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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 17129 - CHA PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ONA PROPOSED LOAN OF $90 MILLION AND A PROPOSED CREDIT EQUIVALENT TO SDR 44.6 MILLION TO THE PEOPLE'S REPUBLIC OF CHINA Public Disclosure Authorized FOR THE TARIM BASIN II PROJECT April 23, 1998 Public Disclosure Authorized Rural Development & Natural Resources Sector Unit East Asia and Pacific Region CURRENCY EQUIVALENTS (Exchange Rate Effective January 1998) Currency Unit = Yuan Y 1.00 = US$ 0.12 US$ 1.00 = Y 8.3 FISCAL YEAR January I to December 31 WEIGHTS AND MEASURES I meter (m) = 3.28 feet (ft) 1 kilometer 0.62 miles I square kilometer 100 ha I hectare (ha) = 15 mu 2.47 acres I ton (t) = 1,000 kg - 2,205 pounds PRINCIPAL ABBREVIATIONS AND ACRONYMS USED CAS - Country Assistance Strategy GOC - Government of China EIA - Environmental Impact Assessment FAO - Food and Agriculture Organization GIS - Geographical Information System IBRD - International Bank for Reconstruction and Development IDA - Intemational Development Association IPM - Integrated Pest Management MIS - Management Information System MOF - Ministry of Finance MWR - Ministry of Water Resources NBET Non-Beneficial Evapotranspiration NGO - Non-governmental Organization PMO - Project Management Office PRC - People's Republic of China RAP Resettlement Action Plan SIDD - Self-financing Irrigation and Drainage District TBWRC - Tarim Basin Water Resources Commission TMB - Tarim Management Bureau WSC - Water Supply Corporation WUA - Water User Association XUAR - Xinjiang Uygur Autonomous Region Vice President: Jean-Michel Severino, EAP Country Manager/Director: Yukon Huang Sector Manager/Director: Geoffrey B. Fox Task Team Leader/Task Manager: Douglas OlsoIn CHINA Tarim Basin II Project CONTENTS A. ProjectDevelopment Objective 1. Project developmentobjective and key performanceindicators B. StrategicContext 1. Sector-relatedCAS goal supportedby the Project 2. Main sector issues and Governmentstrategy 3. Sector issuesto be addressedby the Project and strategicchoices C. Project DescriptionSummary 1. Project components 2. Key policy and institutionalreforms supportedby the Project 3. Benefitsand target population 4. Institutionaland implementationarrangements D. Project Rationale 1. Project alternativesconsidered and reasonsfor rejection 2. Major relatedprojects financedby the Bank and/or other developmentagencies 3. Lessonslearned and reflectedin the Project design 4. Indicationsof Borrowercommitment and ownership 5. Value added of Bank support in this Project E. SummaryProject Analyses 1. Economicand Financial 2. Technical 3. Institutional 4. Social 5. Environmentalassessment 6. Participatoryapproach F. Suistainabilityand Risks 1. Sustainability 2. Critical risks 3. Possiblecontroversial aspects G. Main Loan Conditions 1. Effectiveness conditions 2. Other H. Readiness for Implementation L Compliance with Bank Policies Annexes Annex 1. Project Design Summary Annex 2. Detailed Project Description Annex 3. Estimated Project Costs Annex 4. Financial and Economic Analysis Summary Annex 5. Financial Summary Annex 6. Procurement and Disbursement Arrangements Table 6.1. Project Costs by Procurement Arrangements Table 6.2. Consultant Selection Arrangements Table 6.3 Thresholds for Procurement Methods and Prior Review Table 6.4 Allocation of Loan Proceeds Table 6.5 Estimated Disbursement Schedule Annex 7. Project Processing Budget and Schedule Annex 8. Documents in Project File Annex 9. Statement of Loans and Credits Annex 10. Country at a Glance Annex 11. Summary of Local Beneficiaries Participatory Development Plan Annex 12. Summary of Voluntary Settlement Action Plan for Keping County, Aksu prefecture Maps Tarim Basin II Project - IBRD 29489 Hotan Sub-Project - IBRD 29490 Kashgar Sub-Project - IBRD 29491 Kizilsu Sub-Project - IBRD 29492 Aksu Sub-Project - IBRD 29493 Bayingol Sub-Project - IBRD 29494 CHINA Tarim Basin II Project Project Appraisal Document East Asia and Pacific Region China Date: April 23, 1998 Task Team Leader/Task Manager: Douglas Olson Country Manager/Director: Yukon Huang SectorManager/Director: Geoffrey B. Fox Project ID: CN-PE-46563 Sector: Agriculture Program Objective Category: EN Lending Instrument: SpecificInvestment Loan Programof TargetedIntervention: [XI Yes [ I No Project Financing Data [X] Loan [X] Credit [] Guarantee [] Other [Specify] For Loans/Credits/Others: Amount (US$m/SDRm):IBRD Loan $90 million/IDA Credit SDR44.6 million equivalent Proposed terms: [ ] Multicurrency [X] Single currency, specify US$ Grace period (years): 5 Loan/10 Credit [ ] Standard Variable [] Fixed [X] LIBOR-based Years to maturity: 20 Loan/35 Credit Commitment fee: 0.75% Loan/0.50% Credit Service charge: 0.75% Credit Financing plan (US$m): Source Local Foreign Total Government 100.6 100.6 (37%) IBRD 33.8 56.2 90.0 (33%) IDA 22.5 37.5 60.0 (22%) Beneficiaries 22.0 22.0 (8%) Total 178.9 93.7 272.6 (100%) Borrower: People's Republic of China Responsible agency(ies): Xinjiang Uygur AutonomousRegion Estimated disbursements (Bank FY/US$M): 1999 2000 2001 2002 2003 2004 Annual 20.1 37.2 41.5 28.7 16.3 6.2 Cumulative 20.1 57.3 98.8 127.5 143.8 150.0 Project implementationperiod: 1999-2003 Expected effectiveness date: 10/98 Expected closing date: 12/31/2004 OSDPAD Form: July 30, 1997 Page 2 A: Project Development Objective 1. Project developmentobjective and key performance indicators (see Annex 1): The proposedProject developmentobjectives for the TarimBasin II Project (Tarim II) in the Xinjiang Uygur AutonomousRegion (XUAR) which will expand on the successfulTarim Irrigation Project (Tarim I) are to: (a) increaseincomes of poor farmers through irrigatedagriculture development (performance indicator- per capita incomesof Project beneficiaries);(b) establish mechanismsfor sustainableuse, developmentand managementof water resourcesand land in the TarimBasin (performanceindicators - consumptiveuse allocations establishedand enforced);and (c) partially restore and preservethe "green corridor" in the lower reaches of the Tarim River (performanceindicator - amount of water delivered below DaxihaiziReservoir). B: Strategic Context 1. Sector-relatedCountry Assistance Strategy (CAS)goal supportedby the Project (see Annex 1): CAS documentnumber: 16321-CHA Date of latest CAS discussion:March 18, 1997 ProgressReport is scheduledfor discussion in May 1998 Tarim II would support the Bank Group Strategiesto: (a) promote continueddevelopment of sustainable techniquesto upgrade marginal land; (b) incorporatemajor water storage,transfer, irrigation,drainage and flood control into projects;and (c) target absolute poor through a series of investmentprojects. 2. Main sector issues and Governmentstrategy: Increasinggrain productionis a major goal of the ninth 5-year plan. The developmentand improvementof irrigated agriculturehas been identifiedby the governmentas an importantway of increasingfood production.Feeding China's vast and growing populationis a continuingmajor challenge for the Governmentof China (GOC). Present annual consumptionof grains is about 480 million tons and is expectedto grow to about 700 million tons by the year 2020. This is not only due to the increasing populationbut also to the increasedconsumption of grain for animalfeed resulting from increasingmeat consumptionas incomesrise. The Ninth 5-year plan which coversthe period from 1996-2001has the objective of increasinggrain productionfrom about 450 milliontons to 500 million tons and last year productionreached some 480 million tons, necessaryto meet domesticdemand. Large increases in cotton, oils and other productsare also mandated. Irrigationand drainageinfrastructure upgrading and increasingyields on irrigated lands are priority objectivesof the GOC and the Ministry of Water Resources(MWR). With 22% of the world's population,China has only 7% of the arable land. In addition,encroachment of urban and industrial areas continuallyreduces the land available for agriculturalproduction. These circumstancesrequire increasinglyintensive use of irrigatedagriculture. Much of the irrigationinfrastructure in China was built in the 1960s,in many cases with substandarddesigns and quality. Most of these systems are in need of rehabilitationand upgrading. In some areas, flood control, drainageand salinity mitigationare also essentialfor raising agriculturalproductivity. Drainageworks are essentialto allow cultivationof low- lying areas subject to waterloggingand salinization. Since the 1960s,government programs in drainage works have helped control waterloggingon 19 million hectaresand have reclaimed4.8 million hectares of saline land. Improvedwater resourcesmanagement at the river basin level has been identified by the Ministryof Water Resources(MWR) as an importantgoal for sustainabledevelopment and use of water resources in China. There are seven existing river basin commissionsestablished in the Yangtze, Yellow,Huaihe, Pearl, Haihe, Songliaoand Taihu Basins. These commissionsare responsiblefor comprehensiveriver basin planning and for the implementationof rational and controlledwater resourcesdevelopment and Page 3 management in these river basins. All of these river basins cover several provinces. Up to now, the river basin commissions have been less effective than anticipated, mainly due to lack of clear jurisdictional definition of responsibilities between the commissions and the provinces. MWR is presently working with others to draft legislation directed towards improving this situation.
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