Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00004604
IMPLEMENTATION COMPLETION AND RESULTS REPORT P117656
ON A
LOAN Public Disclosure Authorized IN THE AMOUNT OF $300 MILLION
TO THE
PEOPLE’S REPUBLIC OF CHINA
FOR A China: Kunming Urban Rail Project
Public Disclosure Authorized December 28, 2018
Transport Global Practice East Asia And Pacific Region Public Disclosure Authorized
CURRENCY EQUIVALENTS
Renminbi (RMB) Chinese Currency Unit = yuan RMB6.60 = US$1
FISCAL YEAR July 1 - June 30
Regional Vice President: Victoria Kwakwa Country Director: Bert Hofman Senior Global Practice Director: Guangzhe Chen Practice Manager: Binyam Reja Task Team Leader(s): Antoine Kunth, Yi Yang ICR Main Contributor: Mathilde Lebrand
ABBREVIATIONS AND ACRONYMS
AFC Automatic Fare Collection ATO Automatic Train Operation ATP Automatic Train Protection ATS Automatic Train Supervision BRT Bus-Rapid Transit CPS Country Partnership Strategy DRC Development and Reform Commission EMU Electric Multiple Unit FAR Floor-Area-Ratio GDP Gross Domestic Product ICT Information and Communication Technologies ICB International Competitive Bidding KBC Kunming Bus Company KRTC Kunming Rail Transit Company KRTGC Kunming Rail Transit Group Co. KRTC Kunming Rail Transport Company ltd LVC Land Value Capture M&E Monitoring and Evaluation MTR Mid-Term review NCB National Competitive Bidding PAD Project Appraisal Document PDO Project Development Objective PAP Project-Affected People RMB Renminbi SDG Sustainable Development Goals TA Technical Assistance TBM Tunnel Boring Machine TOD Transit-Oriented Development WRI World Resources Institute
TABLE OF CONTENTS
DATA SHEET ...... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ...... 5 A. CONTEXT AT APPRAISAL ...... 5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION ...... 7 II. OUTCOME ...... 10 A. RELEVANCE OF PDOs ...... 10 B. ACHIEVEMENT OF PDOs (EFFICACY) ...... 12 C. EFFICIENCY ...... 16 D. JUSTIFICATION OF OVERALL OUTCOME RATING ...... 19 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ...... 19 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ...... 20 B. KEY FACTORS DURING IMPLEMENTATION ...... 22 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 23 A. QUALITY OF MONITORING AND EVALUATION (M&E) ...... 23 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ...... 23 C. BANK PERFORMANCE ...... 25 D. RISK TO DEVELOPMENT OUTCOME ...... 27 V. LESSONS AND RECOMMENDATIONS ...... 28 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ...... 30 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ...... 42 ANNEX 3. PROJECT COST BY COMPONENT ...... 44 ANNEX 4. EFFICIENCY ANALYSIS ...... 45 Economic and social context ...... 45 Project implementation ...... 46 Project outcomes ...... 47 Revised economic evaluation results ...... 47 Sensitivity test ...... 48 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 49 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ...... 50 The World Bank China: Kunming Urban Rail Project (P117656)
DATA SHEET
BASIC INFORMATION
Product Information Project ID Project Name
P117656 China: Kunming Urban Rail Project
Country Financing Instrument
China Investment Project Financing
Original EA Category Revised EA Category
Full Assessment (A) Full Assessment (A)
Organizations
Borrower Implementing Agency
International Department, Ministry of Finance Kunming Rail Transit Group Co., Ltd.
Project Development Objective (PDO)
Original PDO To support compact, transit-oriented urban development by providing high quality, integrated public transport on the East-West Line3 corridor.
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The World Bank China: Kunming Urban Rail Project (P117656)
FINANCING
Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing
300,000,000 276,926,592 276,926,592 IBRD-80370 Total 300,000,000 276,926,592 276,926,592
Non-World Bank Financing Borrower/Recipient 1,411,600,000 1,542,400,000 1,527,000,000 Total 1,411,600,000 1,542,400,000 1,527,000,000 Total Project Cost 1,711,600,000 1,819,326,592 1,803,926,592
KEY DATES
Approval Effectiveness MTR Review Original Closing Actual Closing 10-May-2011 19-Oct-2011 27-Oct-2014 30-Nov-2016 30-Jun-2018
RESTRUCTURING AND/OR ADDITIONAL FINANCING
Date(s) Amount Disbursed (US$M) Key Revisions 23-Nov-2015 92.19 Change in Implementing Agency Change in Results Framework Change in Loan Closing Date(s) Change in Disbursements Arrangements Change in Institutional Arrangements Change in Implementation Schedule
KEY RATINGS
Outcome Bank Performance M&E Quality Satisfactory Satisfactory Modest
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RATINGS OF PROJECT PERFORMANCE IN ISRs
Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 22-Sep-2011 Satisfactory Satisfactory 0
02 12-Nov-2012 Satisfactory Satisfactory 16.00
03 25-Jun-2013 Satisfactory Satisfactory 16.00
04 18-Dec-2013 Satisfactory Moderately Satisfactory 30.07
05 22-Apr-2014 Moderately Satisfactory Moderately Satisfactory 30.07
06 26-Nov-2014 Moderately Satisfactory Moderately Satisfactory 56.12
07 24-Apr-2015 Moderately Satisfactory Moderately Satisfactory 78.22
08 29-Nov-2015 Moderately Satisfactory Moderately Satisfactory 92.19
09 28-May-2016 Moderately Satisfactory Moderately Satisfactory 144.87
10 01-Dec-2016 Moderately Satisfactory Moderately Satisfactory 171.31
11 01-Jun-2017 Moderately Satisfactory Satisfactory 214.88
12 07-Dec-2017 Satisfactory Satisfactory 233.60
13 28-Jun-2018 Satisfactory Satisfactory 297.92
SECTORS AND THEMES
Sectors Major Sector/Sector (%)
Transportation 100 Urban Transport 99 Public Administration - Transportation 1
Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Urban and Rural Development 100
Urban Development 100
Urban Infrastructure and Service Delivery 100
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Environment and Natural Resource Management 100
Climate change 100
Mitigation 100
ADM STAFF
Role At Approval At ICR
Regional Vice President: James W. Adams Victoria Kwakwa
Country Director: Klaus Rohland Bert Hofman
Senior Global Practice Director: Jose Luis Irigoyen Guangzhe Chen
Practice Manager: Ede Jorge Ijjasz-Vasquez Binyam Reja
Task Team Leader(s): Shomik Raj Mehndiratta Antoine Avedis Kunth, Yi Yang
ICR Contributing Author: Mathilde Sylvie Maria Lebrand
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I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES
A. CONTEXT AT APPRAISAL
Context
1. With rapid urbanization and rising incomes, in the 2000s traffic congestion became a growing concern for China’s main cities. In that context, the government was looking at options to develop higher quality public transport systems. A focus on urban rail had the potential to deliver significant social, economic and environmental benefits, including lower levels of congestion, air pollution, and greenhouse gas (GHG) emissions; fewer traffic-related fatalities; increased mobility and accessibility for low income populations; and increased use of complementary means of non-motorized transport. As a result, urban rail development was prioritized in the development of first to third tier cities’ urban transport development over the period 2005-2015. By January of 2010, 10 cities were already operating metros on 870 kilometers of total track, while 23 cities had approved metro plans for a total track length of 5,148 km.
2. The project was consistent with the World Bank Group 2006-10 Country Partnership Strategy (CPS) for China which sought, among other objectives, to improve the competitiveness of the various regions of China, and to address the needs of disadvantaged groups and underdeveloped areas through financing infrastructure. Specifically, the project supported the objectives of: (i) promoting balanced urbanization; (ii) reducing poverty, inequality, and social exclusion; and (iii) financing sustainable and efficient growth. The objectives of the project were also expected to be consistent with the new CPS for 2011-2015, which were prepared in 2011 in alignment with China’s 12th Five Year Plan. In addition, as a major public transport infrastructure project, the project was consistent with the Bank’s transport strategy of focusing on ‘safe, clean, affordable’ transport services to serve as anchors for development. The project also supported urban infrastructure development which at appraisal became a priority for Government. The project also supported the implementation of the State Council Directive regarding “priority for public transport”, the “People First” initiative, and the development of low-carbon compact cities. 3. In this national context, Kunming was chosen for a pilot urban rail project in China to receive support from the Government and the Bank, given its sustained support to public transport and its location in one of the poorest Western provinces of China. Although it was one of the first cities in China to implement a network of bus priority corridors, the city had been facing challenges related to rapidly growing motor vehicle traffic. Kunming had kept expanding and growing in the previous decade. At the time of project preparation, the municipality had an estimated population of 5.7 million (with about 3 million residing in the central city area), one million motor vehicles, and 3,000 buses. With the rapid growth of the city’s extent, population and motorization, the city had planned, and gained approval for, a large investment in urban rail. 4. The Kunming Urban Rail Project was the first metro project financed by the World Bank in China. The necessary large capital expenditure for urban rail (between $60 to $100 million per km) justified a prudent approach by the government to apply strict criteria in prioritizing urban rail investments. The government was interested in receiving technical support and funding from the Bank to learn from good international practice to enhance urban planning, in particular through Transit Oriented Development (TOD) and bus/rail and cycling integration, and thereby maximize the benefits derived from investments. The government agreed that this would require integration between different modes and operators in terms of planning, operations and fare policy.
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Theory of Change (Results Chain)
5. The theory of change depicts how the different activities contributed to reaching the final outcomes of the project, and their long-term effects for the city of Kunming. The result framework as included in the part mixed outcome and output indicators.
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Project Development Objectives (PDOs)
6. The PDO as outlined in the Project Appraisal Document was to support compact, transit-oriented urban development by providing high quality, integrated public transport on the East-West Line 3 corridor. The PDO comprised the following elements: a high-level goal to promote compact and transit-oriented development; and the means to support this goal through the provision of high-quality urban rail and multi-modal integration. The second element of the PDO, focusing on high quality integrated public transport on the East-West Line 3 corridor, was measurable at the end of project implementation and at the time of this ICR preparation. However, support to compact transit-oriented urban development is a longer-time outcome for which the project contributed, but the outcome will only materialize in the medium term and will be measurable at that time.
Key Expected Outcomes and Outcome Indicators
7. At appraisal, the key project indicators were:
- Provision of high quality transit service (measured by improved travel time in the corridor on public transport modes, and the use of the system by riders with access to automobile);
- Development of an integrated public transport system with bus and rail operating as a single system (measured by the provision of space for bus interchange facilities at stations, the restructuring of bus routes to complement the metro system, and a single I/C card for fare payment on both networks);
- Project cost effectiveness (measured by daily ridership and the working ratio of line 3).
- Achievement of compact city development (as measured by the percentage of new development that occurs within walking distance of the new system).
Components
8. The project had the following three components linked to the Project Development Objective and key indicators:
- Component 1. Civil Works ($209.4 M): Carrying out a program of civil works for selected stations, including inter alia, bus interchange and bike parking facilities, where appropriate, and associated facilities such as, but not limited to, depots and track, equipment installation, and other related installation at selected stations.
- Component 2. Equipment ($86.9 M): Provision of various equipment such as, but not limited to, power supply, escalators, fare collection, and communication systems, and technological equipment at depot and other related facilities.
- Component 3. Technical Assistance and Capacity Building ($3.0 M): Provision of: (i) studies to support bus-rail integration and the future development and construction of the public transport system; and (ii) support for Project management capacity building and for operations management.
B. SIGNIFICANT CHANGES DURING IMPLEMENTATION
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Revised PDOs and Outcome Targets 10. The PDO was not revised although PDO indicators were revised as discussed below.
Revised PDO Indicators
11. The 2015 restructuring updated the Results Framework: of the seven initial indicators, three were revised and four were dropped, as shown below and discussed in the following paragraphs.
Status PDO/Outcome Indicator Name REVISED 1 Peak period travel time from Shi Zui station site to Xiaoximen along Line 3 REVISED 2 Peak period travel time from East Long-Distance Bus Terminal to NanPin Walking Street along Line 3 DELETED 3 Percentage of public transport riders who have access to a private car for their commute REVISED 4 Average Daily Weekday Ridership on Line 3 after 1 year of operation DELETED 5 Successful multi-modal integration with buses, and cycles DELETED 6 Percentage of total new development that occurs along rail lines. DELETED 7 Working Ratio of the Kunming Rail Transit Company Line 3
NEW 10 User satisfaction NEW 11 Average daily weekday ridership on Line 3 after 6 months of operations NEW 12 On-time performance NEW 13 FAR along Line 3 relative to district FAR in terms of new development
12. Revision of PDO Indicators. Indicators 1 and 2 that measure travel time between two pairs of locations (Shi Zui station site to Xiaoximen for indicator 1, East Long-Distance Bus Terminal to NanPin Walking Street for indicator 2) were revised. The new baseline and new target only incorporated travel time instead of a division between waiting time/travel time/transit time. They were also adjusted to meet the new implementation schedule. Indicator 4, which measures the “Average Daily Weekday Ridership on Line 3 after 1 year of operation” was revised as monitoring a full year of operations was not considered necessary to assess quality of operations; as a result, the measurement period was reduced to six months, and the target was adjusted from 200,000 to 150,000, based on observed demand of Line 1 (that had opened in 2015).
13. Deletion of PDO Indicators. Indicator 3, which measured “the percentage of public transport riders who have access to a private car for their commute”, was dropped as the project had no control over whether passengers owned cars or not. It was replaced by user satisfaction (based on project funded surveys conducted by an independent party).
14. Indicator 6, which measured the “percentage of total new development that occurs along rail lines”, was considered to be beyond control of the implementing agency (KRTC did not have control over the level of urban development around stations and along the Line) and inadequate to evaluate the impact of the project on compact city development (because of its methodology and its timing). Further, most real estate development spurred by Line
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3 had occurred prior to the commencement of construction and given that the baseline was determined in 2008, initial targets were achieved prior to commencement of operations. Indicator 6 was replaced by indicator 13 to measure “floor-area-ratio (FAR) along Line 3 relative to district FAR in terms of new development”, as changes in FAR more accurately reflect the concept of compact development. This is the only indicator that assesses the achievement of the PDO element “support compact and transit-oriented urban development”. While this indicator reflects compact development, changes in FAR along the Line are not fully attributable to the project and therefore can only partially measure progress in this regard. (It is worth noting that this first of a series of urban rail project supported by the Bank in China was followed by urban rail projects in Nanchang and Zhengzhou1 which drew lessons from the project regarding the use of indicators. While TOD and integration remained essential project components, the PDO indicators of these ensuing projects focused on measurable direct benefits to users.)
15. Indicator 7, which measured the “Working Ratio of the Kunming Rail Transit Company Line 3”, was not considered realistic and was dropped. Only two metro systems worldwide had ever achieved the original working ratio (operating costs over revenue) target of less than 1. Indicator 12 to measure on-time performance was added to assess the quality of the system
Status Intermediate Outputs Indicator Name Component 1: Civil Works DELETED 1 Bus/Rail integration: land allocated for bus, cycle, and car facilities at stations as identified in integration facilities report DELETED 2 Bus/Rail Integration: Identified - bus/bike facilities constructed NO CHANGE 3 Bus/Rail integration: bus routes restructured to support integrated public transport as per the results of the route restructuring report NEW 4 Number of km track built NEW 5 Number of stations built NEW 6 Number of stations with bus/bicycle facilities within 50m of an exit Component 2: Equipment NO CHANGE 7 Bus/Rail integration: shared I/C card for both rail and bus use
16. Intermediate Output Indicators. Two intermediate output indicators were deleted, two remained similar and three were added. Indicators 1 and 2 were dropped (as the Rail Company did not have control over the level of urban development around stations and limited authority over integration with other modes) replaced by indicator 6 to quantify integration. Indicators 4 and 5, measuring the number of km track built and the number of stations built, were added to better quantify the progress of civil works.
Revised Components 17. The components were not revised.
Nanchang Urban Rail Project (P132154) (approved in 2013), and Zhengzhou Urban Rail Project (P128919) (approved in 2014) both are currently under implementation.
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Other Changes
18. Design changes. As per the original design included in the Feasibility Study Report, the total length of the line was 19.54 km (underground line: 14.70 km and elevated line and ground line: 4.84 km). During detailed design the total length of the line was revised from 19.54 km to 19.158 km, of which underground line and transition segment are 17.99 km and elevated line is 1.17 km. One station was adjusted from elevated mode to underground line mode. The number of stations was reduced from 19 to 17. At five stations, some changes in layout and location were called for to take care of features such as gas pipe line, electrical power circuits, addition of an exit, etc. The procurement of a Rail Grinding machine was replaced with the procurement of a Rail Milling train that has a higher efficiency, lower cost for long-term use, and causes lower environment pollution.
19. Restructuring. As discussed earlier, the 2015 restructuring modified the results framework. In addition, all activities were moved back by about 1.5 years from their original schedule because of construction delays caused in part by the parallel construction of Lines 1 and 2, as well as resettlement delays. Project institutional arrangements needed to be modified due to the restructuring of the implementing agency, Kunming Rail Transit Company (KRTC), which changed its name to Kunming Rail Transit Group Co., Ltd (KRTGC) and established four subsidiaries.
Rationale for Changes and Their Implication on the Original Theory of Change 20. The previous paragraphs provide the rationale for the changes in the result framework. These changes had no adverse effects on the PDO and the original theory of change remained valid.
II. OUTCOME
A. RELEVANCE OF PDOs
Assessment of Relevance of PDOs and Rating
21. The PDO remains highly relevant to China’s development agenda. The 13th Five-Year Plan for economic and social development (2016-2020) built on the previous Five-Year Plans and the National Plan on New Urbanization (2014–2020) to spur economic growth through innovation, coordination, green development, openness and sharing. The 13th Five-Year Plan called for coordinated development, especially by integrating land use with urban transport development, to create more compact and livable cities. It also called for green development, highlighting the need for accelerating the development of mass transit, such as urban rail and bus rapid transit (BRT), to build an integrated low-carbon urban transport system.
22. The PDO is also highly consistent with Kunming’s new masterplan and urban development priorities. Kunming’s Masterplan (2011-2020), approved by the State Council in 2016, sets out the urban development directions for the city. It aims at achieving a people-oriented, efficient and competitive city through coordinated and sustainable development, and specifically highlights: (i) curtailing urban sprawl and promoting compact growth; (ii) building an efficient and high-quality public transport network with urban rail plus BRT as the backbone; and (iii) establishing an integrated multi-modal transport system and achieving seamless transfers between modes.
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23. In addition, the PDO remains consistent with the World Bank Group’s China country partnership strategy. The PDOs are in line with the Bank Group’s 2013-2016 Country Partnership Strategy (CPS) for China, which focuses on three main themes: supporting greener growth, promoting more inclusive development, and advancing mutually beneficial relations with the world. The CPS has not been updated since then. The project supported strategic theme one, “supporting greener growth”, and strategic theme two “promoting more inclusive development”. Promoting compact city growth through high-quality public transportation and multi-modal integration was key to implement urban planning schemes that support greener growth at the city level. Increasing density around stations and improving land use between residential and commercial needs reduce travel distance and therefore supports greener growth. Multi-modal integration increases the number of inhabitants that can benefit from the metro, and also supports the use of other means of public transport, such as buses or bicycles. Supporting an efficient, integrated and inter-connected urban transport infrastructure network contributed to overall economic and social development and aimed at promoting inclusive growth through higher mobility to access services and jobs within the city. Lower transport costs tend to support the creation of jobs and to connect employees with employers. The “integration” and “TOD” aspects in the PDO are being further pursued in later transport and urban projects in China, including the Nanchang Urban Rail Project (P132156), the Zhengzhou Urban Rail Project (P128919) and the GEF Sustainable Cities Integrated Approach Pilot (P156507).
24. The PDO is also consistent with the Sustainable Mobility for All (Sum4All) initiative, a new and strategic global partnership that supports the implementation of SDGs in the transport sector. Sum4All promotes equitable, efficient and safe mobility as well as green mobility. The PDO supports all fours aspects of Sum4All through high quality urban rail and multi-modal integration that supports compact and transit-oriented urban development.
25. Relevance of PDO is rated High. As outlined above, the PDO remains highly relevant to China’s priorities and the Bank’s development strategies.
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B. ACHIEVEMENT OF PDOs (EFFICACY)
Assessment of Achievement of Each Objective/Outcome
26. The objective of the project was to support compact, transit-oriented urban development by providing high quality, integrated public transport on the East-West Line 3 corridor. Project achievements can be assessed by direct outcomes on (i) high-quality urban rail, (ii) integration of public transport, and its support to (iii) compact and transit- oriented urban development.
27. High quality. The project provided two types of intermediary outputs to deliver a high-quality urban rail: civil works and equipment. At project closure, a high-quality metro system was built, which includes 17 stations and 19.2 km of track work, although 19 stations were included in the initial plan. Compared to the target at project approval, all stations and track have been built as planned from the Shizui Depot to the Fangmaqiao Parking Yard, with the track length slightly shorter than the original length of 19.54 km as a result of alignment optimizations in design. Construction of Kunming Metro Line 3 is in line with international standards and a high-quality urban rail has been successfully achieved. The Bank contributed to this achievement through financing stations and track, power supply system, safety systems, passenger information system, and fare collection system. Station, track, signaling and communication systems were designed to current international standards to achieve a high level of service quality. The signaling system uses moving block automatic control, automatic train protection (ATP), automatic train operation (ATO) and automatic train supervision (ATS) sub-systems. These features ensure high level of train safety and reliability. Line 3 operates modern, energy efficient, air-conditioned EMU trains at a maximum speed of 80 km/h. Trains have regenerative braking system to conserve energy. The train ride is smooth and comfortable, signifying that tracks have been laid and maintained to high quality standards and that trains are of good design. The stations are air-conditioned, and are equipped with escalators, elevators and ramps to ensure universal access for all passengers including the disabled and the elderly.
Picture 1. Quality design of the Kunming metro line 3
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28. Line 3 provides high quality transit service, as evidenced by significantly reduced travel time, excellent service reliability and very high user satisfaction. Several relevant outcome indicators are used to assess the “high quality” aspect of the project (See Section I.B). Travel time from Shi Zui station site to Xiaoximen along Line 3 was reduced from 43 minutes as per the 2010 baseline, to 14 minutes in 2018. Travel time from Eastern Long-Distance Bus Terminal to NanPin Walking Street along Line 3 was reduced from 38 minutes in 2010, to 15 minutes in 2018. Line 3’s punctuality performance is 99.99 percent, i.e., above the initial target of 98 percent. Ridership was 153,800 passengers per weekday after six months of operation, and is expected to reach 160,000 by the end of 2018; these exceed the target of 150,000 passengers. User satisfaction reached 91.2 percent, which is above the initial target. KRTC conducted a user satisfaction survey in 2017 for Kunming’s Metro Line 1, Line 2, Line 3, Line 6 and Chenggong branch line, covering 57 stations. The survey results showed a satisfaction score of 9.12 points on Line 3, which was higher than the other Lines financed domestically, e.g., Line 2 scored 8.89 points and Line 6 scored 9 points. Overall, all outcomes linked to the provision of a high-quality urban rail have been fully achieved.
29. Integration. Line 3 was designed to be integrated with multiple modes of urban transport such as buses, other metro lines and non-motorized transport. The project supported technical assistance to address integration: (i) ensuring that station designs incorporates the land required for physical interchanges (bus, bike, walk, etc.), based on the projected traffic per station; (ii) the development of an integrated fare policy in 2012; (iii) the development of a city-wide public transport integration plan in 2013; and (iv) the development of a Bus-Rail Integration Plan for
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Line 3 in 2017. The project used three intermediary outputs/outcomes to measure achievement integration: provision of physical interchange facilities, introduction of integrated fare payment and restructuring of bus routes.
30. At project closure, most physical interchange facilities have been completed. There were 13 metro stations with bus/bicycle facilities within 50 meters of an exit from the 17 project stations. Notably, a multi-modal interchange was built at the Eastern Passenger Station, which provides seamless transfer with Line 6 that goes to the airport and the Eastern Bus Terminal, where multiple intercity coach services interchange with local bus services. Bike parking facilities were built around stations, as shown in the picture below. Nonetheless, provision of physical integration facilities was delayed at four metro stations, due to: the low occupancy rate in the western part has slowed integration; and road construction has not yet been completed and sidewalks are missing at some stations in the Eastern part.
Picture 2. Typical bicycle parking at station’s entrance
31. Kunming successfully introduced an integrated fare payment system with contactless transit cards across all public transport modes, including metros, buses and taxis. Line 3 is equipped with modern facilities, including an
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automatic fare collection (AFC) system that adopts the contactless transit card. Transfer discounts between metro and buses are under discussion.
32. Upon the opening of metro Line 3, the Transport Bureau issued a Bus-Rail Integration Plan for Line 3 for implementation by KRTC and Kunming Bus Company (KBC). The implementation plan includes reorganization of existing bus routes, introduction of new feeder services, optimization and relocation of bus stops, construction of bus depots and terminals, and the installation of bus information signs in metro stations. The plan involves some quick wins as well as more complex elements, and as such is being implemented gradually. The ultimate goal is to have bus and rail networks to complement, rather than compete with each other. As of August 2017, there were 74 bus lines that intersect with Metro Line 3, and 67 bus lines that run parallel to Line 3. So far, 27 bus lines have been restructured to remove overlapping sections by adjusting bus routes, reducing the frequency of operation, or canceling bus lines competing with Line 3. Twelve feeder lines have been newly opened to expand coverage to metro stations. While road rehabilitation is ongoing or planned, temporary bus stops have been installed at all metro stations and new permanent bus stops and bus bays are being introduced gradually as road works progress. More importantly, through the implementation of the project, Kunming has strengthened collaboration between the Transport Bureau, KBC and KRTC to promote integration. While bus-rail integration was carried out in an ad hoc manner for Line 1 and Line 2, the project Line 3 introduced a working mechanism among the relevant agencies to discuss integration issues during implementation and prepare integration plans prior to the opening of Line 3. This working mechanism is being continued in other metro lines that Kunming is now implementing. Overall, outcomes linked to the provision of an integrated public transport system have been substantially achieved.
33. Compact and transit-oriented urban development. The project provided the transport conditions to support compact and transit-oriented urban development (TOD) in Kunming. Compact city with TOD is an urban planning concept to promote articulated density along mass transit corridors with mixed land use (residential, commercial, etc.) It relies on an efficient public transport system and is characterized by a layout that encourages walking and cycling. The high-quality service offered by Line 3 and the integration of Line 3 with the existing public transport system and non-motorized transport is conducive to compact urban development.
34. Regarding land use and urban planning, support to compact urban development was provided through technical assistance studies and capacity building activities. No intermediary indicator was designed to monitor the advancement of the project towards this objective. Nonetheless, the project supported several trainings, workshops2 and study tours34 on TOD not only for KRTC, but also for relevant municipal agencies, including the planning bureau, the land resources bureau, the Municipal Construction Bureau, and the Development and Reform Commission (DRC). In addition, KRTC and its property development subsidiary conducted TOD studies and land value analyses regularly along the Line 3 alignment and engaged in policy dialogue with the municipal planning and land authorities through the project platform. The project also prepared TOD designs for key nodes along Line 3 with support from the World Resources Institute (WRI). In 2017 the Municipal Construction Bureau endorsed the TOD design for improving accessibility, safety, convenience, and attractiveness of the area around Dongfeng Station, an interchange station between Line 3 and Line 1. Such endorsement by the Construction Bureau means that TOD is likely to be implemented. The initial designs may be used as a basis for standard design guidelines and programming ideas for
2 KRTC have participated in the annual China Rail TOD Conference co-organized by the World Bank since 2016. 3 KRTC and Kunming DRC visited Sweden and Finland in 2016 to exchange knowledge with the local metro companies on metro construction management, financing and commercial development around stations. 4 KRTC and officials from the Mayor’s Office, planning bureau and transport bureau conducted a TOD study tour to Washington DC, New York and Seoul to learn integrated land use and transport planning, land value capture and complete street design.
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station areas around other Kunming Metro Stations.
35. Implementation of TOD is determined by Kunming municipality’s urban development plans and policies, which are beyond the scope and duration of the project. Due to the changes in national policies on land administration in early 2010s and a change in leadership in Kunming in 2015, the TOD originally planned for Shizui Depot5 has been canceled, and real estate development programs in the eastern ends around Dashuying, Jinmasi, Taipingcun, and Hongqiao stations have been postponed, given the current unfavorable real estate market conditions6. While there is also a slow-down in development along the western end, development priority - in line with the TOD principles - has been given to areas along Line 3. In the middle section of Line 3, between Liang Jla He and Da Shu Ying stations, significant re-development has taken place around stations to create pedestrianized shopping streets, develop high- rise commercial complexes, and dense residential areas. Overall, while development around the eastern Line 3 stations is affected by the policy guidelines in the near term, Kunming assesses that development will continue along the middle and western ends of the line.
36. In the long-term, both high-quality rail transit and multimodal integration contribute to urban compactness, albeit their direct short-term impacts on land use changes are difficult to measure. In the results framework, compact development is proxied by the floor-area-ratio (FAR) along the Western part of Line 3 in Xishan District. In China, the municipal planning bureau reviews and approves the FAR for each new development in accordance with the city’s masterplan. At the end of the project, the FAR was 1.6 times higher along Line 3 than in the rest of the district, which indicates that the city has encouraged more and higher density developments along Line 3. Growing urban density along the mass transit corridor can be correlated to TOD and compact development, although it is arguable that the project may only have contributed partially to this outcome. Nonetheless, the project clearly supports compact development and TOD, and the outcomes from these long-term processes is expected in the years to come. Therefore, supporting compact and transit-oriented urban development have been substantially achieved.
Justification of Overall Efficacy Rating
37. Based on the discussion on service quality, integration, and compact and transit oriented development, the efficacy of the project is rated as Substantial.
C. EFFICIENCY
Assessment of Efficiency and Rating
38. At closure, a cost benefit analysis was carried out using the same methodology used at appraisal. The coverage of the economic analysis is the project investment on Line 3 (project components 1 and 2), which accounts for 99
5 After project approval, KRTC developed a TOD proposal in 2013-2014 to build a deck above the Shizui Depot for commercial development including residential compounds, shopping centers and office buildings. Due to political environment changes in 2015, this proposal was cancelled, and the design reverted back to the depot design as originally approved by the Bank. 6 Postponement of TOD implementation to a more favorable time i.e. when market conditions will be met is relevant, as demonstrated through good practices of TOD in cities such as London or Singapore.
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percent of project costs. The costs related to the analysis are construction costs and the maintenance costs for the evaluation period (30 years). Project benefits quantified in the economic analysis are the same as at appraisal:
The change in user benefits for passengers transferring to the metro; this is a combination of travel time savings, net of any change in fares, together with any changes in interchanges, headways and service frequencies. Changes in the operating costs of urban transport, i.e., the cost of the metro, net of the change in the cost of operating the urban bus network, as well as the operating costs of car users who also transfer to transit. Changes in the external costs of the urban transport system, which included the benefits of improved road safety, reduced congestion, air pollution, noise and GHG emission.
39. Economic and social context. The economic efficiency was reevaluated taking into account changes in the economic and social context: new population, employment, and GDP projections; and the introduction of a ramp-up period. The difference in projected populations was used to adjust the projection of demand for urban passenger travel in Kunming. The impact of this change was to reduce the EIRR by one percentage point. Employment projections were not changed and there is no additional impact on the estimated EIRR above that attributable to the lower population projections. The estimated value of time savings is one of the main expected benefits of the Project, and this estimate depends on assumptions on the value of individual time savings. Higher GDP projections were to increase the EIRR by 0.3 percentage points. A common feature of new transport infrastructure is that users need time to become aware of its advantages and to adjust their behavior accordingly. This has the effect of bringing the demand in year four to about the same as was assumed for the first year in the original evaluation. Assuming a ramp up period and that the demand is not permanently reduced based on the first-year level of demand of only 153,800 restores about 0.2 percentage points to the EIRR.
40. Project implementation. Changes in the economic evaluation come from changes in construction costs, their re- scheduling, the delayed opening date, the increase in metro fare, the lack of commercial development at stations, and the restructuring of bus routes. Only US$2 million of the initial loan was not utilized during project implementation. Several stations were redesigned, but the changes were not substantial and do not affect the economic impacts. The time extension of 18 months was due to resettlement issues and mostly to minimize disruptions in the city, given other ongoing transport projects. This additional time was taken to ensure good implementation of resettlement and the good quality of final outcomes. The impact of slightly higher construction costs, due to the adjustment of prices, was to reduce EIRR by 0.3 percent points. Early in the construction period there were delays. So as not to delay the opening date longer than necessary despite these interruptions, construction expenditure was speeded up so that a higher proportion then planned occurred in the later part of the construction period. This rescheduling of expenditure has been taken into account in the economic re-evaluation. Delaying investment in construction has the impact of increasing the EIRR by 0.4 percentage points. The original economic evaluation assumed that Line 3 would become operational in 2015, whereas Line 3 opened only in August 2017, i.e., about 18 months late. The delayed opening reduced EIRR by 0.2 percentage points. The slightly higher metro fare has the effect of reducing the EIRR by 0.1 percentage point. The original economic evaluation was based on the understanding that there would be significant commercial development at the downtown stations and at those at the eastern end of the Line, resulting in more passengers using Line 3. Some of the station and depot developments have been cancelled or postponed, although there has been high development along the corridor as a whole, as reflected in the higher FAR than in other parts of Xishan District. It is estimated that despite this positive outcome, cancelling
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the TOD originally planned for Shizui Depot7, and postponing development at the eastern end of Line 3 reduced the EIRR by about 0.1 percentage points. The lack of complete restructuring of bus routes to act as feeders to the metro has been taken into account in the re-evaluation by a reduction in the number of Line 3 passengers for its first three years of operation, from when the feeder services are assumed to be operating. This has the impact of reducing the EIRR by 0.2 percentage points.
41. Travel time. The monitoring of travel time on Line 3 showed lower transit times than had been assumed in the original economic evaluation. Not only does this lead to a greater time saving by the Line 3 passengers, it will also attract more passengers to Line 3 from other transport modes. The estimated impact on the EIRR of these two outcomes is an increase of 0.4 percentage points.
42. Results of the Ex-Post Economic Analysis. Table 2 summarizes the results of the ex-post economic analysis. The project Economic Internal Rate of Return (EIRR) at ICR stage is 7.9 percent, about 0.6 percentage point lower than estimated at appraisal. Slightly different project achievements, implementation schedule changes, and the changed economic and social context compared to estimates at appraisal, are the reasons for the 0.6 percentage point difference.
Table 2: Results of Ex-Post Economic Analysis
Changed parameter from original Percentage Resulting economic evaluation points change EIRR Original EIRR from Appraisal 8.5 Economic and social context Lower population growth -1.0 7.5 Higher GDP growth 0.3 7.8 Allow ramp up period 0.2 8.0 Project implementation Higher CAPEX -0.3 7.7 Rescheduled investment 0.4 8.1 Delayed opening date -0.2 7.9 Higher metro fare -0.1 7.8 Less commercial development at stations -0.1 7.7 Fewer bike facilities at stations 0.0 7.7 Delayed bus route restructuring -0.2 7.5 Project outcome Higher time saving benefits 0.4 7.9 Revised EIRR 7.9
7 After project approval, KRTC developed a TOD proposal in 2013-2014 to build a deck above the Shizui Depot for commercial development including residential compounds, shopping centers and office buildings. Due to political environment changes in 2015, this proposal was cancelled, and the design reverted back to the depot design as originally approved by the Bank.
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43. The cost benefit analysis at ICR does not include several ‘wider economic benefits’ from the project: better accessibility and compact city growth. Better accessibility can promote interconnection between residential and employment areas and social facilities (schools, hospitals, etc.). Over the long term, compact urban growth can substantially reduce the energy intensity and greenhouse gas emissions of urban areas. Analytical methods to estimate the extent of these wider economic benefits are still at relatively early stages of development8 and have not yet progressed far enough to be incorporated into quantitative evaluation of the project.
D. JUSTIFICATION OF OVERALL OUTCOME RATING
44. Based on the rating of relevance as High, and efficacy efficiency as Substantial, the overall outcome of the project is rated Satisfactory.
E. OTHER OUTCOMES AND IMPACTS (IF ANY)
Gender 45. A recent Bank survey on travel characteristics of residents in Wuhan and Urumqi found that women are more inclined to choose walking and using public transport, while men are more likely to opt for private car or taxi. Safety ranks highest among both genders, however, when “time-saving” and “safety” conflict with each other, men are more likely to sacrifice safety in pursuit of efficiency. Women, on the other hand, take the opposite approach. For example, over 70 percent of women in Wuhan and Urumqi are afraid to go to less frequented streets, underpasses, and remote bus stations. According to the results of passenger satisfaction survey, Line 3 receives high ratings in safety and security aspects. The success of this project in providing a high quality public transport system with a focus on system safety and service reliability supports women’s needs.
Institutional Strengthening 46. The project helped strengthen the capacity of urban transport agencies and improved cooperation between agencies. Activities directly financed by the project (including training, studies, overseas tours and knowledge exchanges) have improved management practices and understanding of urban planning notions such as compact city development, transit-oriented transport and land-value capture. They aimed to bring together urban development planning agencies and transport agencies to start working on having a good public transport network as a pillar for long term compact urban development. A few examples of capacity building activities completed are: 220 persons completed the Southwest Jiaotong University technical backbone training; operation management training for 400- 500 people in KRTC; and centralized construction management ability and resource management ability promotion learning.
47. Project preparation and project implementation have enhanced cooperation between different agencies, which was key to the success of this project and forms the basis for further implementation of compact city growth and transit-oriented development. More specifically, rail/bus integration required the bus company to adjust its lines and
8 A recent World Bank publication described some of the analytical techniques that are being developed. So far these mostly apply to trade corridors rather than urban transport projects.
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schedules to be complementary to the new metro lines. Agencies in charge of land use restrictions and land planning regulations were also involved in project preparation to forecast and implement changes in land use around the stations. A program of "Introducing intellectuals into enterprises" was discussed to deepen the knowledge exchange between the railway company and educational and research institutions.
Mobilizing Private Sector Financing
48. This project did not involve the private sector, hence, mobilizing private sector financing does not apply.
Poverty Reduction and Shared Prosperity 49. A high quality public transport system with affordable service brings benefits to the poor. Poor people’s inability to access jobs and services is an important element of social exclusion that defines urban poverty. Overall better transport infrastructure improves connectivity and accessibility to services and economic opportunities, and hence contributes to economic growth and poverty reduction. Line 3 has lowered commuting time and is a relatively cheap commute option, which already benefited a large share of city commuters. In addition, Line 3, like all the other metro lines in Kunming, offers discounted fares for special groups (such as students) and free service for individuals older than 70 years. However, the lack of indicators on poverty reduction or shared property does not allow a better assessment of the project’s impacts in these two areas.
Other Unintended Outcomes and Impacts
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME
A. KEY FACTORS DURING PREPARATION
50. Assessment of feasibility. The feasibility report and design for Kunming Metro Line 3 were carried out by China Second Railway Design Institute, which was experienced in designing similar projects. The feasibility study mainly focused on the engineering, construction and procurement aspects of the project.
51. Assessment of project design. Project design was considered realistic, as lessons learned from previous projects were incorporated in the design. Kunming Urban Rail Project was among the first projects in China to support and help promote TOD in an urban rail project. The Government’s choice of Kunming for this project was motivated, inter alia, by the importance of density in a geographically-constrained city and the pre-existing importance of public transport in the city.
52. Lessons from previous global and regional experiences had been discussed during project preparation. For instance, results in American cities had been mixed, mostly because urban rail development took place after rapid urban growth supported by automobiles and could not mold urban development any more. On the other hand, the controlled coordination of urban development and urban transport in Hong Kong SAR, China and Singapore ensured the success of urban rail. Kunming was assessed to be a mixture of both situations, hence the importance in theory to have an entity that coordinates urban transport with urban planning to promote compact city development. While the Kunming municipality had nominal control over the agencies at stake (the rail company, the planning bureau, the transport bureau, and the bus companies), the limits of coordination in practice were
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acknowledged during preparation. Land development responsibilities were to be handed over to the rail company to promote the combination of urban development and urban transport. While in the case of Hong Kong SAR, China and Singapore this choice had been successful, in the case of Kunming, such cooperation did not progress as successfully as expected at appraisal. In order to address these issues during project preparation, three project elements had been introduced: (i) capacity building on best practice urban design and transit-oriented development; (ii) project focus on a few stations to foster the use of non-motorized modes to access stations; and (iii) the design of an indicator to monitor compact city growth. As discussed earlier, during the 2015 restructuring the compact city indicator was found to be beyond control of the implementing agency and was inadequate to quantify the impact of the project’s achievements on urban design. A simpler index was chosen to evaluate the impact on population density along Line 3.
53. Potential issues related to rail/bus integration were identified during project preparation. Institutional issues deriving from the separation and the lack of integration between the rail and bus companies were factored in the project scope, which included: (i) a study to develop a fare policy; (ii) initial efforts to ensure that station designs incorporate land for physical interchanges; and (iii) several metrics to evaluate the bus/rail integration. Later, as part of the 2015 restructuring, several of these metrics were dropped and replaced by simpler indexes that could more adequately evaluate project implementation progress.
54. Assessment of risks. Analysis of risks during project preparation and their mitigation were overall appropriate. The overall risk rating was Substantial/High. Specific risks identified as High or Substantial included those linked to the realization of compact growth, the realization of rail ridership due to poor integration with buses and cycles, and financial sustainability and economic returns. The realization of compact growth was correctly rated as Substantial, given the risks around the need for the rail company to ensure that it was able to deliver high quality TOD. Three project elements were included in the design to mitigate this issue: capacity building on good practices for urban design and TOD, funding of station infrastructure, and an indicator to monitor compact city growth. The last of these was removed during the 2015 restructuring as it was difficult to monitor, would not reflect advancement of the project, and was beyond the control of KRTC.
55. The risk related to the lack of integration with buses and cycles was correctly rated during preparation as Substantial, given the lack of institutional cooperation between agencies. The project established mitigation measures to address the risks around rail-bus integration with efforts to identify land to allow for rail integration with buses and cycles. Several project elements were included: a study to develop a fare policy, focus on station design, and several indicators to quantify the implementation of an integrated bus-rail system. These indicators were initially designed to measure the land and number of facilities allocated for integration.
56. During the implementation, the project established mitigation measures to address risks identified around compact growth development, including improvement of capacity building through studies and field visits. Such visits and the engagement in cooperation with academic institutions were aimed at helping KRTC complement the construction of the rail infrastructure with efficient multi-modal integration and land use policies to promote compact city growth.
57. Fiduciary and procurement risks were adequately identified. However the project would have benefited from a more conservative assessment of the potential social safeguards risks associated with construction, given the common resettlement challenges at the time in a number of similar infrastructure projects. The assessment of
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social safeguards risks was however optimistic (rated low) during project preparation and during the first two years of project implementation.
B. KEY FACTORS DURING IMPLEMENTATION
58. Delay in Project Implementation. The main reasons for the delay in carrying out construction were: (i) cumulative impacts on traffic flow caused by the concurrent construction of three metro lines in the city; and (ii) problems encountered in relocation of about 600 households from the site between Jinmasi and Dashuying stations. Kunming decided to defer the commencement of Line 3 construction by 1.5 years so as to allow station construction of Line 1 and 2 to be completed. In addition, as per the original design, the tunnel between Jinmasi and Dashuying stations was to be constructed by using a Tunnel Boring Machine (TBM). However, during the detailed survey of the site it was noted that the geological condition and the old age of buildings would not permit tunneling by TBM and it was decided to adopt cut-and-cover process that required dismantling several buildings. The relocation of households living in these buildings took more than two years, resulting in the delayed construction at this site.
59. Midterm review The Midterm Review (MTR), conducted in October 2014, rated the project implementation progress as Moderately Satisfactory. The need for restructuring the project was agreed, given that construction progress was delayed by about 1.5 years due to the changes in the metro construction program, and changes in technology which generated resettlement issues (but were resolved in the meantime). The results indicators had to be revised to meet the new implementation schedule and to more accurately and efficiently reflect achievement of the project development objectives.
60. The MTR also noted an increase of 12 percent in the overall project cost for Line 3. A large portion of this increase was to be attributed to an early change in project design that was undertaken prior to Appraisal, where four above-ground stations (not financed by the loan) were converted to underground stations. In addition, the redesign of the loan-financed Shizui Depot had led to a cost increase from US$40.2 million to US$64.0 million. Difficulties in reaching agreement with affected persons kept delaying the full implementation of resettlement plans. Two new TA proposals were agreed to be included in the Bank project – one for optimizing materials management, which would improve the cost efficiency and the quality of system construction and maintenance, and the other for improving passenger satisfaction survey methods.
61. Change in city planning environment. Changes in the city planning environment influenced the PDO objective of supporting compact TOD development. In 2015, there was a change in leadership in Kunming, with a new appointed mayor, whose objective was to curtail the previously unchecked rapid development and expansion of Kunming, in part by reconsidering the efficacy of the land use plan and development proposals. Given that the initial design of the project was based on the city urban plans, these adjustments had negative implications for urban development around the stations of the project. For example, the TOD originally planned for Shizui Depot was canceled, real estate development programs around the stations on which the project had focused (Dashuying, Jinmasi, Taipingcun, and Hongqiao stations) were postponed, and the bus terminal adjacent to Liangjiahe Station was slated for relocation. These changes did not affect the construction of the metro per se, but rather the short- term outcomes of transit-oriented development and compact city development around urban rail. Given that these developments only affected a small portion of Line 3, the overall objectives were still achieved.
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IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME
A. QUALITY OF MONITORING AND EVALUATION (M&E)
M&E Design
62. Although the original PDO level indicators and Intermediate indicators were incorrectly presented in the PAD, the M&E framework is reviewed based on the discussion described in Section 1 B. The M&E framework for the project included seven PDO level indicators and four intermediate indicators to project outcomes at the PDO level and at the intermediate outcome level. As discussed earlier in Section I B, four PDO level indicators were dropped, the remaining three PDO level indicators were adjusted to reflect the new implementation schedule, and three new PDO level indicators were added to better evaluate PDO level outcomes. In the case of intermediate indicators, two were retained and two others were dropped. Three new intermediary indicators were added to better quantify the construction of the rail and of the stations. Baselines were established at the beginning of the project and the implementing agency (KRTC) was assigned the responsibility for implementing the M&E.
M&E Implementation
63. M&E was implemented adequately. KRTC carried out data collection regularly and consistently tracked and reported on the revised indicators. After the opening of Line 3, KRTC has tracked ridership on Line 3 on an on-going basis and has carried out a user satisfaction survey at the end of 2017 and in 2018.
M&E Utilization
64. The M&E information was used to monitor the progress of project implementation and the achievement of the PDO. The user satisfaction survey results have also been used for improving service on Line 3. However, the lack of an indicator to measure support to integration and compact development made it difficult to track progress on integration and affected the dialogue with Kunming on the need to speed up integration between Line 3 and the bus systems.
Justification of Overall Rating of Quality of M&E
65. While M&E implementation and utilization were acceptable, the overall quality of M&E is rated Modest because of the deficiencies in the initial design of the M&E framework.
B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE
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66. Environmental Safeguards. This project was classified as Category A due to the scale of civil works and potential environmental and social impacts from construction and operation of a metro line in an urban context. Bank policy OP/BP 4.01 on Environmental Assessment was triggered, along with Bank policy OP/BP 4.11 on Physical Cultural Resources (a cultural relics survey along the rail line identified eight buildings which are classified as protected buildings along the street above the metro tunnel alignment). An Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) were developed and disclosed prior to appraisal in compliance with Bank safeguards policies. Chance find procedures for cultural relics were included in the EMP. During construction, the EMP was generally well implemented by KRTC: environmental management responsibility was built into the project management structure, with dedicated staff; EMP requirements were incorporated in bidding documents/contracts; project supervision and independent environmental monitoring consultant were engaged; there was an adequate site enclosure and traffic management plan; the construction sites were well organized; there were adequate construction safety measures and warning signs; project information, grievance contacts, construction management rules/measures, and procedures for environment and safety were disclosed to the public; proper dust control measures (water spraying or geo-textile cover of excavated material) and noise control measures (no nighttime construction) were implemented; and spoil material was disposed in proper manner on a timely basis. A two-tier monitoring program developed for the project - including daily and regular monitoring to be carried out by contractors and construction supervision companies, and periodic compliance monitoring by professional monitoring stations – was satisfactorily implemented. Regular Bank supervision missions and the semi-annual environmental monitoring reports from KRTC confirmed the overall good implementation of the EMP.
67. At the time of ICR preparation, all construction works had been completed and the line was in operation for nearly a year. All construction sites including stations and depots have been restored to buildings, paved roads/sidewalks or intensive green spaces as per the project design and the urban land use plan. Noise/vibration impact on sensitive receptors along the line and wastewater discharge from the two depots are monitored during the operational phase and confirm that vibration impacts and wastewater discharge are in compliance with applicable standards. The overall environmental safeguards performance of the project is satisfactory.
68. Social safeguards. The project required involuntary resettlement and hence triggered Bank Involuntary Resettlement policy (OP/BP 4.12). During project preparation a comprehensive assessment of project-affected people (PAP) was carried out and a Resettlement Action Plan (RAP) was prepared in compliance with OP/BP 4.12 Involuntary Resettlement. The RAP was publicly disclosed locally and at the Bank Infoshop prior to appraisal. Altogether 837 residential households and 108 enterprises were affected. The project experienced some delays in resettlement due to changes in the technical features of the project as well as difficulties in reaching agreement with the PAPs. KRTC worked with the design consultants to optimize the design and minimize house demolition and conducted continuous consultations and negotiations with the PAPs and ensured that all resettlement activities complied with the RAP. All resettlement was completed at the end of April 2018 compared with the initial planned date of December 2015. All affected households had moved into new replacement buildings by the end of the project and all affected people have been fully paid resettlement compensation. The overall social safeguards performance of the project is satisfactory.
69. Procurement and contract management. Procurement performance was satisfactory, and procurement has been carried out in accordance with Bank procurement policies, procedures and requirements. There were eight large supply and installation contracts for equipment to be procured under International Competitive Bidding (ICB) in the original procurement plan. During project implementation these contracts were changed from the goods category to
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the works category in consultation with the Bank and the procurement method was changed from ICB to National Competitive Bidding based on the procurement threshold for the works category. This change reduced procurement time and ensured that the equipments were procured, delivered and installed in a timely manner to match the overall project implementation schedule. The procurement plan was updated regularly, and only minor issues occurred during the procurement process and contract implementation. While the contracts for the construction of the subway stations financed by the Bank loan were procured quickly, contract implementation was delayed due to resettlement issues. Project procurement performance was rated either moderately satisfactory or satisfactory during project implementation.
70. Financial Management. Prior to appraisal, the Project’s financial management system was assessed as being adequate and met minimum Bank financial management requirements, as stipulated in OP/BP 10.02. Financial management risk was rated as “Low”. Throughout the project cycle, the project maintained adequate financial management arrangements. The interim financial reports were submitted on time, and annual financial reports were audited and came out as “unqualified”. There were some delays in reviewing and processing the physical progress certificate and interim payment request. Overall, the financial management performance of the project was satisfactory.
C. BANK PERFORMANCE
Quality at Entry 71. This project was the first metro project that the Bank supported in China, however the team benchmarked it against numerous projects in the region and globally. The project design benefitted from the Bank’s guidance on engineering, policy and institutional aspects, urban planning, and in the development of innovative tools and methodology to forecast urban rail demand/forecasting. At the design stage, a technical and safety analysis was conducted to ensure that all appropriate technical, cost-effective, energy efficient alternatives were fully considered to build a high quality urban rail. Following on the previously appraised urban rail project in Sao Paulo, project preparation further laid the ground in developing methodologies to assess the wider economic impact of similar sustainable infrastructure projects. In addition, by introducing cutting edge concepts such as TOD and transport integration, the team was able to engage with the government at central, provincial and city levels to discuss the core policy and institutional challenges to sustainable urban mobility. The concepts, good practices, benchmarks and tools mobilized or produced by the team (sometimes in an ad hoc manner) were highly appreciated by the client. In addition, these capacity building activities were much needed by the client and provided opportunities to strengthen the management of urban rail investments and improve the quality of service, while improving knowledge on transit- oriented development and land value use.
72. Importantly, there was sufficient citizen engagement and consultation with key stakeholders during project preparation, and most risks and barriers to transit-oriented spatial growth and to the development of an effective multi-modal public transport system were identified. However, the project results framework could have been better designed (refer to section I. B and Section IV A for details) and was almost entirely revised during implementation.
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Quality of Supervision
73. The Bank allocated effective and adequate resources to project supervision. Although a total of five task team leaders were involved during the lifecycle of the project, they were all technically strong, and provided timely support to the client. The Bank enhanced the team’s supervision by basing a co-task team leader in China, which further enhanced responsiveness and facilitated communication with the client. During project implementation, the Bank team monitored implementation progress closely through regular (about twice a year) implementation support missions (13 in all). Mission findings were candidly documented in Aide Memoires, and effectively communicated to the client. Timely follow up actions were taken. For instance, when it appeared that the project monitoring indicators had to be revised, the team was proactive in rapidly updating the result framework and in processing the 2015 restructuring. The team also engaged planning experts to train and arrange study tours abroad for the improvement of urban planning capabilities. In 2012, the Bank conducted in-depth discussions with experienced rail transit experts in China and Singapore on the technical aspects of Line 3, which were of great help to the Rail Transit Company. During project implementation, the Bank team supported KRTC in becoming a fast learning and growing entity to construct metro lines and operate them.
74. The Bank team’s supervision activities added value by providing holistic support on engineering designs, procurement, environmental, social and financial management. The Bank team acted as a technical advisor, sharing good practices based on international technical standards and proven state-of-the art-technology. This technical advisory support provided by the Bank team and its consultants was practical and well appreciated by the client, as indicated in the Borrower’s report. The Bank also hired highly specialized international consultants to review designs, technical specifications, bill of quantities and variations for works, equipment supply and installation and goods contracts. The Bank team’s support not only benefited this project, but also other projects carried by the client using domestic resources. For example, KRTC initiated citizen engagement by broadly involving the communicates around the routes prior to the construction of metro Line 5 and Line 6. The experience, knowledge and capacity acquired from managing the procurement of this project also helped KRTC to prepare and and manage projects financed by other international financial institutions (such as the Asian Development Bank) better.
75. Assessment of procurement and fiduciary risks were appropriate. At early implementation stages, mitigation measures were taken by the team by ensuring that capacity building would help KRTC in complying with Bank fiduciary requirements and in adhering to Bank procurement procedures, particularly regarding international competitive bidding. The assessment of social safeguard risks however was somewhat overoptimistic during the first two years of project implementation. The risk was rated low despite the project being substantially delayed by resettlement activities, and despite resettlement activities being well known world-wide as a factor for delay during the early stages of metro project implementation.
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Justification of Overall Rating of Bank Performance
76. The overall rating of the World Bank performance is Satisfactory, given the high quality of entry (barring M&E design) and supervision, and the positive feedback received from the client throughout the project cycle, as recorded in the client’s ICR.
D. RISK TO DEVELOPMENT OUTCOME
77. The potential risks to the outcome are linked to: (i) the sustainability of achieved high- quality urban rail system; (ii) the sustainability of multi-modal integration; and (iii) the sustainability of compact, transport oriented urban development in Kunming.
Sustainability of achieved high-quality urban rail
78. The operation and maintenance of Line 3 is managed by Kunming Metro Subway Operating Co, established by KRTC. The operating company has assembled a maintenance team of 180 persons (one person per car). Similar action has been taken for the maintenance of other sub-systems, such as track and signaling. Adequate inventory of spare parts is available for maintenance over the next two years.
79. The operating company relies on revenues from passenger fares, commercials, superstructures, TOD, and some land development, as well as financial support from the municipality. While the overall performance of Line 3 has met expectations of the rail company and the Bank, ridership at some stations along the western sections of Line 3 has not reached the initial target, and estate development is still in process in these areas. The expected inflow funds from the real estate activities of KRTC have not fully materialized because of adverse real estate market conditions and changes to city development plans that occured during project implementation. This means that Line 3 maintenance and consequently, the service and system quality, might require additional funding support. It is understood that the funding gap would be filled to some extent by the Municipal Corporation. It is imperative that the Municipal Corporation and KRTC arrange adequate funding for O&M activities of Line 3, knowing that maintenance costs are relatively low in the first two years of operation but start rising in later years. However, ridership is expected to rise and inflow of funds from the real estate activities of KRTC are expected to materialize, thus reducing the need for additional funding.
Sustainability of the multi-modal integration
80. In addition to fare and physical integration, the sustainability of the multi-modal integration will depend on coordination between the urban rail company, the bus company, and the Transport Bureau at the municipal level. More coordinated actions will be necessary to facilitate multi-modal traffic, e.g., coordinating schedules and operating lines across different modes to have an efficient urban transport network to avoid competition between transport modes. Currently, the metro company does not report directly to the Transport Bureau, while the bus company does, which makes coordination difficult from an institutional perspective. The national government has been promoting a single apex body for overall planning and design to facilitate the linkages between all transportation modes, with institutional reforms underway to ensure cooperation between the different bodies; however, this institutional change will take time to implement. In the interim, the Transport Bureau should lead the efforts to coordinate more actively, and be responsible for the integration of all transport networks.
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Sustainability of compact and transit-oriented urban development
81. The transport sector is an important contributor to, but not the only determinant for, compact and Transit-Oriented Development. City level development plans, policy directions, and coordination between various agencies are other critical factors. The Kunming municipality has promulgated a master plan that promotes high density, and compact land use development. The current leadership also already took actions to curtail unchecked rapid development and expansion of Kunming and enhance the efficacy of land use. The Kunming Land Bureau is evaluating the impact of certain restrictive regulations on land value capture and the commercial use of land around stations, in order to increase the gains from land use, and is exploring flexible options for the sustainability of compact growth and Transit Oriented Development. The Bank is implementing a China: GEF China Sustainable Cities Integrated Approach Pilot Project with the Ministry of Housing and Urban Rural Development to review national laws and regulations on urban planning and land administration that are related to TOD and LVC.
V. LESSONS AND RECOMMENDATIONS
82. Sound geotechnical survey is essential to mitigate potential adverse resettlement impacts. Major resettlements led to a two-year delay in the construction of Line 3. An important lesson learned is that detailed geological investigations employing modern technologies should be carried out with the objective of selecting a route and the location of stations that minimize the dismantling of existing structures and relocation of households. As urban rail projects invariably require land acquisition - even when tunneling works are carried out underground - for the construction of stations, ventilation shafts, and other surface facilities, risks related to resettlement must be adequately assessed during project preparation and during the early stages of implementation. Modern technologies should be used to select the route and the location of stations in order to minimize the dismantling of existing structures and relocation of households.
83. In the case of Kunming and perhaps for other larger cities in China, it would be necessary to establish a municipal agency to oversee all modes of transport and to ensure multimodal integration. The choice of the rail company as the implementing agency was justified at time of appraisal, given the institutional set up for urban transport in most Chinese cities. However, the weak of coordination between the company and the municipality limited multimodal integration under this project. Establishing an apex coordinating body, empowering the implementing agency to do so, or establishing a separate counterpart agency during project preparation, could have facilitated transport integration under the project.
84. World Bank’s value added to urban transport in China through TOD and Integration need to be continued. At the time of project appraisal, the Bank had been engaged in a dialogue with the government and second to third tier cities on the need to focus on multi-modal integration to facilitate transit and support the development of compact city growth. This project was the first in China to tackle such issues, along with the investments in the construction of high-quality urban rail infrastructure. Several features, such as fare integration, the use of indicators to measure integration and compact city growth, and the
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focus on the land around the stations, were new and the Bank was able to add value by providing ad hoc technical support not only as part of preparation and supervision missions, but also by encouraging knowledge exchanges between Kunming, Zhengzhou and Nanchang urban rail projects, all supported by the Bank. China set a great example in cross learning from project to project in similar cities, through a good mix of programmatic approach and decentralization of implementation responsibilities. Going forward, projects in China should address institutional challenges that prevent the full benefits of TOD and Integration from materializing.
85. Select appropriate PDO indicators to capture the progress of multi-modal integration, as well as compact and Transit Oriented Development. Since project appraisal, the Bank has provided improved guidance to staff in defining PDO indicators for the IPF instrument and these are reflected in the Bank’s ICR Guidelines. An important guidance is that delivery of the PDO’s outcome should fall under the responsibility of the implementing agency. For this project, “support to compact and transit-oriented development” relied on urban planning regulations and market outcomes that were beyond the control of the rail company or the Transport Bureau. During project implementation, the results framework was substantially revised to reflect these conditions. Similarly, intermediary outcome indicators should be adequate, easily quantifiable and not beyond control of the implementing agency. In addition, FAR should not be recommended as an indicator for compact growth and TOD, given it can only be partially attributed to the project. Higher FARs allow for more densities, but do not necessarily imply more compactness. However, only an impact evaluation would better reflect the effect on compact urban development.
86. Adding accessibility indexes and recent economic analytical tools could help during project preparation to support equitable mobility. It is known that enhanced mobility can improve access to jobs. More recently, accessibility indicators have been used in urban projects to quantify increased access to job opportunities. There are additional economic effects that could also be considered to design a project with a more equitable mobility. Poor people might benefit relatively more from better public transport options, while they are also more likely to be relocated away from the city center in the medium term because of rent increases. A recent study has helped to quantify the differential impacts in terms of access to economic opportunities of transport projects; such impacts have been shown to be directly correlated with changes in density, rents, economic activities and welfare in cities. The promotion of compact city development could help to mitigate the relocation effects that tend to affect the poorest. Similar analyses can be used to quantify welfare increases from a good feeder system, different subsidy/pricing offers across modes, and from coordinating the construction of urban rail with land value capture.
.
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. ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS
A. RESULTS INDICATORS
A.1 PDO Indicators
Objective/Outcome: The objective of the project is to provide a high-quality urban rail with multi-modal integration. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Average daily weekday Number 0.00 200000.00 150000.00 153800.00 ridership on Line 3 after 6 months of operations 01-Apr-2012 30-Nov-2016 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The ridership target was 102% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion On-time performance Percentage 0.00 98.00 98.00 99.00
01-Jun-2015 29-Jun-2018 29-Jun-2018 06-Jun-2018
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Comments (achievements against targets): The on-time performance target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Peak period travel time Minutes 43.00 22.50 22.50 14.00 between origin/destination pairs along Line 3 (i) 01-Sep-2010 30-Nov-2016 29-Jun-2018 06-Jun-2018
Comments (achievements against targets): The travel time target was 150% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Peak period travel time Minutes 38.00 17.50 17.50 15.00 between origin/destination pairs along Line 3 (ii) 01-Sep-2010 30-Nov-2016 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): .The travel time target was 122% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion User satisfaction Percentage 0.00 80.00 80.00 91.20
01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The user satisfaction target was 114% achieved.
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Objective/Outcome: The objective of the project is to support compact city development. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion FAR along Line 3 relative to Text 1.00 >1.00 >1.0 1.6 district FAR in terms of new development 31-Dec-2008 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The FAR target was 100% achieved.
A.2 Intermediate Results Indicators
Component: Component: Civil works and equipment
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of stations with Number 0.00 17.00 17.00 13.00 bus/bicycle facilities within 50m of an exit 01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The target was 76% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of stations built Number 0.00 17.00 17.00 17.00
01-Apr-2012 29-Jun-2018 30-Apr-2018 06-Jun-2018
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Comments (achievements against targets): The target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of km track built Number 0.00 38.20 38.20 38.20
01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Bus/Rail integration: bus Text N/A yes yes partially yes routes restructred to support integrated public transport 01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018 as per the results of the route restructuring report
Comments (achievements against targets): The target was only partially achieved. No indicator can be used to quantify the extent of the achievement.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Bus/Rail integration: shared Text In Planning yes yes yes
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I/C card for both rail and bus 01-Apr-2012 29-Jun-2018 01-Apr-2015 29-Jun-2018 use
Comments (achievements against targets): The target was 100% achieved.
RESULTS FRAMEWORK AND KEY OUTPUTS (Full version to include all revised and deleted indicators)
A.1 PDO Indicators
Objective/Outcome: The objective of the project is to provide a high-quality urban rail with multi-modal integration. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Revised Average daily weekday Number 0.00 200000.00 150000.00 153800.00 ridership on Line 3 after 6 months of operations 01-Apr-2012 30-Nov-2016 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The ridership target was 102% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New On-time performance Percentage 0.00 98.00 98.00 99.00
01-Jun-2015 29-Jun-2018 29-Jun-2018 06-Jun-2018
Comments (achievements against targets): The on-time performance target was 100% achieved.
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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Revised Peak period travel time Minutes 43.00 22.50 22.50 14.00 between origin/destination pairs along Line 3 (i) 01-Sep-2010 30-Nov-2016 29-Jun-2018 06-Jun-2018
Comments (achievements against targets): The travel time target was 150% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Revised Peak period travel time Minutes 38.00 17.50 17.50 15.00 between origin/destination pairs along Line 3 (ii) 01-Sep-2010 30-Nov-2016 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): .The travel time target was 122% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New User satisfaction Percentage 0.00 80.00 80.00 91.20
01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The user satisfaction target was 114% achieved.
Objective/Outcome: The objective of the project is to support compact city development.
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Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New FAR along Line 3 relative to Text 1.00 >1.00 >1.0 1.6 district FAR in terms of new development 31-Dec-2008 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The FAR target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Dropped Introduction of high quality Text service measured by reduction in peak period travel time along line 3 corridor and percentage of 01-Sep-2012 09-Mar-2015 01-Nov-2016 riders who have access to private vehicles
Comments:
Formally Revised Actual Achieved Indicator Name Unit of Measure Baseline Original Target Target at Completion
Dropped Percentage of public Text To be provided will be available after percentage should transport riders who have based on market Line 3 opens be greater than access to a private car for survey before before metro their commute opening of metro opening
01-Sep-2012 09-Mar-2015 01-Nov-2016
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Comments: Since the project has no control over whether passengers own cars or not, it was agreed that a more meaningful indicator to assess the quality of the system would be user satisfaction based on surveys conducted by an independent party, funded though the project.
Unit of Formally Revised Actual Achieved Indicator Name Baseline Original Target Measure Target at Completion
Dropped Successful multi-modal Text no no yes integration with buses, and cycles 01-Sep-2012 09-Mar-2015 01-Nov-2016
Comments: This indicator has been simplified to measure the number of Line 3 stations with bus and bicycle facilities within 50 meters of an exit.
Unit of Formally Revised Actual Achieved Indicator Name Baseline Original Target Measure Target at Completion
Dropped Ridership and revenue Text attributable to line 3, and operating ratio 01-Sep-2012 09-Mar-2015 01-Nov-2016
Comments:
Unit of Formally Revised Actual Achieved Indicator Name Baseline Original Target Measure Target at Completion
Dropped Working ratio of the Text N/A will be available after <1.0 Kunming Rail Transit Line 3 opens Company Line 3 01-Apr-2012 09-Mar-2015 01-Sep-2016
Comments: The original working ratio (operating costs over revenue) target of less than 1 is not realistic as only two metro systems worldwide have ever achieved this target. Instead, a better indicator to assess the quality of the system is the on-time performance.
Unit of Formally Revised Actual Achieved Indicator Name Baseline Original Target Measure Target at Completion
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Dropped Percentage of total new Text Baseline data to be new methodology TBD development that occurs compiled after has been developed along rail lines negotiations and will be applied in next ISR, pending restructuring results
01-Sep-2011 09-Mar-2015
Comments: The efforts and cost associated with collecting information for this indicator were much higher than anticipated. As a result, it was agreed that data will be collected for one district, covered by one third of Line 3, and which includes both dense urban and suburban areas.
A.2 Intermediate Results Indicators
Component: Component: Civil works and equipment
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New Number of stations with Number 0.00 17.00 17.00 13.00 bus/bicycle facilities within 50m of an exit 01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The target was 76% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New Number of stations built Number 0.00 17.00 17.00 17.00
01-Apr-2012 29-Jun-2018 30-Apr-2018 06-Jun-2018
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Comments (achievements against targets): The target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New Number of km track built Number 0.00 38.20 38.20 38.20
01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018
Comments (achievements against targets): The target was 100% achieved.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New Bus/Rail integration: bus Text N/A yes yes partially yes routes restructred to support integrated public 01-Apr-2012 29-Jun-2018 29-Jun-2018 29-Jun-2018 transport as per the results of the route restructuring report
Comments (achievements against targets): The target was only partially achieved. No indicator can be used to quantify the extent of the achievement.
Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion New Bus/Rail integration: Text In Planning yes yes yes
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shared I/C card for both 01-Apr-2012 29-Jun-2018 01-Apr-2015 29-Jun-2018 rail and bus use
Comments (achievements against targets): The target was 100% achieved.
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B. KEY OUTPUTS BY COMPONENT
Objective/Outcome 1: support compact, transit-oriented urban development 1. Peak period travel time from Shi Zui station site to Xiaoximen along Line 3 2. Peak period travel time from East Long-Distance Bus Terminal to NanPin Walking Street along Line 3 3. On-time performance Outcome Indicators 4. User satisfaction 5. Average daily weekday ridership on Line 3 after 6 months of operations 6. bus routes restructured to support integrated public transport as per the results of the route restructuring report 1. Number of km track built 2. Number of stations built Intermediate Results Indicators 3. Number of stations with bus/bicycle facilities within 50m of an exit 4. Bus/Rail integration: shared I/C card for both rail and bus use 1. Civil works for selected stations 2. Provision of various equipment such as, but not limited to, power supply, Key Outputs by Component escalators, fare collection, and communication systems, and technological (linked to the achievement of the Objective/Outcome 1) equipment at depot and other related facilities. 3. Technical Assistance and Capacity Building
Objective/Outcome 2: provide high quality, integrated public transport on the East-West Line 3 corridor
1. FAR along Line 3 relative to district FAR in terms of new development Outcome Indicators
Intermediate Results Indicators Key Outputs by Component 1. Technical Assistance and Capacity Building. (linked to the achievement of the Objective/Outcome 2)
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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION
A. TASK TEAM MEMBERS
Name Role Preparation Supervision/ICR Antoine Avedis Kunth, Yi Yang Task Team Leader(s) Guoping Yu Procurement Specialist(s) Fang Zhang Financial Management Specialist Yiren Feng Environmental Specialist Ruifeng Yuan Team Member Shuang Zhou Social Specialist Mathilde Sylvie Maria Lebrand Team Member
B. STAFF TIME AND COST
Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY10 20.850 239,211.16 FY11 35.321 264,859.61 FY12 0 0.00
Total 56.17 504,070.77
Supervision/ICR FY11 0 13.38 FY12 28.840 257,693.08
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FY13 11.025 85,007.72 FY14 15.075 97,411.57 FY15 24.919 142,840.96 FY16 17.469 104,051.12 FY17 13.947 59,733.52 FY18 18.873 126,474.63 FY19 9.222 45,554.42 Total 139.37 918,780.40
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ANNEX 3. PROJECT COST BY COMPONENT
Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Civil Works 209.40 279.2 133.3 Equipment 86.90 18.6 21.4 Technical Assistance and 3.00 2 66.6 Capacity Building Total 299.30 299.8
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ANNEX 4. EFFICIENCY ANALYSIS
The re-assessment of economic viability of the project was made using the same method and a comparable spreadsheet model9 to that used to produce the economic evaluation results used at at Appraisal and reported in the PAD.
The revised version of the model had several different inputs and assumptions, based outcomes of project implementation being slightly different to those expected, and the economic and social context of the project turning out to be slightly different to that projected at Appraisal. The principal differences were in relation to:
Economic and social context - Population projection: The PAD indicated the projected population and level of employment for Kunming urban area but did not indicate the source. To see if the expected population was different to what it was in 2011 (the original base year for the projections) a comparison was made between the World Urbanization Prospects editions for 2011 and 2018. The difference in projected populations was used to adjust the projection of demand for urban passenger travel in Kunming; The impact of this change was to reduce the EIRR by 0.8 percentage points10 - Employment projections: No updated projections for the level of employment in Kunming over the analysis period were available, so it was assumed the employment: population ratio indicated in the PAD was still valid. This implies that employment creation would be lower to match the lower population projection. This has no additional impact on the estimated EIRR above that attributable to the lower population projections. - GDP projections: The estimated value of time savings is one of the main expected benefits of the Project, and this estimate depends on assumptions about the value of individual time savings. These in turn depend on estimated per capita income, and this depends on projections of GDP for the Kunming region. No updated projections of the Kunming GDP were available, so it was assumed that the current projections would be the same as for all urban areas in China. Current IMF projections for China’s GDP growth up to 2023 were compared with those made in 2011, and the projections for Kunming were adjusted by the same ratio11. The impact was to increase the EIRR by 0.3 percentage points - Ramp-up period: A common feature of new transport infrastructure is that users need time to become aware of its advantages and to adjust their behavior accordingly. This feature has been taken into account in the revised economic evaluation. The first-year number of passengers was assumed to represent about 75 percent of the ‘steady state’ number, with the second year achieving 85 percent, the third year 95 percent and the full use being achieved from the fourth year onward. This has the effect of bringing the demand in year four to about the same as assumed for the first year in the original evaluation. Assuming a ramp up period and that the demand is not permanently reduced based on the first-year level of demand of only 153,800
9 The spreadsheet used for the original estimation was not available, so another was developed which when used with used the same input data produced the same results. 10 This is a different to saying the ‘EIRR was reduced by 0.8 percent, which would give an EIRR of (8.5*0.92) that is 7.8 percent. A reduction of 0.8 percentage points implies an EIRR of (8.5-0.8,) that is 7.7 percent 11 The GDP projections in the original economic evaluation were relatively low as they were made when the global economy was still emerging from the financial crisis of 2009. Current (early 2018) GDP projections are slightly higher
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restores about 0.2 percentage points to the EIRR
Project implementation - Construction costs: The expected construction cost of Line3 was quoted in the PAD as being U$1.5 billion in 2009 prices. Elsewhere in the PAD a cost of U$1.753 is cited which would be The period 2009 to 2011 (when the PAD was written) was one of mixed very low monthly (-2 percent) and high monthly (6 percent) inflation. The 2009 cost adjusted to 2017 prices and converted to RMB is about RMB12 billion. This is slightly less than the outcome cost estimated at RMB13 billion, which has been used in the economic re-evaluation. The impact of the slightly higher construction costs was to reduce the EIRR by 0.3 percent points. - Scheduling of construction costs: Early in the construction period there were delays attributable to two causes: the need to reduce road congestion, since Line 3 was being constructed at the same time as Line1/2 and the combination was causing unacceptable traffic congestion in the downtown area, and; the need to change the method of construction of part of the tunnel to cut and cover and through this to acquire additional properties. So as not to delay the opening date longer than necessary despite these interruptions, the construction expenditure was speeded up so that a higher proportion then planned occurred in the later part of the construction period. This rescheduling of expenditure has been taken into account in the economic re-evaluation. Delaying investment in construction has the impact of increasing the EIRR by 0.4 percentage points. - Opening date:12The original economic evaluation assumed that line 3 would become operational in 2015, whereas it actually opened in August 2017 about 18 months late. This delayed opening date has been taken into account in the revised economic evaluation, and as part of that accounting the evaluation period has been extended by eighteen months so the benefits are still measured over a 30-year period. The delayed opening date reduced the EIRR by 0.2 percentage points. - Metro fare: The actual distance band structure of metro fares is very similar to that assumed for the original economic evaluation, but with the addition of an extra band for long distance passengers. The anticipated integrated smart card. The slightly higher metro fare has the effect of reducing the EIRR by 0.1 percentage points. - Commercial development at stations: The original economic evaluation was based on an understanding that there would be significant commercial development at the downtown stations, resulting in more passengers using Line 3. A change in urban development strategy during construction of the line resulted in some of this development not taking place. A recognition of the reduced demand for travel on Line 3 was taken into account in the re- evaluation although the method of estimation could not be very precise. It was estimated to reduce the EIRR by about 0.1 percentage points. - Bicycle facilities: Bicycle access and storage facilities have been provided at 13 stations rather than the 17 assumed in the original economic evaluation. This to some extent reflects the higher than projected reduction in the use of bicycles for urban transport in Kunming. The estimated number of bicycle users transferring to Line 3 has been reduced in proportion to the reduced number of stations with bicycle access facilities. These users are assumed to be using other forms
12 The delayed opening date replaces the data for the first year of operations with that of one additional year at the end of the original evaluation period. This replacement year has a much higher level of demand but it much more heavily discounted. If the percentage increase in demand is the same as the estimated EIRR, the impact on the evaluation is zero.
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of transport, including electric bicycles. This had a negligible impact on the EIRR; - Restructuring of bus routes: One of the objectives of the project was to bring about a closer integration of bus and metro services in Kunming, and this would include structuring bus routes to act as feeders to the metro. Our understanding is that this restructuring is still being planned but is still intended to be implemented in the near future. It has been taken into account in the re-evaluation by a reduction in the number of Line 3 passengers for its first three years of operation, from when the feeder services are assumed to be operating. This has the impact of reducing the EIRR by 0.2 percentage points.
Project outcomes - Fewer opening year passengers: The average number of passengers per month in the first 12 months of operation of Line 3 was only about 77 percent of that projected at appraisal. In large part, but not entirely, this was a consequence of the delayed and reduced implementation of measures designed to make use of Line 3 more attractive to passengers. So it would be double counting to take account of this reduced level of demand as well as of the specific contextual and implementation changes that bought it about. The most significant explanation is that the original evaluation did not take account of the ramp up period of demand. Here we have assumed that there will be no further reduction in passengers after the ramp up period that could be attributed to the other changes, so no further impact of the reduced number of opening year passengers needs to be taken into account in the revised economic evaluation - Shorter Line 3 transit times: The monitoring of travel time on Line 3 showed lower transit times than had been assumed in the original economic evaluation. Not only does this lead to a greater time saving by the Line 3 passengers, it will also attract more passengers to Line 3 from other transport modes. The estimated impact on the EIRR of these two outcomes is an increase of 0.4 percentage points
Revised economic evaluation results Changed parameter from original Percentage Resulting economic evaluation points change EIRR Original EIRR from Appraisal 8.5 Economic and social context Lower population growth -1.0 7.5 Higher GDP growth 0.3 7.8 Allow ramp up period 0.2 8.0 Project implementation Higher CAPEX -0.3 7.7 Rescheduled investment 0.4 8.1 Delayed opening date -0.2 7.9 Higher metro fare -0.1 7.8 Less commercial development at stations -0.1 7.7 Fewer bike facilities at stations 0.0 7.7 Delayed bus route restructuring -0.2 7.5 Project outcome Higher time saving benefits 0.4 7.9
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Revised EIRR 7.9
Despite the many changed assumptions and parameter values, the overall revised EIRR is only 0.6 percentage points lower than that at made at Appraisal. Far from being a disappointing outcome, this indicates the resilience of the original project concept to the many contextual changes and implementation difficulties and delays. Given the many assumptions that have to be made and uncertainties prevalent in many of the projections, this result is within the margin of error of being the same as the original evaluation.
Wider economic benefits There are several ‘wider economic benefits’ that were not included in either the original or revised economic evaluations. Two of these were mentioned in the PAD of the project:
Accessibility: The metro will promote interconnection between residential and employment areas and social facilities (hospitals, schools) by lowering the obstacles to travel within the city. Although the economic evaluation quantifies improvement in travel time savings, it does not directly quantify the benefits of this increased accessibility for residents of Kunming. The metro system will provide increased access to economic opportunity for all of Kunming’s residents, including those of low income.17 Over time, this accessibility benefit is likely to be capitalized into increased land values near metro stations.
Compact City Growth: Over the long term, compact urban growth can substantially reduce the energy intensity and greenhouse gas emissions of urban areas. This is particularly crucial since Kunming is at a relatively early stage of its development and decisions on urban development made now will be ‘locked in’ over the long term - for better or for worse.
Analytical methods to estimate the extent of these wider economic benefits are still at relatively early stages of development13 and have not yet progressed far enough to be incorporated into quantitative evaluation of the project.
Sensitivity test It appears from the available version of the original economic evaluation that the CAPEX cost of rolling stock was not included, although its OPEX was included. For compatibility the rolling stock CAPEX has also not been included in the revised version reported here. However, none of the benefits of the infrastructure CAPEX could be realized without that of the rolling stock, so although this was not formally part of the ‘project’ as described in the PAD, its CAPEX should be included as an essential parallel project. Inclusion of the estimated rolling stock CAPEX of RMB 1.03 billion would reduce the EIRR by 0.6 percentage points, which after taking account of all the other changes would result in an EIRR of 7.3 percent.
13 A recent World Bank publication described some of the analytical techniques that are being developed. So far these mostly apply to trade corridor rather than urban transport projects.
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ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS
The recipient Project Completion Report could be found on the following link:
http://wbdocs.worldbank.org/wbdocs/viewer/docViewer/index1.jsp?objectId=090224b0867d6ec3&repo sitoryID=WBDocs&latest=yes&standalone=false&windowWidth=1200&windowHeight=742.
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ANNEX 6. SUPPORTING DOCUMENTS (IF ANY)
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