prepare a pavement strengtheningand maintenancemanagement program;

(d) continuedassistance to modernizedesign, construction,and materials specificationsand contract documentation;

(e) support for the provincialgovernment's objective of promoting economic developmentin the poorer rural areas; and

(f) road safety.

C. Detailed Features

3.3 To accomplish these objectives,the project would include:

(a) constructionof a new 67-km highway (about 51 km of Class 1 and 16 km of Class II) connectingSanyuan with the city of Tongchuan;

(b) consultingservices to help train SPTD staff in the supervisionand quality control of the highway construction; - 14 -

(d) evaluationof the existing road pavements to prepare a program for road strengthening,betterment and maintenance;

(e) assistanceto SPTD in improved road planning,including the establishmentof a computerizedRoad Data Bank; and

(f) staff training.

3.4 Constructionof the Sanyuan-TongchuanHighway. The existing road, National Road 210, is the major road connectingthe fertile grain- and cotton- producing central Shaanxi plain with Tongchuan,a major mining and industrial center for the productionof coal, cement and constructionmaterials. The area is served by a comprehensivenetwork of railwaysand low standardroads. Freight volume on the highways in the area reached 9.7 million tons in 1985 and passenger volume reached 3.2 million. On National Road 210 between Sanyuan and Tongchuan, the freight volumed was 4.6 million tons and passenger volume was 3.3 million. By 1990, Tongchuanwill be producingabout 15 million tons of coal and 3.5 million tons of cement. Since the possibilitiesfor further expandingrail capacityare lir:ited,large volumes of freight and passengerswill have to move by road. Already in 1985, traffic on the existing road had reached 4,110 vehicles per day, far exceedingcapacity. Conges- tion on the road is a serious problem; the accident rate, already high, is rising rapidly and road pavementsare deterioratingand in need of costly maintenance.

3.5 A new 66.8 km highway would be built to a four-lanedivided Class I standard between Xinzhuangand Chuankou (51.3 km) and to a two-lane Class II standard from Chuankou to Houliu (15.5 km), just north of Tongchuancity. This new highwaywould replace the existing 73.2 km road and would be an extensionof the new 34-km Class I highway from Xi'an to Sanyuan (Xinzhuang) being built under the first Highway Project. When both roads are completed, the new road connectionbetween Xi'an and Tongchuanwill be 23 km shorter than the existing road and 58 km shorter than the railway link. The new alignment passes through an area changing fom the alluvial plain through the hilly and rolling terrain of the terraces to the northern loess plateau. The first 32 km to Yaoxian passes through flat and open terrain and mesas and the remaining 34.8 km passes through hilly terrainwith narrow valleys. The soil type is loess, with good permeability. The climate is temperateand has an annual mean temperatureof 13°C. Annual rainfall is between 500 mm and 550 mm and the water table is quite deep. The earthquake intensityis 8, and the area is considereda heavy earthquakedamage zone for highways, for structural design purposes. The road would serve only motorizedtraffic, and would have eight major bridges, six grade-separatedintersections with railways,arterial and other main roads--threeof which would be interchanges. The old road would be used for slow moving non-motorizedtraffic.

3.6 The preliminaryengineering and feasibilitystudy for the expressway was satisfactorilycompleted by SPTD and has been reviewed by the Bank. The detailed design was prepared by the Shaanxi ProvincialSurvey and Design - 15 -

Institute in Xi'an. The geometricdesign standardsfor the highway are appropriate;they are shown in Table 1.4.

3.7 Supervisionof Construction. Since contractingfor civil works is a relativelynew procedurein China, the country has little experience in super- vising road constructioncontracts. SPTD engineersreceived some training in supervisorywork under the first Highway Project, but there is still a shortage of experiencedlocal engineers. To ensure that works on the highway are carried out in full compliancewith specificationsand that good quality control is exercisedon site, a team of engineers from SPTD and experienced foreign consultantswould be set up to supervisethe works. The consultants would help establishthe systems ar.dprocedures for the supervisorywork and train the SPTD engineers,both formally and on-the-job,to carry out the supervisionof construction. Terms of referencefor the consultingservices (Annex 1) were agreed at negotiations.

Rural Roads

3.8 Improvement. Shangluoand Ankang Prefecturesin southern Shaanxi province contain some of the poorest areas in the province;per capita income there is as low as Y 164 p.a. The lack of roads in these prefecturesis a serious impedimentto economic growth, since there are no alternativemodes of transport. SPTD has prepared a program for expandingand rehabilitatingthe network in the area. This program includes the following:

(a) constructionand rehabilitationof about 295 km of rural roads;

(b) constructionof about 1,013 linear meters of large or medium bridges; and

3.9 EmergencyFlood Repair. The problems associatedwith the lack of roads in Shangluo prefecturewere compoundedby the heavy rains and floods which severely damaged the few existing roads and bridges during August and Septemberof 1986. The two most severelydamaged roads extend from Zehe to Manchuan and from Shangxianto Shagao. As a result of this damage, about 174 km of rural roads needs to be repaired,rebuilt or rehabilitated,all to Class III standard. The Zehe to Manchuan road requiresabout 254 linear meters of new bridgework;and the ShangxiantoShagao road requires about 324 linear meters of bridgework. The Zehe-Manchuanroad (73 km) originallyextends from the Shanyang county seat to the southern border of Shaanxi to connecc with Hubei province and serves 23 counties and villages with about 93,000 residents. The influencearea of this road includes fertile agricultureland which produced 13,700 tons of food grains in 1987. Furthermore,the area has abundant forests, produces tung oil and has animal husbandry. The Shangxian- Shagao road (101 km) extends from the Zhen'an county seat and passes the Zhashui county seat to Shagao and serves 111 counties and villages with 72,500 residents. The road connects with National road 210 leading to Xian. Its influencearea covers 2,440 sq km, produces food grains and includes significant area of tea plantation. Cottage industriesate relativelywell developed in this area. After the flood damage, the transpor.of productshas been a major problem. The total estimated cost for repairing the two roads is about Y 45.0 million, or US$12.2 million. The SPTD has asked the Bank Group to help - 16 - in implementingan emergencyrepair and rehabilitationprogram. It was agreed with the SPTD that work would start immediatelyafter the rehabilitation program was defined and agreed at appraisaland that retroactivefinancing in an amount of about US$5.0 million equivalentwould be provided under the project.

3.10 Evaluationof Existing Road Pavementsand Preparationof a Strengtheningand MaintenanceManagement Program. The recent large increases in road traffic have created problems pertaining to the structuralsoundness of existing road pavements. Most of these roads were designed in the 1950s, 1960s and early 1970s for a much lower level of traffic. The pavementshave now exceeded their design life and are showing signs of distress,and pavement maintenancecosts are rising rapidly. These road pavementsare urgently in need of strengtheningbefore they are damaged beyond repair and require complete and costly reconstruction, The SPTD proposes to use part of the proceeds of the Bank loan to carry out an evaluationof the existing road pavements in orler to determine their bearing capacity and residual life in relation to present and estimated future traffic. A five-year strengthening and paved road maintenancemanagement program would be prepared to identify the resources of manpower,materials, equinment and funds needed to implement the program. The project wculd provide expertiseand equipmentto use in training SPTD staff in the methodologyof pavement evaluation. The terms 3f referencefor the road pavement evaluationand strengtheningand maintenance management program are shown in Annex 2, and were agreed at negotiations.

3.11 Road Planning. The basic data needed for the planning,development, design, constructionand maintenanceof the road system is not available in a readily accessibleformat in Shaanxi province. Under the project, a start would be made in setting up a computerizedroad data bank. The data bank would include a road condition inventorycomprising road l9ngths, type, classification,function, geometrics, and pavement type, thicknessand bearing capacity,as well as traffic volumes, material sources and quantities,etc. In developing the data system, SPTD wold receive expert help and computer hardware and software. Terms of Referencefor starting up the data collection for the road data bank are shown in Anlaex2 and were agreed at negotiations.

3.12 Staff Training. In addition to training directly related to the supervisionof constructionand evaluationof road pavements, the proposed training program is designed to upgrade and modernize the skills of technical staff in the various fields concernedwith the highway subsector. This training program essentiallywould representa continuationof the training program initiatedunder the first Highway Project. The program has a twofold approach,to:

(a) improve the proficiencyof engineersand other staff by sending selected personnelabroad to attend academic and practicaltraining courses es well as relevant internationalconferences; and

(b) strengthenthe capacity of the SPTD highway institutesand technical schoolsby:

(i) purchasinglaboratory, computer and photogrammetryequipment, training aids, and essentialtechnical books and publications; and - 17 -

(ii) inviting foreign academic experts for short visits to help upgrade curricula.

3.13 In continuing the program, about ten officials from the SPTD and highway bureauswould be trained abroad. This training would cover the areas of transportationplanning, soils and materialsengineering, transport economics,financial management and accounting,highway maintenanceand equipmentmanagement, construction management and supervisionincluding quality control,new constructicnmaterial technology,and technical interpretation. It is expected that, on their return, the trainees would play a major role in developingand managing the Shaanxi road system and in transferingupdated technologyto other highway staff. During negotiacions agreementwas reached with the provincialgovernment on the implementation schedule for the training program.

3.14 ConsultingServices. A total of about 48 man-monthsof foreign consultingexpertise and 1,200 man-monthsof local supervisionengineer are expected to be needed under the proposed project. Local expertiseavailable in the various institutesin the sector would be used as much as possible,and foreign consultinghelp would only be sought for those areas of advanced technologywhere local expertise is lacking. These areas include the use of advanced instrumentationfor measuring road deflectionand deterioration,the analysis of traffic flows, transporteconomics and other very specialized fields. Constructionof the highway would be supervisedby a team of local staff and experiencedforeign consultants. About 9 man-yearsof foreign consulting expertiseis expected to be needed to help set up and implementthe organizationalsystems and proceduresfor on-site quality control and to train the MOC engineers in supervision. About 15 man-monthsof foreign consulting expertise is expected to be needed for preparingthe road data bank and evaluatingthe existing road pavements.

D. Cost Estimates

3.15 The total project cost is estimatedat about Y 460.67 million, or US$117.9 million equivalent,includ ng physical and price contingenciesand land acquisitioncosts. This includesa foreign exchange componentof US$51.4 million, or about 44% of the total cost. The project costs are shown below. All base costs are estimated in January 1988 prices. Physical contingencies are calculatedat 10% of base cost estimatesand applied to all components. Price contingencieshave been calculated for foreign and local costs. When expressedin US dollars, the escalationfor foreign and local costs is based on expected internationalannual price escalationfactors of 3% from 1988 to 1990, and 4.0% thereafter. When expressed in Yuan, the escala- tion is based on expected domestic price escalationfactors of 8.0% in 1988, 7.0% in 1989 and 6.5% thereafter. None of the cost estimates include taxes and duties since all materialsand equipmentto be used in the project would be exempt from taxes and duties. - 18 -

PROJECT COST SUMMARY

Foreign Local Foreign Total Local Foreign Total cost (X) ---- (Y million) ------(USS million) -----

Sanyuan-Tongchuanhighway Contract construction(49 km) 69.56 78.44 148.00 18.80 21.20 40.00 53.0 Force account (18 km) 30.00 20.00 50.00 8.10 5.40 13.50 40.0 Subtotal 99.56 98.44 198.00 26.90 26.60 53.50 50.0 Consultantservice for supervision 1.76 1.76 3.52 0.48 0.48 0.96 50.0 Equipmentand expertisefor road data bank 0.00 4.44 4.44 0.00 1.20 1.20 100.0 Equipmentand expertisefor road paved evaluation 0.00 1.00 1.00 0.00 0.28 0.28 100.0 Rural roads Emergencyprogram to repair flood damage 27.00 18.00 45.00 7.30 4.87 12.17 40.0 Improvement 55.20 36.80 92.00 14.93 9.94 24.87 40.0 Training Staff 0.00 1.48 1.48 0.00 0.40 0.40 100.0 Equipment,etc. 0.00 3.00 3.00 0.00 0.82 0.82 100.0 Base Cost 183.52 164.92 348.44 49.61 44.59 94.20 47.3 Physicalcontingencies (10%) 18.35 16.49 34.84 4.96 4.46 9.42 47.3 Price contingencies 22.55 20.29 42.84 2.58 2.32 4.90 47.3 Subtotal 224.42 201.70 426.12 57.15 51.37 108.52 47.3 Land acquisitioncost 34.55 0.00 34.55 9.34 0.00 9.34 Total ProjectCost 258.97 201.70 460.67 66.49 51.37 117.86 44.0

Notes: (1) Exchangerate: US$1 = Y 3.70. (2) All figures are rounded. 3.16 The costs of civil works are based on work quantitiescalculated from detailed designs and costed at unit prices. The unit prices for the work items were computed based on MOC's standardmanuals for labor and equipment productivityand the related,annually-updated costs combined with the current costs of materials. The unit prices were checked against the unit prices recently received in bids for major road works financedunder the first and second Highway Projects.

3.17 The base cost per kilometerof the dual four-lanesection of the new highway, excludingcontingencies and land acquisitioncosts, is just under US$1.0 million. The cost per kilometerof the two-lanesection of the highway is about US$0.5 million. Both of these costs are acceptable. The foreign - 19 - exchange component is estimatedat about 53Z for foreigncontractors and about 40% for domestic force account work.

3.18 The cost of equipment is based on prices quoted by manufacturers outside China. Cost estimatesfor the highway maintenance,operation and monitoring equipmentare based on manufactuerer'scurrent prices. The list of equipmentto be financed under the project was agreed at negotiation.

E-, Financing

3.19 The Bank loan of US$50.0 million would finance about 49% of the cost of the project. The loan would be on-lent to Shaanxi Provinceunder the Borrower'scurrent proceduresfor on-lending to province for highway construction. Under this project, an interestof 4% will be charged for amounts on-lent for highway constructionand 7% for rural roads. The Central and ProvincialGovernment would provide about US$61.0million to cover the remainingcapital costs of the project. The financingplan for the of project is shown in the table below:

FINANCINGPLAN

Provincial Central Government Government Bank Group Total ------(US$ million) ------

Constructionof the San Yuan TongchuanHighway 13.81 11.73 27.96 53.50 Rural roads 25.73 - 11.31 37.04 Supervision 0.48 - 0.48 0.96 Equipment - - 0.28 0.28 Road data bank - - 1.20 1.20 Training - - 1.22 1.22 Contingencies 4.99 1.78 7.55 14.32 Land acquisition costs 9.34 - - 9.34

Total 54.35 13.51 50.00 117.86

F. Implementation

3.20 SPTD would have overall responsibilityfor implementingall componentsof the project. The highway would be constructedunder unit-priced contracts for civil works. The detailed design and the bid documentsare now being completedby the ProvincialSurvey and Design Institute. Prequali- fication of contractorswould begin in April 1988. The proceduresfor acquiringland for the right-of-wayalready have started; the ground surveys have been completedand agreementswith the llages and productionunits will be finalizedbefore the start of construction. Constructionof the highway is - 20 - expected to begin in early 1989 and be completedby the end of 1991. The works would be supervisedby a joint SPTD/consultingteam of engineers.

3.21 The SPTD would carry out the Rural Roads Improvementand Emergency Flood Repair Program through the provincialand county constructionteams who have adequate resourcesof equipmentand staff for this work and who have extensiveexperience in tl.esekinds of constructionor improvementworks. The constructionteams have startedwork on the emergency flood repair; this work should be completed by end 1991. Improvementwork on rural roads would start in early 1989 and be completedby end 1992. SPTD would also be responsible for implementingthe road pavement evaluation,preparing the pavement strengtheningand maintenancemanagement program through its Bureau of Highways,and implementingt' training componentin accordancewith a program acceptable to the Bank Group. The road pavementevaluation would start in mid-1989 and be completedby 1990, when the program for road pavement strengtheningwould be reviewed with the C.!Group. Training would start in January 1989 and continue through the remani-igproject period. The SPTD would be responsiblefor preparationof t-aer-lad data bank; this work would be coordinatedby MOC's Highway Planningand Dbeign Institutewhich has been assigned overall responsibilityfor standardizingthe road data bank format.

3.22 SPTD would be responsiblefor selectingconsultants for setting up the supervisionand quality control of civil works and for setting up the training of SPTD staff in this work. The experts are expected to begin work in December 1988 in order to help establishthe supervisoryorganization before the start of civil works. The foreign experts needed for the road pavement evaluationand road data bank would be recruitedas needed after June 1989. The project would be completedby December 31, 1993. Loan/credit closing is expected to take place by December 31, 1994.

3.23 An implementationschedule for the proposed project (Annex 3) was agreed upon with the Governmentduring negotiations.

G. Procurement

3.24 Procurementunder the project would be carried out as shown in the followingtable. - 21 -

Procurement method ICB LCB Other Total ------(USS million) ------

Highway Civil Works 46.2 15.5 61.7 (24.2) (7.8) (32.0)

Consultant Services - 1.0 1.0 (1.0) (1.0)

Rural Roads - - 43.0 43.0 (14.2) (14.2)

Equipment 1.4 - 1.0 2.4 (1.4) (1.0) (2.4)

Training - 0.4 0.4 (0.4) (0.4)

Land Acquisition - - 9.3 9.3

Total 48.6 - 69.2 117.8 (25.6) (24.4) (50.0)

Note: Figures in parenthesis represent the amounts financed by the Bank Group. All figures include estimated physical and price contingencies and are rounded.

3.25 The unit-priced contracts for the construction of the highway (US$46.2 million) under the project would be awarded after international competitive bidding (ICB) by prequalified firms, in accordance with Bank guidelines. ICB wold be organized by the International Tendering Corporation (ITC) of the China National Technical Import Corporation, in conjunction with SPTD. About 18 km of highway from Km 84 + 100 to Km 102 + 00 passes through an area of great historical and archaeological significance. The archaeological sites discovered consist of pottery kilns and workshops, dating back to the Han Dynasty (206 B.C - 220 A.D.), continuing through the most prosperous and sophisticated Tang Dynasty period (618 A.D. - 917 A.D.) and ending at the Yuan Dynasty (1279 A.D. - 1363 A.D.). Experts consider the finds to have been a major pottery-producing center supplying pottery to the imperial courts and others. The site is still being investigated. Therefore, the construction must be carefully controlled in order to avoid damaging important relics. As a result, it was agreed that the civil works on thic section, estimated to cost US$15.5 million, would not be suitable for contract worK and that the works would be done by force account. SPTD and SHAB have the *ompetent staff and resources to carry out force account work for this section. It was also agreed at negotiations that a representative from the Chinese Archaeological Institute would be on site full-time during the construction of this section in order to monitor construction activities and avoid damage to relics. The - 22 - construction,improvement and rehabilitationof the rural roads and bridges (US$28.6 million) and emergency flood repair wotk (US$14.4 million)would be done by provincialforce account constructionteams; the small scope and scatteredlocations of these works make them unsuitable for contracting. Priced bills of quantitiesfor the rural road program would be agreed at negotiationsand these would be used for interim progress payments.

3.26 Equipment (US$2.4million) for road pavement evaluationand the road data bank would be procured through ICB. However, all items or groups of items estimated to cost less than US$200,000per contract, up to an aggregate amount for all contractsnot to exceed US$1.0 million, may be procuredon the basis of a comparisonof price quotationssolicited from at least three supplierseligible under the Bank's Guidelines,and in accordance zith proceduresacceptable to the Bank. The ITC, in conjunctionwith SPTD, would be responsiblefor the procurementof all equipment.

3.27 Under ICB, qualifyingdomestic contractorsand manufacturerswould be eligible for a margin of preferencein the comparison of bids of 7.5% for civil works and 15% for goods, or the prevailingcustoms duties,whichever is lower. Since procurementby competitivebidding in the highway subsector is still relativelynew in China, all ICB contracts for civil works and equipment estimatedto cost more than US$500,000would be subject to prior review and agreement of procurementdocumentation by the Bank Group.

H. Disbursements

3.28 The Loan would be disbursed to finance the following:

(a) 53% of the total cost of the highway civil works by contract after 1CB;

(b) 53% of the total cost of highway civil works by force account;

(c) 100% of foreignexpenditures for directly imported equipmentor 100% of local expenditures(es-factory) for locally manufacturedequip- ment and 75% of local expendituresfor other items procured locally; and

(d) 100% of the costs of consultingservices and overseas trainingof staff.

To facilitatedisbursement, a Special Account would be opened with an initial deposit in US$3.0 million, the estimatedaverage expendituresfor a four-month period. The account would be opened in US dollars in a bank acceptableto the Bank Group. Applicationsfor replenishmentof the Special Account would be submittedquarterly or whenever the Special Account is drawn down to 50% of its initial deposit, whichever comes first. Retroactivefinancing in an amount of US$5.0 million equivalentwould be made against expendituresfor the emergency constructionand rehabilitationof the rural roads damaged by floods; only work done after the appraisaldate of January 31, 1988 would be eligible for retroactivefinancing. A schedule of estimateddisbursements is given in Table 3.1, which also shows the China transportprojects disbursement profile; the rate of disbursementsunder the proposed project is estimated to follow the rate of disbursementshown in the profile. Although the - 23 - internationalcompetitive bidding procurementmethod for highways is still rather new in China and could cause problems,any delays are expected to be minimized by appropriateBank Group supervisionand assistanceduring the aarly stage of the project.

3.29 Disbursementswould be made against priced contractsfor the civil works and against priced bills of quantitiesfor the major work items for the force account work. Interim certificationof civil works completedand costed at unit rates in the contractsand bills of quantitieswould be done by the joint SPTD/consultingsupervisory team and certifiedby the SPTD. Disburse- ments for training overseas would made against the actual costs of travel, subsistenceand tuition or training fees. Disbursementsagainst statementsof expenditurewould be needed for the training componentand for goods or services costing less than US$200,000. Documents supportingthe expenditure statementswould not be submittedto the Bank, but insteadwould be retained by the HOC in Beijing and made availablefor review by the Bank supervision mission.

I. Auditing,:Reportingand Monitoring

3.30 A State Auditing Administration(SAA) has been establishedto conduct detailed audits of the governmentagency accounts. Assuranceswere obtained from the ProvincialGovernment during negotiationsthat the accounts of project-relatedexpenditures would be audited by independentauditors acceptableto the Bank Group and that audit reports would be sent to the Bank Group for review within six months of the close of each Chinese fiscal year. The Bank Group currentlyaccepts SAA audits for this purpose.

3.31 Project progress reports would be submittedquarterly to the Bank Group by SPTD, based on the projectmonitoring indices shown in Annex 4. A Project CompletionReport would be prepared and submittedto the Bank Group no later than six months after the loan/creditclosing date.

J. EnvironmentalEffects

3.32 The constructionworks for the highway, rural roads and bridges should cause no significantenvironmental problems. There is very little danger of soil erosion since the drainage systems along the highway and rural roads would be properly paved. The design and specificationsrequire that temporaryand permanentculverts be provided for all irrigationand drainage canals to ensure that farm activitiesare not disrupted. Contrary to harming it, the new highway would improve the environmentin many respects. Alignment would be improved through the use of grade-separatedjunctions and by separat- ing faster-movingvehicular traffic from the slower-movingbicycles, tractors and animal-drawncarts. This separationwould reduce the existing congestion and improve road safety. Congestionin or near the cities and towns along the existing road would be curtailed,substantially reducing noise and air pollution. No forest,public parks or gardens, scenic areas or wetlands would be affected by the new road. However, the new highway would pass through an area of importantarchaeological finds (see para. 3.35 below).

3.33 The acquisitionof land for constructionprojects is done under the "Regulationson the Requisitionof Land for State Construction"promulgated by the State Council on May 14, 1982 and as further clarifiedby a document - 24 - entitled "Elucidationof the Regulationson the Requisitionof Land for State Construction"issued by the State Planning Commission,the Ministry of Agriculture,Animal Husbandryand Fishery and the Ministry of Urban and Rural Constructionand EnvironmentalProtection on June 9, 1983. These regulations detail the proceduresfor acquiring land, the range of compensationto be paid for cultivatedland and resettlement,the use of any surplusagricultural labor resultingfrom the acquisition,and the environmentalprotection measures to be taken during construction. Compensationfor cultivatedland is based on the average annual output for three years prior to acquisition, multiplied by the State prices, the above-quotaprice (based on actual proportionin the productionunit), or a negotiatedprice for products which have no fixed price. The settlementallowance per capita is two to three times the average annual output value per mu of land; and it is based on the average area of cultivated land occupied by each farmer. The total amount for cultivatedland compensationand resettlementallowance is stipulatednot to exceed twenty times the annual output value of the acquired land. Surplus agriculturallaborers are absorbed in other agriculturalproduction units or employed elsewhere in factories,etc. The regulationsappear fair and equitableand are strictlyenforced, with penalties set for any deviation. As stated in para. 3.20, the procedures for acquiring land for the new highway are under way and would be completedbefore constructionstarts.

3.34 About 4,130 mu (275 ha) of land would be acquired for the highway, comprising3,290 mu of cultivatedland, 118 mu of vegetable land and the remaining720 mu for temporaryworks. Compensationwould be Y 2,360 per mu of cultivated land in Tongchuanand Yao counties and Y 4,000 per mu of cultivatedland in San Yuan county. Vegetable land would cost about Y 2,000 per mu and temporarilyrequired land about Y 640 per mu. About 902 families would need resettlement;these include 375 agriculturalfamilies, 177 urban families and some 350 mostly unmarriedworkers. A detailed resettlementplan has been prepared which gives details on the new locationsand support services to be provided. At negotiationsassurances were obtained that resettlementwould be carried out accordingto a plan agreed with to the Bank. A detail plan of resettlementis available in the project file.

3.35 As stated in para. 3.25, about 18 km of the new highway runs through an area of archaeologicalsignificance. Realignmentwas considered,but even where it would be possible it would not avoid the area in question,which is quite extensive. in order to control the work and prevent damage, the civil works in this area would be done by the force account constructionteam of SPTD instead of by contract;SPTD is accustomed to such problems and is experiencedin operating in such areas. To ensure that all precautionswould be taken it was agreed to have a representativeof the Chinese Archaelogical Office on site to monitor the constructionteam's activities.

3.36 A detailed report on the environmentalimpact of the new highway has been prepared by the SPTD in cooperationwith the ProvincialEnvironmental ProtectionAgency and the ProvincialArchaelogical Department; a copy is in the project file. - 25 -

IV. ECONOMIC EVALUATION

A. Overview

4.1 In recent years, Shaanxi province has experiencedvery rapid economic growth in all sectors--industrial,agricultural, and services. This growth in turn has created a growing demand for both long- and short-distance road transport. The strategy for developingthe road transportsystem to accommodatethis increase in demand is: (a) to improve road capacity in the major intercitytransport corridor; (b) to strengthenexisting road pavements and improve their maintenance;and (c) to develop and expand the rural road network in order to allow rural residentsto exploit resourceswhich require the use of low-cost motorizedtransport. Urier the proposed project, the Bank would support this strategy by financing: (a) the constructionand improvement of a major highway in one of the most importantintercity transport corridors; (b) the preparationof a paved road strengtheningand maintenance management program; and (c) the improvementand rehabilitationof rural roads.

B. Transport in the Existing Sanyuan-TongchuanCorridor

4.2 The Sanyuan-Tongchuancorridor providesaccess to one of the most highly developed, economicallyimportant and densely populatedareas in the province. Eleven percent of the provincialpopulation in this area produces 40X of the provincialgross output value of industry (Table 4.1). Industrial developmentin the influencearea of the road (Sanyuan,Yaoxian and Tongchuan) has been very rapid in recent years, and the gross output value of industry has been increasingat about 7Z a year since 1980. Yaoxian is an area of great historical and archaeologicalinterest; its potentialas a tourist attractioncould be realizedwith better road access. Tongchuanis a major coal mining and cement-producingcenter and the major energy resource base and source of constructionmaterial in the province. Improvedroad transport around it would promote economic developmentof the central Shaanxi plain.

4.3 The corridor is now served by a network of poor quality highways and feeder roads. These roads are built to such a low standardthat they no longer can accommodatetLe volume of traffic they carry either in terms of capacity or pavement strength. As a result, road transportationcosts are very high. The main road connectionbetween Sanyuan and Tongchuan is a 73.2- km road built to Class III and Class II standards. The pavementwidth of this road varies froni6 to 8 meters. Accordingto the MOC capacity design standard,this road should accommodateup to 2,000 vehicles per day (vpd). However, the existing traffichas now reached over 3,500 vpd--well beyond the road's capacity. Furthermore,the existing feeder roads were not built to carry the existing volume of traffic. They are mainly Class IV standard roads, with a few sections of Class III standard.

4.4 There is one 88-km single track railway connection in this corridor. However, the present level of demand has far exceeded the railway's capacity and there are no plans to increasecapacity in the near future. Furthermore,the distance between Sanyuan and Tongchuanon this rail line is 15 km longer than the existing highway and would be 23 km longer than the proposed new highway. The rail line branches from the Gansu-Qinghailine and - 26 -

extends from Xianyang to Sanyuan, making an eastward detour to Fuping, and then continuingwestward to Yaoxian and north to Tongchuan. Freight traffic on the section between Sanyuan and Tongchuan reached 11.3 million tons in 1985, with coal accountingfor 872 and cement for 7%. Passenger traffic in that same year reached 1.3 million passenger trips. Extendingthe railway even between the Yaoxian and Tongchuan section would not be feasible; it would be more costly than a highway alternativebecause of the rolling terrain and narrow mountain valleys.

C. Traffic on the Existing Roads Without the Project

4.5 According to the statisticscompiled by SPTD's traffic count station at Yaoxian, road traffic on this corridor grew very rapidly, at an average rate of 17% a year between 1980 and 1985. Heavy truck traffic grew most rapidly, at 55% a year. Trucks compriseaabout 84% of the 4,112 vpd in 1985. This very high proportionof trucks (Table 4.2) combined with the high volume of non-motorizedand slow-movingtraffic creates serious congestionon this low standardClass III road. Because of this congestionand the many at- grade intersectionswith the railwaysand local roads, on some sectionsof the road the travel speed is only 15-20 kph. The number of road accidents is also increasingrapidly; between 1981 and 1985 traffic accidents increasedby an average of 14% each year. In May 1986, SPTD carried out origin-destination (O-D) traffic surveys for the existing road at Yaoxian and Huangbao. The results of the survey showed that there were almost equal volumes of traffic on the two sections of road between Sanyuanand Yaoxian and between Yaoxian an Chuankou (close to 4,000 vpd on each). Traffic fell to about 1,400 vpd on the Chuankou-Houliusection of the road (Table 4.2). Assuming growth rates of 6% for small trucks, 10-12% for medium size and large trucks, and 12-14% for passengerbuses, traffic in the corridor would reach 7,000 rpd in 1992 and 16,000 rpd in the year 2000 (Table 4.2). Given this traffic forecastand the current and expected economic activity in the influencearea of the road (paras 4.1-4.4), it is clear that additional road capacity is needed now.

D. ProjectedTraffic on the New Sanyuan-TongchuanHighway

4.6 The projected traffic on the new highway would come from three main sources: (a) trafficdiverted from the existing road; (b) traffic diverted from the railway; and (c) traffic generatedby the improved road capacity and travel speed.

4.7 Traffic Diverted from the Existing Road. The O-D surveys conducted in May 1986 show that most of the motorized traffic on the existing road is through traffic, e.g., 80% from Yaoxian to Sanyuanand beyond, 77% from Yaoxian to Chuankou,and about 20% from Chuankou to Houliu. Because the new highway would be shorter than the old one and would have a superior riding quality all through-trafficwould shift to the new road. Thereforethe estimatedtraffic that would divert to the new highway in 1992, the opening year, would be about 4,600-5,700vpd on the Class I sections between the Sanyuan and Chuankou,and about 520 vpd on the Class II section between Chaunkou to Houliu. By the year 2000, diverted traffic on the new highway would reach about 10,000-13,000vpd (Table 4.3).

4.8 Traffic Diverted from Railway. Although the new highway linking Sanyuan to Tongchuanwould be 23 km shorter than the railway, no significant - 27 - diversionof railway freight traffic to the new highway is expected in the early years. Ninety-fourpercent of the freight traffic on railway comes from coal and cement (para. 4.3) and for these commoditiesrailway transporthas a comparativecost advantage. The remainingfreight traffic consists of miscellaneousshort-distance traffic or less-than-car-load(LCL) traffic. On the other hand, 70% of the rail passengertraffic is expected to move to the new highway because of the significantsavings in distance and time. This diversionwould release some railway capacity to meet the growing demand for freight traffic. This available rail capacity would be fully used by 1995 when the railway capacity would again be saturated. Thereforeafter 1995, the railway LCL and other shorter distance freight traffic would start moving to the new highway (Table 4.3).

4.9 Generated Traffic. With a higher standard road, improved pavement widths and geometricsand increasedcapacity, travel speeds would be increased and travel time reduced on both the new and existing road. The congestionand the number of accidents on the existing road would be substantiallyreduced. As travel time is reduced, more trips would be undertakenwith the same vehicles, so these improved road transportconditions would generate traffic beyond the normal growth rate. An increaseof about 10% to 20% of normal traffic is expected to be generatedas a result of improveI roads, adding at least 600 vpd in 1992 (Table 4.3). a

4.10 The total trafficexpected on the new road in 1992 would be about 5,300-6,600vpd. With the high proportionof trucks, the equivalent passenger-car-units(PCUs) would be about 14,000-18,000per day on the Class I section and 2,000 PCU on the Class II section. Therefore,a Class I four-lane divided highway would be needed between Sanyuan-Chuankou,and a Class II two- lane highway would be needed between the Chuankou-Houliusection. The new highway would provide adequate capacity up to the year 2000 (Table 4.4).

E. Economic Evaluation

4.11 Economic Costs. All input and output elements for evaluating the new highway'scosts and benefits were obtained using January 1988 financial costs and applying conversionfactors to reflect their economic costs (Table 4.5). For traded goods, the c.i.f. prices of imports and f.o.b. prices of exports were used in estimating the cost of materialsand equipment,making adjustmentsfor the cost of inland transportation. The official exchange rates were used to convert foreign currenciesto Yuan. The adjustedeconomic cost of the project is Y 241.8 million. The road requires routine maintenance every year and periodic maintenanceor repaving every ten years. The routine maintenancecost is estimated at Y 2,000/km for a four-lanepaved road and Y 1,000/km for a two-lane road. Periodicmaintenance is estimated to be 10% of the constructioncost.

4.12 Economic Benefits. The principalbenefits of the new highway would take the form of savings in vehicle operatingcosts (VOC). Of the Y 39.0 million in total benefits in 1992, the openingyear, 86% would accrue from the VOC savings of normal traffic. This savingswould result from the shorter distance, the improvementin riding quality of the new road, and reductionin congestionon existing roads. The remaining14% is attributedto: 11% for newly generatedtraffic, 2% for traffic diverted from railways,and 1% for accident reduction. The estimate of benefits is based on the anticipated - 28 -

traffic volume (Table 4.3) and the VOCs estimated for differenttypes of vehicles on the differentroads (Table 4.6). Detailed estimatesare available in the project file. The benefits would build up rapidly after the project is completed since the existing transportcorridor is now very congested. Benefitshave been assumed to be constant after the year 2012, when project facilitieswould be used to their full capacity.

F. Overall Evaluationand Risks

4.13 Comparingbenefits to costs yields an economic rate of return (ERR) of approximately281 (Table 4.7). The main risk would be the delayed benefits and possible cost increasesassociated with delays in completionof the highway. The project seeks to deal with this risk by providingearly assistance in procurementand training of supervisoryconstruction engineers. The sensitivityanalysis below shows that the project still would remain viable even if costs exceeded estimates by 20% or if net benefits were lower by 20% or even with the combinationof the two. The benefits from other relatively small investmentsin staff training, studiesand improved road planning are not quantifiable. However, the present lack of planning personnel,lack of exposure to new technology,and absence of reliable data and data collection systems for road planning all suggest that such investmentswould have very high rates of return.

ECONOMIC RATE OF RETURN - SENSITIVITYANALYSIS

ERR (X) Sanyuan- Yaoxian Chuankou- Project Yaoxiau Chuankou Houliu total

Best Estimates 27.8 29.8 20.1 27.5

Risk Analysis - 20% cost increase 25.5 27.3 18.5 25.2 - 20% benefit reduction 24.9 26.7 18.0 22.3 - 20% cost increase and 20% reduction of benefit 22.6 24.3 16.0 24.7

G. Improvementand Repair of Rural Roads

4.14 The rural road developmentprogram is planned for Shangluo and Ankang prefectures in the southern,poorest part of Shaanxi provincewhere the GOVAI per capita was only Y 163 in 1986. This representsabout 20% of the provincialaverage, or about 14% of the country'saverage. Poverty here, particularlyin Shangluo, is primarilycaused by the lack of a good transport network, since only 16% of the existing road network has all-weathersurfacing (Table 4.8). Furthermore,since there are no railways or inland waterways serving the area, the highway network is the only mode of transportaiton.

4.15 The program includes the improvementof two roads in Shangluo prefectureand one road in Ankang prefecture. The roads in Shangluo extend - 29 - from Shangxian to Zhashui and from Shangnan to Jiepaiya. The road in Ankang extends from Pingli to Zhenping. The condition of all three roads is very poor with most sections being below Class TV standard and some sections being only farm trails. Less than 50% of the traffic on the existing roads comes from motorized vehicles; the rest comes from tractors and animal-drawn carts. Accordingly,road transportcosts (includingtime value) in the area are very high, ranging between 0.26-0.35yuan per ton-km. With improved roads, the road transportcost would fall to between 0.2-0.25 yuan per ton- km. The benefits from improvingthe rural roads would accrue from cost savingson normal and generated traffic. Background informationon and an economic analysis of the three rural roads are given below.

The Shangxian-ZhashuiRoad

4.16 The road influencearea. The road (129.88km) is located in the central part of the Shangluo prefecture (see Map IBRD 20255). The road runs from the Shang county seat, westward to Hongyanshi,Xingping, and ends at the Zhashui county seat. The road influencearea extends over 2,700 sq km, covering 2 counties and 20 villages with a total populationof 190,000. The agriculturalland in this area is much more fertile than the yellow soil plateau to the north. Agriculturalproduction of food grain, timber and forestry products is abundant. The area also has large deposits of mineral resources, i.e., iron and silver, which are not commerciallyexploitable now because of high transportcosts.

4.17 Existing road and traffic conditions. The existing road, built in 1964, passes through the difficult terrain of the Qingling Mountain. The conditionof the road is very poor and most of its length is below Class IV standard. During the rainy season from July to September,many sections of the road are impassible,causing traffic from Shangnan to detour for about 50 km through Shanyang and Zhen'an counties in order to reach Zhashui. Existing traffic in 1987 was 750 vpd, of which 34% was rotorized,44% came from tractors,and the remaining22% came from animal drawn carts.

4.18 Project costs and benefits. The cost of upgradingthis road to a Class III standard is estimated to be Y 36.2 million. Routine maintenanceof this road would cost about 'Y l,000/km/year;periodic maintenance would cost about 10% of constructionand would be required every 10 years. The cost of transporton the existing road is Y 0.26/t-km; this cost would drop to about Y 0.20/t-kmon the improved road. The major quantifiablebenefits of the project road include:

(a) savings in transportcosts for existing motorizedtraffic;

(b) savings in time and transportcosts for existing tractor traffic now which would convert to small trucks when the road is improved;and

(c) developmentaltraffic generatedby the expansionof agriculturalor village activitieswhich would be made possible by the lower cost of road transport.

4.19 The economic rate of return. The first year benefit of this road would be 23%--of which 49% would come from normal traffic, 38% from the conversionof tractor transport,and 13% from generated traffic. The resulting ERR is 25% (Table 4.9). - 30 -

The Shangnan-JiepaiyaRoad

4.20 The road influencearea. This road (105.5 km) is also located in the southeasternShangluo prefecture(see Map IBRD 20255). It extends from the Shangnan county seat close to the border of Shaanxi - Henan provinces, southwardto Xianghe and ends at Jiepaiya, the border town between Shaanxi and Hubei provinces. The road serves an area of over 1,094 sq. km with 21 villages and townshipscontaining a populationof 84,480. Major agricultural activitiesin this area include animal husbandry and forestryproducts. It also has great potential in mining non-metallicores such as asbestos, crystal and marble.

4.21 The existing road and traffic conditions. The existing road was built to a low Class IV standard and is the only road serving the 21 villages in the influencearea (para. 4.20). It is locatedalong the very difficult terrain of the Shuanmiao and Gaomiao Mountains on the provincialborder and serves as an importantinter-provincial road link. Existing traffic in 1987 was 350 vpd of mixed traffic; 31% of the trafficwas motorized.

4.22 Project costs and benefits. The estimatedcost of upgrading this road to a Class III standard is Y 27.2 million (para. 4.21). Project benefits accrue mainly from generatedtraffic, which has great potential,and from transportcost savings on normal traffic. The road's strategiclocation at the border of three provinceswould generate more inter-provincialtrade. The improved road would lead to Shiyan, a large industrialcity in Hubei province; this would provide a substantialmarket for the agriculturalproducts from Shangluo prefecture.

4.23 The economic rate of return. The first year benefit of this road would be llX--ofwhich 35% would come from normal traffic, 21% from the conversionof tractor transport,and 44% from generated traffic. The resulting ERR is 18% (Tdble 4.9).

The Pingli-ZhenpingRoad

4.24 The road influencearea. This 59.5 km road is located in Ankang prefecture(see Map IBRD 20255), south of Shaanxi and close to the border with Hubei and Sichuan provinces. The road extends from Pingli county and runs southwardto Zhenping county. It is also an interprovincialroad link. The influencearea of the road covers over 3,200 sq. km and a populationof 171,000. Major agriculturalproducts includefood grains, tea, jute, tung oil and other forestry products. Mineral resources in this area include coal, iron ore and marble.

4.25 The existing road and traffic condition. The existing road is of a low standard Class IV, located in mountainousterrain. During the rainy season it often becomes impassable. Traffic counts in 1985 show the existing traffic on the road to be about 160 vpd; 63% of this trafficcomes from motorizedvehicles.

4.26 Project costs and benefits. To upgrade about 31.5 km of the existing road and construct some 28 km of new road, both to Class III standard, would cost about Y 28.7 million. The benefits of the project, apart from transportcost savingson normal traffic,would also accrue from traffic gene- - 31 -

rated after the road is opened because the improved road would facilitateand enhance inter-provinicialtrade among Shaanxi, Sichuan and Hubei provinces.

4.27 The economic rate of return. The first year benefit of this road would be 14Z--ofwhich 41% would come from normal traffic, 11% from conversion of tractor traffic, and 52% from generated traffic. The resultingERR is 16% (Table 4.9).

V. AGREEMENTS REACHED AND RECOMMENDATIONS

5.1 During negotiations,agreement was reached with the Shaanxi Province on:

(a) a Road Safety Program for Shaanxi Province (para 2.14);

(b) the terms of reference for consultingservices for supervisionof construction(para. 3.7);

(c) the terms of reference for the evaluation of existing road pavements and the preparationof a strengtheningand maintenancemanagement program (para 3.10);

(d) the terms of referencefor the preparationof a road data bank (para 3.11);

(e) an implementationschedule for the training program (para 3.13);

(f) the list of equipmentto be financed under the project (para 3.18);

(g) a project implementationschedule (para 3.23); and i (h) a representativefrom the ChineseArchaeological Institute to be assigned on site full-timeduring the cornstructionof the road section that passes through the area of archaeologicalremain (para. 3.25).

5.2 During negotiations,assurances were obtained from the Provincial Government that:

(a) the audited accounts of project-relatedexpenditures prepared by the State Auditing Administrationwould be sent to the Bank Group for review within six months of the close of each Chinese fiscal year (para 3.30); and

(b) the resettlementof populationsin the area aff.'tCd b- the project is carried out according to a plan acceptable to the Bank (para. 3.34).

5.3 Conditionsof effectivenessof the loan would be that the State Council has approved the Loan Agreement.

:#.4 Subject to the foregoing,the proposed projecc would be suitable for a Bank loan of US$50.0million for a term of 20 years, includinga grace period of five years, at the Bank's standardvariable interest rate. CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

China: Investment in the Transport Sector (Including Posts and Telecommunications) (Y btllion)

Ist FYP 2nd FYP 3rd FYP 4th FYP 5th FYP 1953-57 1958-62 1963-65 1966-70 1971-75 1976-80 1980 1981 1982 1983 1984 1985 1986

Railway 5.916 10.416 3.395 11.250 17.308 4.047 3.044 1.445 2.637 4.221 5.852 7.7 8.5 Highway ------1.086 0.799 0.887 0.722 1.196 2.3 2.7 Waterway ------1.391 1.295 1.545 1.937 2.629 3.7 3.7 - Aviation ------0.275 0.070 0.145 0.299 0.263 2.1 1.3 Pipeline ------0.054 0.018 0.017 0.006 0.010 0.1 0.5

Subtotal 5.850 3.627 5.231 7.185 9.950 15.9 16.7

Post and telecommunications ------0.384 0.420 0.490 0.619 0.896 1.2 1.3

Total 9.015 16.330 5.378 15.001 31.759 30.245 6.234 4.047 5.721 7.804 10.846 17.1 18.0

Total Capital Investment 58.847 120.609 42.189 97.603 176.395 234.217 55.889 44.291 55.553 59.413 74.315 107.4 117.6

Transport and telecommunications as X of total investment 15.32 13.5% 12.7% 15.4% 18.02 12.9% 11.22 9.12 10.32 13.12 14.62 16.02 15.32

Source: Statistical Yearbook of China. -33- Table 1.2

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

China: Freight Traffic, 1952 1977 and 1979-86 (Jbillionton-km)

Road Domestic Pipe- Civil Ocean Year Rail /a waterway /b lines aviation Total shipping

1952 60.2 1.4 11.8 - - 73.4 2.8 Modal split (%) (82) (2) (16) - - (100) -

1977 456.8 25.1 102.1 38.7 0.1 622.8 174.1 Modal split (%) (73) (4) (17) (6) - (100)

1979 559.8 74.5 139.0 47.6 0.1 821.0 317.4 1980 571.7 76.4 152.3 49.1 0.1 849.6 353.2 1981 571.2 78.0 150.1 49.9 0.2 850.0 364.3 1982 612.0 94.9 170.8 50.1 0.2 928.0 376.9 1983 6b4.6 108.4 181.1 52.4 0.2 1,006.1 397.7 1984 724.7 153.6 196.1 57.1 0.3 1,132.0 437.4 1985 812.5 177.0 225.5 60.3 0.4 1,275.8 532.9 1986 876.5 195.8 248.9 61.2 0.5 1,382.9 594.8 Modal split (M) (64) (14) (18) (4) - (100)

Growth rate % p.a. 1952-77 8.4 12.2 9.0 - - 8.9 17.9 1979-84 5.2 9.6 7.3 3.7 - 6.6 6.5 1983-84 9.1 41.7 8.3 9.0 - 12.5 10.0 1984-85 12.1 15.2 15.0 7.2 - 12.7 21.8 1985-86 7.9 10.6 10.4 1.5 - 8.4 11.6 1980-86 7.4 17.0 8.5 3.7 - 8.5 9.1

/a From 1979 includes all road transport not only that done by road transport departments. These data exclude transportby traditionalmeans which is certainly sizeable in terms of tonnage but mostly on short distance.

/b Excludes ocean going transport which is often included in Chinese statistics. In 1979, coastal shipping accounted for 85 billion tkm and inland waterways for 54 billion tkm. The figures for 1982 were respectively106 and 65 billion tkm.

Source: StatisticalYearbook of China. -34- Table 1.3

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

China: Passenger Traffic, 1952, 1977 and 1979-86 (billion passenger-km)

Year Rail Road Waterway Aviation Total

1952 20.1 2.3 2.5 - 24.9 Modal split (M) (81) (9) (10) - (100)

1977 102.3 44.8 9.8 1.8 158.7 Modal split (%) (64) (28) (7) (1) (100)

1979 121.6 60.3 11.4 3.5 196.8 1980 138.3 72.9 12.9 4.0 228.1 1981 147.3 83.9 12.9 5.0 250.0 1982 157.5 96.4 14.5 6.0 274.4 1983 177.6 110.6 15.4 5.9 309.5 1984 204.6 133.7 15.4 8.4 362.0 1985 241.6 157.3 17.4 11.7 428.0 1986 258.7 168.6 17.1 14.6 459.0 Modal split (%) (56) (37) (4) (3) (100)

Growth rate % p.a. 1952-77 6.7 12.6 5.6 - 7.7 1979-84 11.0 16.5 5.9 19.2 12.7 1983-84 15.2 21.0 - 42.4 17.0 1984-85 18.1 15.4 11.7 40.0 17.3 1985-86 7.1 7.2 -1.7 24.8 7.2 1980-86 11.0 15.0 4.8 24.1 12.3

Source: Statistical Yearbook of China. CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

China: Highway Design Standards in China

Expressway Class 1 Class 2 Class 3 Class 4 Plain- Hilly- Plain- Hilly- Plain- Hilly- Plain- Hilly- Plain- Hilly- hilly mountain hilly mountain hilly mountain hilly mountain hilly mountain area area area area area area area area area area

Number of vehicles accommodated --- >25,000------5,000-25,000-- --2,000-5,000-- -- >2,000------>200----

Design travel speed (km/hr) 120 80 100 60 80 40 60 30 40 20

Surface width (m) 2x7.5 2x7.0 2x7.5 2x7.0 9 7 7 6 3.5 3.5

Subgrade width (m) 26 23 23 19 12 8.5 8.5 7.5 ----- 6.5

Minimum radius of hori- zontal curves (m) 650 250 400 125 250 60 125 30 60 15

Maximum gradient (%) 3 5 4 6 5 7 6 8 6 9

Minimum passing sight distance (i) 210 110 160 75 110 40 75 30 40 20

Nonsuperelevated radius of hori- zontal curve (m) 5,500 2,500 4,000 1,500 2,500 600 1,500 350 600 150

Source: Technical Standard on Road Engineering, Highway Bureau, Ministry of Communications,Beijing, 1981. I-a -36- Table 1.5

CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

China: Motor Vehicles Manufacturedand Imported,1980-86 ('000)

1980 1981 1982 1983 1984 1985 1986

Domestic Production Total vehicles 222.3 175.6 196.2 239.8 316.4 437.2 369.8 of which trucks 135.5 108.3 121.8 137.1 181.8 269.0 229.1 as % of total (61.0) (62.0) (57.0) (57.2) (57.4) (61.5) (62.0)

Imports i Cars - 1.4 1.1 5.8 21.6 105.8 Trucks 22.0 20.8 7.7 8.4 28.0 111.5 Dump trucks - 1.5 1.1 2.3 4.8 10.7 Chassiswith engines - 0.3 0.4 0.9 2.1 2.6 Others - 17.6 5.8 7.6 92.2 123.4

Total 41.6 16.1 25.1 148.7 354.0

Source: StatisticalYearbook of China 1982-86. -37- Table 1.6

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

China: Total Freight Transport Handled by Public and Social Trucks, 1978-86

Freight volume Freight density Average distance (million tons) (billion ton-km) (km) Public Social Public Social Public Social truck truck Total truck truck truck truck

1978 852 2,406 3,258 27.4 44.6 32.1 18.5

1979 816 2,748 3,564 26.8 47.7 32.8 17.4

1980 760 2,060 2,820 25.5 50.9 33.5 24.7

1981 715 2,922 3,637 25.3 52.7 35.4 18.0

1982 788 3,004 3,792 30.3 64.6 38.4 21.5

1983 791 3,219 4,010 33.5 74.9 42.3 23.3

1984 789 4,545 5,334 35.4 118.2 44.9 26.0

1985 762 4,987 5,749 35.5 141.5 46.6 28.4

1986 785 36.9 158.9 47.0

Source: Statistical Yearbook of China, 1980-86. CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Shaanxi: Demographicand Transport Network Data, 1985

2 Popula- Per capita Road Transport network density (km/'O00 km ) tion Area GOVAI /a length Navigable in- (million) ('000 kM2) (Y) ('000 km) Road Railway land waterway

Country Total 1,045.3 9.600 1,164.0 942.4 98.2 5.4 11.4

Xizang autonomous region /b 2.0 1,200 433.0 21.7 18.1 - -

Jiangsu province /c 62.1 100 2,043.0 22.4 224.0 7.1 236.5

Shandong province /d 76.9 150 1,164.5 36.3 242.0 13.2 12.3

Sichuan province /d 101.9 560 745.3 89.3 159.5 5.1 14.3

Shaanxi province 30.0 190 852.9 37.1 195.3 9.8 3.6

Jiangxi province 34.6 160 764.5 31.8 198.7 9.0 30.9

/a Groes Output Value of Agriculture and Industry. 7W The poorest province in China In terms of GOVAI. 77 The richest province in China in terms of GOVAI. 7T Shandong province has the fifth largest road network in China in terms of road density per land area (Beijing, Shanghai and Tianjin municipalitiesare excluded),whereas Sichuan province is the largest in terms of total length ; of road network.

Source: StatisticalYearbook of China, 1986. Table 2.2 -39-

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Shaanxi: Vehicle Fleet, 1985 ('000)

Trucks /a Passenger bus Transport facilities No. of trucks No. of bus Transport tractor Gov't Social Gov't Social per km road per '000 per km road trucks trucks bus bus network pop. network

Country Total 194.1 2,497.0 83.1 813.3 2.9 0.86 3.2

Xizang autonomous region /b 2.7 13.6 0.2 3.0 0.7 1.60 0.2

Jiangsu province /c 8.8 96.4 5.5 42.3 4.7 0.77 0.8

Shandong province 15.3 153.0 3.8 48.0 4.6 0.67 9.0

Sichuan province 17.6 132.3 8.9 35.3 1.9 0.52 0.7

Shaanxi province 5.7 64.6 2.2 22.5 1.9 0.82 9.4

Jiangxl province 3.8 60.6 3.1 17.7 2.0 0.60 0.9

/a Freight trailers excluded.

/b The poorest province in China.

/c The richest province in China.

Sources: - The Statistical Yearbook of China, 1986 - The Statistical Yearbook of Jiangxi. Sh4ndong and Shaanxi Provinces, 1986 - The Statistical Yearbook of Sichuan Province, 1987 Table 2.3 -40-

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Shaanxi: Freight Handled by Public and Social Trucks, 1985

Freight volume Freight density Average distance (million tons) (billion ton-km) (km) Public Social Public Social Public Social truck truck Total truck truck truck truck

Country Total 762.2 4,987 5,749 35.5 141.5 46.6 28.4

Xizang autonomous region /a 0.4 - - 0.3 - 750.0 -

Jiangsu Province /b 48.0 166 214 2.0 - 41.7 -

Shandong Province 45.9 81 127 3.1 3.0 67.4 37.0

Sichuan Province 44.5 443 487 2.7 34.2 60.7 39.9

Shaanxi Province 16.8 29 46 0.8 1.2 47.6 40.9

Jiangxi Province 12.6 74 87 0.7 3.7 55.6 49.7

/a The poorest province in China.

/b The richest province in China.

Sources: - The StatisticalYearbook of China, 1986 - The StatisticalYearbook of Jiangxi, Shandong and Shaanxi Provinces,1986

- The StatisticalYearbook of Sichuan Province, 1987 Table 2.4 -41-

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Road Maintenance Revenues and Expenditures. 1980-87 (Y million)

Revenue Expenditure Road Subsidies New con- Over- mainte- Provin- struction Routine Periodic head nance cial gov- and mainte- mainte- and Year Total fee ernment MOC Total upgrading nance nance others

1980 91.1 90.7 ------

1981 122.0 93.0 29.0 115.6 101.1 - 9.6 5.0

1982 114.8 108.1 6.7 115.1 96.6 - 10.2 8.4

1983 138.9 131.1 7.8 137.2 93.9 - 11.8 31.5

1984 159.5 155.5 1.9 2.0 167.2 112.3 - 13.6 41.2

1985 226.6 220.5 3.0 3.2 217.7 145.8 - 16.1 55.8

1986 273.2 246.1 1.1 26.0 209.3 95.6 33.0 27.0 53.7

1987 292.7 250.5 1.7 40.5 253.4 128.3 34.3 27.4 63.3

Source: Shaanxi Provincial Transport Department, February 1988. Table 2.5 -42-

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Shaanxi: Capital ConstructionInvestment In Transport Sector, 1985

Total capital Per-capita capital constructioninvestment constructioninvestment Rail- High Water Avia- Rail- High Water Avia- Total way way way tion Total way way way tion … ---- (Y 100 million) ------(Y) ------.

Country Total 159.3 77.1 23.1 36.2 20.6 15.2 7.4 2.2 3.5 2.0

Xizang autonomous region /a 0.64 0.02 0.59 - 0.03 32.0 1.0 29.8 - 1.5

Jiangsu province /b 4.6 0.5 0.8 3.0 0.1 7.4 0.8 1.3 4.8 0.1

Shandong province 9.8 5.8 0.5 2.7 0.2 12.7 7.5 0.6 3.5 0.3

Sichuan province 3.9 0.9 1.7 0.9 0.4 3.8 0.9 1.7 0.9 0.4

Shaanxi province 1.4 0.9 0.4 0.01 0.1 4.7 3.0 1.3 0.03 0.3

Jiangxi province 0.5 0.1 0.2 0.1 - 1.4 0.3 0.6 0.2 -

/a The poorest province in China.

/b The richest province in China.

Sources: - The StatisticalYearbook of China, 1986 - The StatisticalYearbook of Jiangxi, Shandong and Shaanxi Provinces, 1986 - The StatisticalYearbook of Sichuan Province, 1987 Table 3.1 -43-

CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

EstimatedDisbursement Schedule

Estimatedcumu- Disbursementprofile IBRD fiscal year lative disbursements of China Transport and semester US$ million projects (%)

1989 December 31, 1988 0 June 30, 1989 5.0 9 1

1990 December 31, 1989 6 June 30, 1990 15.0 26 24

1991 December 31, 1990 44 June 30, 1991 35.0 60 62

1992 December 31, 1991 73 June 30, 1992 40.0 70 79

1993 December 31, 1992 88 June 30, 1993 45.0 87 93

1994 December 31, 1993 49.0 98 100 June 30, 1994

1995 December 31, 1994 50.0 100 - June 30, 1995 CHINA

SHAANXI PROVINCIALHIGHWAY PROJECT

Sanyuan-TongchuanRoad: Economic Data of its ServiceArea, 1985

Gross output value Per capita output value Of agriculture Of agriculture Population Area and industry Of industry and industry Of industry (million) ('000 km2) (Y billionat 1980 constant (Y/person)-- price

Xi'an City 2.3 0.9 7.0 6.8 2,991 2,922

Sanyuan County 0.3 0.6 0.2 0.1 636 364

Yaoxian County 0.3 1.6 0.15 0.1 600 400

TongchuanCity 0.4 0.8 0.5 0.4 1,205 1,128

Total, the 4 Cities 3.3 3.9 7.8 7.4 2,363 2,264

Total Shaanxiprovince 30.0 205.6 23.7 16.9 790 563

% of the 4 cities 11.0 1.9 32.9 43.8 3 times 4 times to the province higher higher

Source: Statisticalyearbook of ShaanxiProvince, 1986.

ID 0* 0 -45;- Table4.2 CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

A. Traffican theExisting Roads without the New Sanyuan-Tongchuan Highway

ExpectedTraffic Vehicle Operating Costs SrowthRates on existingroads

CharacteristicsShanyuan-Yaoxian- Chuankou- 1986- 2001- Flat Hilly Moutain of existingRd. YaoxianChuankou Houliu 2000 2012 poorrd. poor rd. poor rd.

Rd length(73.2km) 37.4 19.4 16.4 width:pavement,e 6.5-8.5 8.5 8.5 lanes 2 2 2 6radients 4.52 5-6t 8-131 flat,rol.hilly mountain 1986ajv speed,kph 35 30 25

1996vpd:

Trucks:Small 130 93 33 6 4 315.0 340.3 428.3 Medius 2013 2254 820 10 8 434.8 504.5 600.6 Large 276 229 84 12 10 585.2 681.4 819.8 Tr.trailer 523 577 210 12 10 1202.7 1456.2 1738.4 Buses:Small 343 375 137 14 10 560.3 585.7 735.5 Medium 267 301 110 12 8 721.4 937.7 1078.3

Total 3552 3829 1394

1992vpd:

Trucks:Small 184 132 47 Medium 3566 3993 1453 Large 545 452 166 Tr.trailer 1032 1139 415 Buses:Small 753 823 301 Nedius 527 594 217

Total 6608 7133 2598

2000vpd:

Trucks:Small 294 210 75 Medium 7644 8560 3114 Large 1349 1119 411 Tr.trailer 2556 2820 1026 Buses:Seall 2148 2348 858 Medium 1305 1471 538

Total 15296 16528 6021 -46- CHINA Table4.3 SHAANIIPROVINCIAL HIGHWAY PROJECT PageI of 2

S. ProjectedTraffic anthe NevSanyuan-Tongchuan Highuay

li)Traffic divertedto & generatedon new road

VehicleOperating Costs onexisting roads Expected------Characteristics Shanyuan-Yaoxian-Chuankou- Traf4.GenFlat Hilly Moutain of proposedRd. YaoxianChuankou Houliu Rates(1) good rd. good rd. goodrd.

Rdlength (65.4ke) 32 19.3 15.5 distancesaved(ks) 5.4 0.1 0.9 width: pavement,e 2x7.5 2x7.5 9 lanes 4 2x2 2 Gradients 0-IX upto3Z uptoS2

DesignSpeed, kph 100 90 60

Expecteddiversion frexisting rd.(2) 70 80 20

1992vpd: Divertedtraffic

Trucks:Small 129 106 9 225.3 243.4 312.7 Medium 2496 3194 291 313.6 363.9 441.3 Large 381 362 33 427.7 498.0 604.7 Tr.trailer 723 911 93 990.0 1077.6 1295.7 Buses: Small 527 658 60 359.6 395.2 501.8 Nedius 369 475 43 523.7 608.2 740.8

Total 4625 5707 520

1992vpd: 6eneratedtraffic

Trucks:Small 26 21 2 20 Medius 250 319 29 10 Large 38 36 3 10 Tr.trai ler 145 192 17 20 Buses:Small 105 132 12 20 Medius 74 95 9 20

Total 637 796 72 _------_ - _-_-_--- - 1992vpd: Divertedfr.railwy

Largetruck 0 0 0 Mediumbus 107 107 107 Total 107 107 107

Total(onnew road) 5369 6599 699 ____------_ _

------_------__------_------47-

10iTraffic liverted to I generatedon ne roadIContd .... Table4.3 ...... ------^------Page2 of 2 Sanyuan-YVoaian- Chuankwu- YVosianChuankou Heuliu

2000vpd: Divertedtraffic

Trucks:Small 206 168 15 lledium 5351 6848 623 Large 944 995 92 Tr.trailer 1789 2256 205 Ruses: Small 1503 1878 172 ledius 913 1177 10l Total 10707 13222 1204

2000vpd: Generatedtraffic

Trucks:Small 41 34 3 !edium 535 685 62 Large 94 90 9 Tr.trailer 358 451 41 Buses: Small 301 376 34 Nedium 183 235 22 Total 1512 Ai70 170

2000vpd: Divertedfr.railwy

Largetruck 258 259 259 Nediumbus 199 198 199 Total 456 456 456

Totallonneu road) 12674 15548 1830

Iiii Trafficleft on existingroad

1992vpd;

Trucks:Seall 55 26 37 ledius 1070 799 1162 Large 163 90 133 Tr.trailer 310 228 332 Buses:Small 226 165 241 hedius 159 119 174 Total 1982 1427 2078

2000vpd:

Trucks:Stall B8 42 60 ledius 2293 1712 2491 Large 405 224 329 Tr.trailer 767 564 921 Buses:Seall 644 470 686 Iedius 391 294 430 Total 4589 3.06 4817 -48-

Table4.4 CHINA

SHAANXIPROVINCIAL HIGHWAY PROJECT

TrafficCapacity ofthe New Sanyuan-Tongchuan Highway in PassengerCarEquivalent Unit (PCUs)

Shanyuan-Yaoxian-Chuankou- YaoxianChuankou Houliu

1992vpd:

Trucks:Small (2) 310 253 22 Medium(2.5) 6865 B785 799 Large (3) 1258 1193 109 Tr.trailer(4) 3469 4373 398 Buses:Small (2) 1265 15B0 144 Medium(2.5) 1374 1693 397

Total 14540 178781870

2000vpd.

Trucks:Small (2) 494 404 36 Medium(2.51 14715 18831 1713 Large (3) 3889 3728 1044 Tr.trailer(4) 8588 10828 9B5 Buses:Small (2) 3608 4508 412 Hedium(2.5) 3234 4025 817

Total 34529 423245007

Note:Figures inparentheses arecar equivalent factors of vehiclesmoving on flat terrain. Table 4.5

CHINA

SHAANXI PROVINCIALHIGHWAY PROJECT

Economic Cost ConversionFactors, 1988

Financialcost Conversion Economic composition(%) /a factors cost (%)

Construction Labor Skilled 3.9 3.0/b 11.7 UnskiJled 9.0 0.77b 6.3 Equipmeint 11.6 1.3c 15.0 Materials 32.9 1.0 32.9 Cement 7.7 1.3 10.0 Steel 4.1 1.3 5.3 Timber 4.0 1.3/b 5.2 Bitumen 1.4 1.0 1.4 Fuel 5.0 1.0 5.0 Overheads 20.4 1.0 20.4

Total 100.0 113.2

Vehicle Operation (based on 4-ton truck, hilly terrain) Labor 7.7 1.0 7.7 Equipmentdepreciation 13.7 1.3 17.8 Fuel 39.5 1.0 39.5 Tires 7.9 1.0 7.9 Maintenance 25.6 1.7/d 42.7 Overheads 5.6 1.0 5.6

Total 100.0 121.2

/a Excludingmiscellanea.

/b Accordingto Peter Dittus, "EconomicPrices for Project Evaluation in China," January 1988.

/c Own estimates.

/d Based on 1/3 unskilled labor, 1/3 skilled labor and 1/3 spare parts. -50-

CHINA Table4.6

SHAANXIPROVINCIAL HIGHWAY PROJECT

VehicleOperating Cost Summary (1989)

( Yuan/000 Veh-ku ) 1/

Small Small Iedius Large Seoi- Seall Medium Large Car Truck Truck Truck Trailer Bus Bus Bus FlatTerrain: Goodcondition Rd. 225.3 225.3 313.6 427.7 890.0 358.6 523.7 944.9 Faircondition Rd. 281.6 281.6 392.0 534.6 1112.5 448.3 654.6 1181.1 Poorcondition Rd. 317.5 315.0 434.8 585.2 1202.7 560.3 721.4 1285.5

HillyTerrain: God conditionRd. 243.5 243.4 363.F 498.0 1077.6 395.2 608.2 1127.4 Faircondition Rd. 304.4 304.2 454.8 622.5 1347.0 494.0 760.2 1409.3 Poorcondition Rd. 343.2 340.3 504.5 681.4 1456.2 595.7 837.7 1533.8

MountainousTerrain: Goodcondition Rd. 288.6 312.7 441.3 604.7 1295.7 501.8 740.8 1363.7 Faircondition Rd. 360.8 390.9 551.6 755.9 1619.6 627.2 926.0 1704.6 Poorcondition Rd. 405.7 428.3 600.6 819.8 1738.4 735.5 1078.3 1940.8

Note: 1/Not adjusted vith conversion factors. 2/ VGCsof buses(2B, 40,and 60 passengerseats for small, medium, and large busesrespectively) include tiee valueof passengersat Y 0.31passenger-hour

Source:Mission estimates, based on Chinesebasic data. Table 4.7

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Sott", 19.0 kg, (O 'Lin En n.Sn Om - Z5.501 En 24.4n M - ".M

(14.01 12.00 112.0111 13.0 112.0) to." 410.01 1.30 411.141, 26 to 20.0 120.00) 24.0 174.0) 24.0 424.01 a." t2o.0 2.0 in.") Z 20:00 20.* (24.00) 24.0 (14,00 14.10 124.00) 20.00 44.6111) LIO (ILiss M 13.to 15.0 9-10 1.12 4.11 0.12 11.42 14.14) 19.90 LA f0.661 18.0 11.42 0.141 IL* 1.34 IL661 1.30 I.0111 ILM 14,01 4.46 O." 10.62 1.32 9.21 0.12 12.1? MIS 0.04 V.Q 9.11 I." IJ." 12.23 0.94 9.01 9.11 LO 2.09 14.32 Cast I A O'04 12.54 1.31, 0.25 0.12 14.47 14.0 U.04 11.51 ISM 0.04 14.41 14.43 0.94 U.51 11.54 2.32 14.is !QVS 0.04 14.00 LO 4.10 0.13 17.01 11.13 0.04 13.65 13.61 C04 11.07 11.03 0.04 13.0 IL61 2.36 It." r.-4 0.04 11.47 2.11 0.35 0.13 26.12 20.08 f.44 Ifi.10 16.06 0.04 RAZ 20.08 9.44 163111 16.06 2.12 U." 0.14 O." "It? L% 9.01 9.13 23-7? 13.41 6.94 IO." N.411 0.44 711.n 13.611 0.04 16-14 IL" 3.0 26.1b :0011 64 0.44 24.34 3.02 4.41 0.11 27.97 21.13 0.04 22.8 22.14 0.04 21.97 F." 0.04 n. 31 22.34 3.36 $1.2t .W " v.04 IL 13 MI 0.9 6.13 YLOO 57.16 -. 04 26.66 26.4 0.04 $3.0 U.96 0.44 26.411 26.16 1.63 :6.9 04. .".4 V." 43.92 4.14 0.61 9. Is 31." U." 9.0 11.11 31.14 0.04 X." if." 0.94 31.11 31.14 !.99 42.0 20,11 0.04 0.04 0.04 5-01 O-16 0-11 OL" 45-40 U-04 36A 36-ft 0.44 45.94 43.40 L44 36.75 *11 45.10 M 6.56 a.50 47 go 0.13 , 41 63 &,W 43 32 S6.V 6.50 54.11i 41.d 6.50 43-32 Wol 47.63 1.141 0.44 0.04 SS:," I I" :.-42 O. is N'S 63: " 9.04 51:06 51.02 0.04 63.111 6s," 0.04 31.06 51.02 63. 1, M #.44 O." 65-15 LZI 1.01 0.11 MIS ?5.11 0.04 0.20 ho. 16 0.0 15.3 15.21 0.04 0.21 60.16 73.21 ho D." 0.04 ?I.73 9. ?b 1.11 0.13 oLn 0.0 0.04 IO." TO." 0.04 IL73 IILAO 0.04 TO." IO." 0.0 ?M L04 0.04 903 11.53 1.22 0.93 104.63 $01.3011 O." C.10 93.66 O." tK43 IO1.W LO 83.10 BLU 104.9 MCI 0.04 0.44 101.11) 13.63 1.14 0.11 123.39 123.13 v.04 ILYI ".61 0.04 IZLSV 1=35 0.04 VLII OLO 123.33 9.04 O." 121.64 16.0 1.41 0,13 1U.SS 14S." 0.04 116.0 HL31 0.04 143.113 143.0 0.04 116.42 IILA 143.49 M 0 .4 LO ISO." 19.00 1.62 0.13 11145 171.61 0.04 131.12 137.211 O." 01.115 M.&I 0.04 137.2 137.2111 171.61 2010 4:-4 #.O4 111.12 n.44 LIS LIS 2M41 MAS 0. 'A 161.16 161.94 0.04 MAY 202.0 0.04 161.11 lit." W.43 7011 O." 6.04 110.n 26.10 Lot 0.11 218.61 131,8111 0.44 111.97 191.03 0.04 13LO1 239.0 9.64 111.07 101.03 ZU.00 loll 640 6.50 24L to 11.30 2. 16 0.11 291.17 M.I.? 6.50 vs." ZILTZ 6.W ni. n 2ILP 0.50 M-9 218.92 M.21

EFA 14.031 En ;4.261 M 27.301; Om 26.101 En 29.1111 E. CbMOW Plahl SOCtig" (Cifft 11. 14-4 0#1

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to - 20.6% tv - 16.022 too - Mail M - Ineft to - MISS,

9. Gral total M - n-M to - 25.2411 M - 24.6711 En - 27.5311

...... ------

I I, WI" ulateam C"t 4t I LOMAS W class I ad me I 1.0co'ke #W rAnt It reW ad wiliat UlgtUftt "201"ll rnn It rw1I d dW lft Of tgtd rod COM4011CUINCOU. 1.2, lecrftm in to to""Jo #Ktors. (.St IUI fawn at towAtL Table 4.8 -52-

CHINA

SHAANXI PROVINCIAL HIGHWAYPROJECT

Demographic and TransportNetwork Data for Shangluoand Ankang Prefectures,1986

Provincial total (1985) Shangluo Ankang

Population(million) 30.02 2.12 2.67

Area ('000 km2) 190.00 19.29 23.39

Per capita GOVAI (Yuan) 852.90 163.90 162.30

Road length ('000 km) 37.10 4.07 4.71

Transportnetwork density (km/'000km ) Highway 195.30 210.99 201.37 Railway 9.80 no railway Navigable inland waterway 3.60 no waterway

All weather roads ('000 km) 18.40 0.66 1.55

Share of all weather road to total road network (M) 49.60 16.22 32.91

Freight volume (million t-km) 1,994.00 127.49 102.61

Passengervolume (millionp-km) 3,756.00 423.49 224.50

Sources: StatisticalYearbook of ShaanxiProvince, 1986; and Shaanxi Provin- cial TransportDepartment. -.53-

CHINA Table4.9

SHAANXIPROVINCIAL HIGHWAY PROJECT PageI of 3

EconomicAnalysis of RuralRoad

A. Shangxian-ZhashuiRoad Parameters:

Roadlength (old) (km) = LO Roadlength (new) 129.9 (km) = LN Avelength diff. 50 (km) = LD VOCon oldroad 0.26 (YIt-km)= CO VOCon newroad 0.20 (Ylt-km)= CN Costdiff. 0.06 (Y/t-ka)= CD VOCtractor(O.Rd) 0.3 (Y/t-km)= CTO Costdiff(tract) 0.1 (Y/t-ka)= CDT

Tonnage(stand.vei4.00 (ton) = TV Loadfactor 0.644 = LF Averageload 2.576 (ton) = AL

(1)TCS due to shorterdistence = Trafficvoluent3651LDCOIAL (2)TCS due to roadimprovement = Trafficvolumnt36t$LNtCD$AL (3)Generated Traffic = TotalTCS I 0.15

Traf.Vol Cons.Cost DistanceSavings Rd.improvesentsaving Generated Net Ben. (AADT) ('OOOY) ('OOY) ('000Y) traffic ('OOOY) NormalConvert Normal Tractor Normal Tractor Grovthfr.tract Traffic convertedTraffic converted

1989 304 157 9045 -9045 1990 331 171 18090 -18090 1991 361 187 9045 -9045 1992 393 204 130 1202 718 2883 2487 1094 8254 1993 472 244 130 1441 861 3457 2982 1311 9922 1994 528 273 130 1614 964 3871 3340 1468 11129 1995 592 306 130 1808 1080 4336 3741 1645 12480 1996 627 325 130 1917 1145 4596 3965 1743 13236 1997 665 344 130 2032 1213 4872 4203 1848 14038 1998 705 365 130 2153 1286 5164 4455 1959 14888 1999 747 387 130 2283 1363 5474 4723 2076 15789 2000 792 410 130 2420 1445 5802 5006 2201 16744 2001 839 434 3618 2565 1532 6151 5306 2333 14269 2002 890 461 130 2719 1624 6520 5625 2473 18830 2003 943 488 130 2882 1721 6911 5962 2621 19968 2004 1000 517 130 3055 1824 7325 6320 2779 21173 2005 1060 549 130 3238 1934 7765 6699 2945 22451 2006 1123 581 130 3432 2050 8231 7101 3122 23807

IRR: 25 X -54- CHINA Table4.9 SHAANXIPROVINCIAL HIGHWAY PROJECT ------___------___---- ______--_--_----- Page2 Of 3

EconomicAnalysis of RuralRoads

9. Shangnan-JiepaiyaRoad Parameters:

Roadlength (old) (km) LO0 Roadlength (new) 105.5 (km) : LN Avelength diff. 20 (km) = LD VOCon oldroad 0.27 (Y/t-km)= CO VOCon newroad 0.20 (Y/t-ko)CN Costdiff. 0.07 (Y/t-ks)CD VOCtractor(O.rd) 0.3 (Y/t-ke)CTO Costdiffltrac.) 0.1 (Y/t-km)= CDT

Tonnage(stand.ve)4.00 (ton) TV Loadfactor 0.644 = LF Averageload 2.576 (ton) = AL

(I)TCS due to shorterdistence = TrafficvolumnM36UtLDCOSAL t2)Tcs dueto roadimprovement = TrafficvolumnMU36SLNICDUAL (3)6enerated Traffic : TotaltCS I 0.8

Traf.Vol Cons.Cost DistanceSavings Rd.isprovementsaving Generated Net Ben. (AADT) (tOOOY) (tOOOY) (lOOOY) traffic tOOOY) NormalConvert Normal Tractor Normal Tractor growthfr.tract Traffic convertedTraffic converted

1989 133 63 6793 6793 1990 145 69 13585 -13585 1991 158 75 6793 -6793 1992 190 82 106 241 115 1316 812 1987 4366 1993 207 98 106 262 138 1435 974 2247 4951 1994 231 110 106 294 155 1607 1090 2517 5557 1995 259 123 106 329 174 1800 1221 2819 6237 1996 275 130 106 349 184 1908 1294 2988 6617 1997 291 138 106 370 195 2022 1372 3167 7021 1998 309 147 106 392 207 2143 1454 3357 7448 1999 327 155 106 415 219 2272 1542 3559 7902 2000 347 165 106 440 232 2408 1634 3772 8382 2001 368 175 2717 467 246 2553 1732 3999 b280 2002 390 185 106 495 261 2706 1836 4238 9431 2003 413 196 106 524 277 2868 1946 4493 10003 2004 438 208 106 556 293 3041 2063 4762 10610 2005 464 220 106 589 311 3223 2187 5048 11253 2006 492 234 106 625 330 3416 2318 5351 11934

IRR 18x -55- CHINA Table4.9

SHAANXIPROVINCIAL HIGHWAY PROJECT Page3 of 3

Econosic Analysis of RuralRoad

C. Pingli-ZhenpingRoad Parameters: ______Roadlength (old) (kn) z L0 Roadlength (new) 59.5 (km) LN Avelength diff. 25 (kin) LD VOCon oldroad 0.3 (Ylt-km)- CO VOCon newroad 0.19 (Y/t-kg)= CN Costdiff. 0.115 (Y/t-ke)= CD VOCtractor(O.Rd) 0.35 CUt-km) CTO Costdiff(tract) 0.165 (Y/t-km)= CDT

Tonnage(stand.ve)4.00 (ton) = TV Loadfactor 0.644 = LF Averageload 2.576 (ton) = AL

(1)TCS due to shorterdistence = TrafficvolumntM35ILDCOMAL (2)TCS due to roadimprovement = Trafficvalumnl36LNtCD)AL (3)Generated Traffic : TotalTCS I 1.0

Traf.Vol Cons.Cost DistanceSavings Rd.improvementsaving Generated Net Ben. (AADT) (0OY) (OOOY) (000Y) traffic ('090Y) NormalConvert Noreal Tractor Normal Tractor 6rowthfr.tract Traffic convertedTraffic converted

1989 142 29 7175 -7175 1990 154 32 14350 -14350 1991 168 35 7175 -7175 1992 202 38 60 356 78 1298 349 2080 4101 1993 220 45 60 388 93 1415 418 2314 456E 1994 246 51 60 434 104 1584 468 2591 5123 1995 276 57 60 486 117 1775 525 2902 5745 1996 292 60 60 515 124 18B1 556 3076 6093 1997 310 64 60 546 131 1994 589 3261 6463 1998 329 68 60 579 139 2113 625 3457 6854 1999 348 72 60 614 148 2240 662 3664 7269 2000 369 76 60 651 156 2375 702 3884 7708 2001 391 81 2870 690 166 2517 744 4117 5364 2002 415 85 60 731 176 2668 789 4364 8669 2003 440 91 60 775 36 2828 836 4626 9192 2004 466 96 60 822 197 2998 886 4903 9747 2005 494 102 60 871 209 3178 940 5198 10336 2006 524 108 60 923 222 3369 9?% 5509 10959

IRR- 16%

_- -______------___ --__ --_____ - -____ ----____ -____ - -______--_ ---______-____ - 56 - ANNEX 1 Page 1

PEOPLES REPUBLIC OF CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

SHAANXI PROVINCIAL TRANSPORT DEPARTMENT

TERMS OF REFERENCE FOR CONSULTANT SERVICES FOR CONSTRUCTION SUPERVISION

I. INTRODUCTION

The Shaanxi Provincial Transport Department (SPTD) plans to construct a new 66.8-km highway (51.3 km of Class I and 15.5 km of Class II standards) between Sanyuan and Tongchuan. The project will comprise 4 civil works contracts. Accordingly, the SPTD will seek the services of qualified and experienced consultants to form part of a joint consultants/SPTD team to supervise the works. It is estimated that about 48 man-months of foreign consultant services will be needed.

II. OBJECTIVES

The purpose of the services is to ensure:

(a) that all civil, mechanical and electrical works are carried out in full compliance with specificationis;and

(b) that SPTD engineers on the joint supervision team are trained both formally and on-the-job in civil works supervision.

III. DEFINITIONS

In these Terms of Reference the following words shall have the meanings hereby assigned by them:

(a) Contractor: The construction firm(s) which the SPTD will contract with for the road construction.

(b) Contract: Contract to be agreed between the parties mentioned under (a) above.

(d) Engineer: , SPTD. - 57 - ANNEX 1 Page 2

(e) Resident Engineer: The engineer appointed by the Engineer in (d) above.

(f) Employer: The SPTD.

IV. SCOPE OF WORK

The consultantis to supervisethe Works and to approve the materialsand workmanshipof the Works. They will have no authority to relieve the Contractorof any of his duties or obligationsunder the Contract nor to order any work involvingdelays or any extra payment by the Employer without the consent of the Employer.

General Duties

(a) to decide on the Contractor'sapplication for sublettingparts of the Works, after prior consultationwith the Employer;

(b) to explain and/or adjust ambiguitiesand/or discrepanciesof Contract Documentsand to provide assistanceto the Employer in the settlementof disputes with the Contractor;

Cc) to approve the Contractor'sworking drawings and if necessary to issue further drawings and/or to give instructionsto the Contractor;

5d) to provide data for the settingout of the Works;

(e) to approve or to disapprovethe Contractor'ssuperintendence, key personneland/or constructionprogram, materialsand/or sources of materials;

(f) to control and appraise the progress of the Works, to order if required the suspensionof the Works, and/or to determine the amount of extensionof the period for completionof the Works after prior consultationand agreementwith the Employer;

(g) to issue variationorders, to evaluate variations,to fix rates for unpriced Works, to order day-worksand/or to decide on alternatives, provided that such measures will not increase the total cortract price by more than 5Z;

(h) to prepare and issue certificatesof payment to the Contractorand to certify the completionof the Works or parts thereof;

(i) to inspectthe Works during and/or after the MaintenancePeriod and to issue the MaintenanceCertificate;

Ci) to inspect the performanceof the Works with regard to worksmanship and compliancewith the Specificationsand to order, superviseor perform tests on materialsand/or Works before covering up and to approve or disapprovethe Contractorsplant and equipment; - 58 - ANNEX1 Page 3

(k) to order if required the uncoveringof completedWorks and/or the removal and substitutionof impropermaterials and/or Works;

(1) to check systematicallythe progress of the Works and to order the initiationof certain Works which are part of the Contract;

(m) to examine and attend the measurementof any work which is about to be covered up or put out of view before permanentwork is placed thereonand/or to examine and attend the measurementof the completedWorks;

(n) to check the Contractor'saccounts, invoices,claims and other statementswith respect to arithmeticalerrors and compliancewith the Contractand if required,to make correctionsthereof;

(o) to supervisethe Contractorin all matt3rs concerningsafety and care of Works and if required to request from the Contractorthe necessarylights, guards, fencing, and watching; and

(p) to carry out such duties under the terms of the Contract as may from time to time be delegated in writing by the Engineer.

The Consultantshall prepare and imp>ementall the administrative systems and proceduresneeded td ensure the effective supervisionof the Works in accordancewith the scope of work outlined above and with generally accepted internationalstandards.

Training

The Consultantshall prepare a detailed training program for the engineersassigned by SPTD to the joint supervisoryteams. The program should cover both formal and informal (on-the-job)training in construction supervisionand specifically:

(a) the organizationand administrationof the supervisionof the road Contract;

(b) quality control and testing to ensure compliancewith specifications; and

(c) preparationof systemsand proceduresfor recordingprogress, quality control testing, costs, variationsor extra works, progress etc.

Staffing

The Consultantshall provide the requisitenumber of supervisory staff to the joint supervisionteam who will be resident on the projectand who will be responsiblefor the overall supervisionof the Contractor's operations. Additionalpersonnel such as inspectors,surveyors, and soil techniciansshall either be provided by the SPTD or be hired locally by the - 59 - ANNEX1 Page 4

Consultant. The number of experiencedand qualifiedstaff for the work involvedshall be sufficientto meet the requirementsof the project. The Consultant'sstaff should be graduate engineersor equivalentwith a least 12 years practicalsite experienceon major road works in the followingfields; supervisionand administrationof major road contracts, tunnel construction structuralengineering including foundations, pavement design and construction includingearthworks, drainage, soils and materials engineeringetc.

The Consultantshall purchase all equipment,office materials, instrumentsand similar appurtenancehe feels required over and above that furnishedby the Contractor. The Contractor shall furnish the Consultant vehicles completewith maintenance,cost of operationand operators. A field laboratorywith the required equipment to carry out field materials testing shall be furnishedby the ConstructionContractor. Operationsand maintenance cost of all equipmentexcept vehicles shall be the responsibilityof the Consultant.

Controlof the Work

The Consultant shall establishall P.I.'s and Bench Marks on the ground. The Consultantsshall supervisethe initial engineeringstakeout to establishline and grade, setting stakes for alignmentand structures,and check and verify subsequentstakeout control by field survey parties supplied by the Contractorto ensure satisfactorycontrol of the work.

They shall submit for review and approval by the SPTD necessary changes, improvementson the drawings, specif-cationsand other work in reasonabletime to permit compliancewith the design and construction schedule.

They shall, however, make minor cnanges in grade or alignment as are necessary to balance quantities,changes in size and skew of culverts etc., the extent of changes in alignment and grade the Consultantis permitted to make without prior authorityapproval shall be 1.5 km in a continuous measurement.

Material Inspectionand Control

The Consultant shall carry out all test sampling in the field and perform such tests as can be made in the Field Laboratoryprovided by the Contractorto maintain quality control. Other inspectionand testing of materialsand finished articles to be incorporatedin the work may be made by the Consultantor by a competentand acceptableindependent inspection agency subject to the authorizationand approval of the SPTD and of no cost to the Consultant. The Consultantshall notify the Contractorof any defects in his work and if necessary,stop operationsconcerned with the defectivework until the defects are corrected.

Measurementand Payment

The Consultantshall make field measurementsof quantitiesof materialsincorporated in the project and maintain up-to-datebooks containing - 60 - ANNEX 1 Page 5

such computationsor other informationconcerning the use of construction materials,properly segrated into sectionsof construction.

Periodic reports shall be prepared and transmittedto the SPTD showing quantitiesincorporated in the work at the end of the each pay period, and also showingmonies earned by and due the contractor.

The Consultantshall maintain up-to-daterecords of remaining quantitiesto be incorporatedin the work, the cost estimatesrelating thereto broken down into foreign and local currency components.

Claims and Arbitration

The Consultantshall review claims which the Contractormay present for additionalcompensation and/or additionaltime allowancesand recommend appropriateaction; perform change orders as necessaryduring the progress of the work to cover possible changes within the general scope of the constructioncontract. The Consultantwill evaluate the Contractor's requirementfor payment and will certify the request or cause to have it changed so that it can be certified.

The Consultantshall give his decisionRon all claims and accounts, all questions,disputes, and differenceswhich under the terms of the Contract are left for his settlementand decisionsand shall aid and assist the SPTD in dealingwith all other claims and accounts,disputes and differencesrelating to the works..

The Consultant shall assist and advise the SPTD with regard to any matter or thing which may be the subject of arbitration,inquiry or litigation and if an when required by the SPTD he shall attend and give supporting evidenceand otherwiseassist the SPTD before any court or in any arbitration or at any inquirydealing with any matters arising from or in connectionwith the executionof the works.

The supportingevidence should contain sufficientinformation to reveal 'thenature of the Contractor'scomplaint, circumstances pertaining thereto,and the substanceof any commitmentsmade by either party in this regard. A thorough coverage of the Contractor'soperations relative to the work in question should be maintained in the Daily Project Dairy. Comments coveringequipment and/or materialswhich may be involved,progress maintained,should be included.

In the event of any arbitrationor litigation if the Consultant is called upon to assist before a Board of Arbitrationproceedings or before a court of Law he shall receive separate renumerationfor his assistance in the trial and finalizationof the case. _61- ANNEX 1 Page 6

V. RECORDSAND REPORTS

The Consultantshall maintain records of deviationsor changes from the contract plans, and provide one marked-upmaster set of drawings in such manner that the original plans can be correctedby others to correspondwith the "As Built" conditions.

The Consultantshall provide all required services for certificationsof the project in accordancewith the World Bank Loan Agreement and subsequentletters of implementation.He shall:

(a) prepare and/or assist the SPTD in preparingperiodic progress and financial status reports, and prepare a final report on the project;

(b) provide certificationwhere required by the SPTD for interimand final payments;

(c) provide the SPTD with such technicaland engineeringconsultation required in its day-to-dayactivities pertainingto the project, as may be requested;

(d) keep records of all work done in the engineeringand construction phases of the work and make an activity and progress report for each month of operation;

(e) prepare estimated progress schedule report prior to beginningthe engineeringwork for the engineeringphase; and

(f) keep record of all payments approved and report such in the regular monthly report. The regularmonthly report will be made as of the end of each calendarmonth and will contain three sections:

ti) descriptionof activities(with photographs)

(ii) progress chart

(iii) expenditurerecord.

These three sectionswill be correlatedwith the estimatedactivity and progress schedules. The report will be signed by the Consultantand fifteen copies submittedto the SPTD. Two copies will be forwardedto the InternationalBank for Reconstructionand Development(World Bank). -62 - ANNEX 2 Page 1

SHAANXI HIGHWAYDATA BANK PREPARATION. PAVEMENTEVALUATION AND STRENGTHENINGPROGRAM AND MAINTENANCEMANAGEMENT STUDY

Terms of Reference

I. INTRODUCTION

1. The total length of the highway network in Shaanxi Province is 37,668 km of which about 13,600 or 362 are all-weatherwith a bituminousor gravel surface. About 7,500 km of the paved road network is showing signs of distress under the increasingtraffic and need urgent strengthening. Further- more, in recent years the ProvincialTransport Department (PTD) has faced increasingproblems and costs in maintainingits road network due both to substandardand aging pavements and to the growingheavy vehicle traffic volumes.

2. Therefore the PTD proposes to evaluate the conditionof the paved roads in order to prepare a strengtheningprogram and to review the organizational and operationalaspects of its paved road maintenancewith a view to bringing them up to date as necessary. Accordingly,to preserve the asset value representedby the existinghighway network and to provide for the efficient and safe movement of traffic, the PTD has decided to carry out the followingstudy.

II. OBJECTIVES

3. The study aims at (a) establishinga provincial road data base compa- tible with national guidelines,comprising an inventoryof permanent features and current conditionsof existing paved roads; (b) beginning regularmonitoring of the current conditionof paved roads; (c) identifyingpavement overlay and strengtheningneeds and resource requirementsfor about 7,500 km of paved roads; and (d) pilot implementationof a maintenanceplanning and management system, compatiblewith national guidelines,to enable a systematicapproach to maintenanceprogramming.

4. As an urgent first phase under (b) above, the study will identify the overlay and strengtheningneeds of roads adjacent to, or connectingwith, the proposed new San Yuan-Tongchuanhighway.

III. SCOPE OF STUDY

A. General

5. The study team shall perform all field investigations,engineering studies, cost estimates,economic and financialanalyses, and systems design, as required to obtain the objectivesgiven in the preceding Section II. - 63 - ANNEX 2 Page 2

B. Scope of Work

6. The project will consist of three parts of what will ultimatelybe an integrated road management system. The parts will be carried out concurrently:

Part I: Developmentand pilot implementationof a basic provincialroad data base, compatiblewith both the proposed national road data bank and provincialneeds, and comprisingan inventoryof permanent features,road condition and traffic characteristics. The system should comprise basic items initially,provide for regular updating and permit future expansion.

Part II: Selection and pilot implementationof a paved road management model to serve as a tool for preparingmaintenance programs. The model should analyze the provincial road data base; identifymaintenance needs in accordancewith specifiedintervention criteria; rank the needs by economic return; permit interactiverefinement of the resultantwork program to satisfy budget and other considerations;and be consistentwith national MOC recommendations.

Part III: Review and implementa pavement evaluationmethod for obtaining data needed for the preparationof detailed road improvementand strengtheningprograms. The method should utilize physical measures of pavement strength,condition and traffic that are compatibleboth with the new HOC deflection-basedrehabilitation design method and also with the national road data bank and the provincialroad management system.

Part IV: Make preliminaryevaluations of a 5-year policy and program for the paved network, the impact of current and future traffic loading levels, the need for capacity improvements,and institutionalissues.

7. To this end, the study team shall:

(a) Prepare a current inventoryof the entire paved road network in the province comprising:

(i) A road features inventory,including identification of road class, route number, province,maintenance district, maintenance section, and section length;construction history and construction details (types and widths of pavement and shoulder, gradient,curvature, drainage, terrain); traffic history; regional freezing index and averageprecipitation.

(ii) A traffic inventoryfor the network, includingtraffic counts by vehicle type at selected points on the network, and load data of heavy vehicles (as the data become available from (b) below or other sources).

(iii) A road conditionsurvey, based on a simple, rapid inspection method (such as drive-over,or sampling)to assess the approxi- mate levels of pavement roughness (see AttachmentA), pavement distress, shoulder conditionand drainage condition. -64 - ANNEX 2 Page 3

(b) Review and implement the method of pavement evaluation,based on the researchwork of the MOC's Highway ScientificResearch Institute,for the identificationand design of road improvementand strengthening works; and conduct evaluationof a designatedsample of paved roads includingthe following:

(i) Select and implementa physical method of measuring road roughness in standard units of the internationalroughness index (IRI), and conduct roughnessmeasurements on the sample roads.

(ii) Assess pavement strengthand constructioncharacteristics on the sample roads through standard surface deflectionand other tests as required for the design and evaluationof rehabilitation.

(iii) Select and implementimproved methods for traffic counting by vehicle class and for sample weighing of heavy vehicle axles, and conduct surveysat selected stations representingthe sample roads.

(iv) Consider modifying (ii) above to be undertakenin two stages for roads unlikely to be scheduledfor treatmentwithin the first two-year period, namely an immediatepreliminary assessment derived form a small sample of measurementsfollowed by a later detailed assessmentconducted shortly before the scheduledtime of treatment.

(c) Establish a provincialroad data base for the storage of, and access to, data collectedunder (a), and (b) above; and provide guidelines for the collection,capture, audit and reportingof all items, in accordancewith national recommendations.

(d) Review national recommendationsand implement,on a pilot scale, a system for the managementof road maintenanceand improvement, including regularmonitoring of the network, updating of the data base and preparationof work programs. Evaluate the staffing and costs of implementingthe system and expandingthe scope to unpaved and local roads and bridges,'staffing and cost.

(e) Prepare an indicativemedium-term policy and program for the paved network, based on an analysis 1/ of data collectedunder items (a) and (b) above, and recommending:

(i) a strategy for the allocationof budget resources to new constructionimprovement and maintenanceworks;

(ii) appropriateintervention criteria for identifyingimprovement and maintenanceworks;

(iii) a five-yearprogram for improvementand strengtheningworks;

1/ Preferably,an availableroad policy evaluationmodel, such as HDM III, RTIM2, etc. should be used for the analysis. - 65 - ANNEX 2 Page 4

(iv) estimatedexpenditures for the five-yearperiod; and

(v) the estimatedimpact of the program on the network in terms of physical condition and economic benefits.

(f) provide advice on PTD on the implicationsfrom:

(i) an evaluationof the axle load survey results, the impact on deteriorationof the network and possible control measures for vehicle loading;

(ii) an evaluationof the need for bus parking bays, traffic turning bays, climbing or overtaking lanes, and acceleration/decelera- tion lanes, includingestimates of costs; and

(iii) an evaluationof the present maintenanceorganization at provincial level, recommendingorganizational changes or improvements.

8. Throughout the program outlined above the study team shall prepare lists of specializedequipment, includingcomputer hardware and software, required for the work togetherwith specificationsand bid documentsand shall assist the PTD in the evaluationof bids or quotationsand award of contracts.

C. Follow-upto the Study

9. When the study has been completedthe PTD will continuallyupdate the detailed road inventoryand expand its scope to include local roads using its personnelwho have been trained through their work during the study.

10. Since the detailed condition inventorywill form a substantialpart of the activity to prepare engineeringdesigns for pavement improvementworks, the PTD must proceed with the inventoryof the network at such a rate that the establishedimprovement may be implementedwithout interruptiondue to a lack of designs.

11. The PTD may require additional services from foreign experts during the follow-upphase of the study in order to implementthe new system andlor to expedite the detailed pavement conditioninventory over the whole road network of the province.

IV. STAFF REQUIREDAND REPORTS TO BE SUBMITTED

A. Staff

12. The study will be completed in about 15 months with a total of about 80 man-months including about 12 man-months of foreign expertise to train local engineersin the field of pavement evaluationand management systems, data base management and engineeringand data processing. Additional man- months of foreign techniciansor engineersmight be consideredfor using auto- mated equipment for road conditionassessment, adapting foreign computer programs to computersavailable in China and for training Chinese counterpart staff. - 66 - ANNEX 2 Page 5

B. Reports

13. The Study Team will be required to submit the followingreports in Chinese (Mandarin)and English languages:

(a) inceptionreport after 2 months of start-up;

(b) progress report monthly;

(d) draft final report after 14 months; and

(e) final report after 15 months.

V. FACILITIESAND SERVICES TO BE PROVIDED BY THE GOVERNMENT

14. The PTD will assign a certain number of its personnel to work on the Study Team on a iull-timebasis. The detail regar ing the number, qualifica- tion etc. for persons for such assignmentswill be determined on the basis of the scope of work described in Section III.

15. The PTD and the foreign experts will work out and agree on a list of the facilitiesneeded and the specializedequipment needed will be provided by the foreign experts under their contract with the PTD on the basis of such a list presentedon the consultants'proposal. 67- - Attachment A

FUNCTIONALDESCRIPTIONS OF MONITORING EQUIPMENT

A. Road RoughnessMeter

Functional Purpose. The meter makes standardizationmeasurements of road surface roughness,while travellingat highway speeds. Roughness causes wear in a moving vehicle thus raising the operatingcosts, and influences riding comfort, vehicle speed and safety. Large economic benefits are derived from the reductionof roughness. Standardizationis achieved by calibrating the instrumentedvehicle to the InternationalRoughness Index (IRI) over selected road sections;the IRI is determinedfrom the longitudinalsurface- profile of the sections using a profilingmethod. : Brief Specificationsand Estimates

(a) roughnesssensor with automaticreadout $10,000 - 20,000 and recording,custom-mounted in client's ($30,000 - 60,000) survey vehicle (or: suppliedcomplete in independenttrailer);

(b) road profile measuring device, for calibra- $5,000 - 7,000 tion of roughnessmeter or surface level ($15,000 - 20,000 tolerancemeasurement (or: TRRL beam profilometer) - 68 - ANNEX 3 Page 1 of 2

CHINA

SHAANXI PROVINCIAL HIGHWAYPROJECT

Project Implementation Schedule

Inplementation Start Complete

Part A - Highway Construction - Prequalification of contractors including Bank review 04/01/88 05/15/88 - Bid period 07/15/88 10/15/88 - Receive and open bids, evaluation and receipt by Bank of copy of Evaluation Report and Government recommendations 06/15/88 12/31/88 - Appoint supervision staff 08/01/88 10/01/88 - Select consultants for organization of supervision of works and award contracts 10/01/88 02/01/88 - Construction of highway 02/01/89 02/01/91

Part B - Rural Roads - Prepare specifications and bills of quantities and submit for Bank review 06/10/88 09/10/88 - Sign construction agreements 10/01/88 12/31/88

Part C - Provision of Specialized Equipment for Pavement Evaluation - Prepare, with consultant assistance, equipment lists, specifications and bid documents for Bank review 03/01/89 06/30/89 - Invite bids 07/01/89 07/31/89 - Evaluate bids 08/01/89 08/15/89 - Review by Bank of evaluation report and recommendations for award 08/16/89 09/16/89 - Award contracts 09/20/89 - - Delivery of equipment 12/01/89 12/31/89 - 69 - ANNEX 3 Page 2 of 2

Implementation Start Complete

Part D - Provision of Laboratory Equipments for SPTD Vocational Training School - Prepare, with consultant assistance, equipment lists, specifications and bid documents for Bank review 03/01/89 06/30/89 - Invite bids 07/01/89 08/31/89 - Evaluate bids 09/01/89 09/30/89 - Review by Bank of evaluation report and recommendations for award 10/01/89 10/30/89 - Award contracts 11/15/89 - - Delivery of equipment 03/15/90 04/15/90

Part E - Road Data Bank - Preparation of system 06/01/88 12/31/88 - Collection of data 01/01/89 06/30/90 - Preparation of software 01/01/89 06/30/90 - Identification of hardware needs 12/31/88 - Preparation of specifications and bid documents for computer systems 06/01/89 08/31/89 - Invite bids 09/01/89 10/31/89 - Evaluate bids 11/01/89 12/31/89 - Review by Bank 01/01/90 03/31/90 - Award contracts 04/01/90 - - Testing and delivery 06/01/90 07/01/90

Part F - Consulting Services - Assistance in supervision and training for construction supervision 02/01/89 02/01/91 - Assistance in pavement evaluation and preparation of a pavement strengthening and betterment program including equipment procurement 03/01/89 10/31/89 - Assistance in setting up a road data bank including equipment procurement 01/01/89 06/01/90 - Assistance in training SPTD staff via studies, seminars and workshops 11/01/88 12/31/90

Part G - Staff Training - Selection of trainees 11/01/88 12/31/88 - Placement of trainees 01/01/89 12/31/90 -70 - ANNEX 4 Page 1 of 2

CHINA

SRAANXI PROVINCIAL HIGHWAY PROJECT

Project Monitoring Indices

Actual as Reason for Action Esti- 2 of difference to be Project component mated Actual estimated (if any) taken

Highway Construction Contract awards Earthworks completed (m3 ) Paving completed (km) Culverts (number) Bridges (number) Construction work completed Maintenance certificate issued Completion certificates issued Final cost

Rural Roads Construction Construction agreements signed Construction (km) Culverts (numbers) Bridges (numbers) Construction completed

Supervision of Construction (man-months)

Consultant Services Supervision of Construction Consultants selected Consultants start work Supervision organization, procedures and systems agreed by SPTD and Bank Supervision staff appointed Office and laboratory buildings constructed Laboratory equipment in place Supervision of construction in progress - '-1 ANNEX 4 Page 2 of 2

Actual as Reason for Action Esti- X of difference to be Project component mated Actual estimated (if any) taken

Pavement Evaluation/ Road Data Bank Consultants selected Consultants start work Preparation of system Collection of data Software preparation Identify hardware Preparation of specification and bid document for computer system Invite bids Evaluate bids Award contracts Test hardware and software Delivery

Paved Road Strengthening Consultants selected Consultants start work Identify equipment Prepare specifications and bid documents Invite bids Evaluate bids Award contracts Equipment delivery l~~~~~~~~~~ - 72- ANNEX 5

CHINA

SHAANXI PROVINCIAL HIGHWAY PROJECT

Selected Documents and Data Available in the Project File

A. General Reports

A.1 CHINA: Long-Term Development Issues and Options, World Bank, September 1985

A.2 Statistical Yearbook of China, 1984, State Statistical Bureau, Pac.

A.3 Statistical Yearbook of Shaanxi Province, 1986

B. General Reports and Studies on the Sector or Subsector

B.1 CHINA: Long-Term Development Issues and Options, Annex 6: The Transport Sector, World Bank, September 1985

B.2 Transport Sector Paper, December 10, 1984, AEPTR

B.3 Basic Data on the Chinese Highway Subsector - Answers to Questions (Chinese with English translation)

C. General Reports and Studies Relating to the Project

C.1 Sanyuan-Tongchuan Highway Project. Feasibility Study Report, Shaanxi Provincial Transport Department, December 1986

C.2 Rural Road Feasibility Reports for: - Shangxian-Zhashui road, - Shangnan-Jiepaiya road, and - Pingli-Zhenping road. Shaanxi Provincial Transport Department, January 1988

C.3 Feasibility Reports on the Repair of Flood Damage to Rural Roads: - Zehe-Manchuan road, and - Shangxian-Shagao road. Shaanxi Provincial Transport Department, January 1988

C.4 Environmental Protection Report on the Sanyuan-Tongchuan Highway Construction, Shaanxi Provincial Transport Department, January 1988 Chart 1

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