Uocument of The World Bank

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 11040-A

STAFF APPRAISAL REPORT

Public Disclosure Authorized

CHANGCCUNWATER SUPPLY AND ENVIRONMENTALPROJECT

DECEMBER30, 1992 Public Disclosure Authorized

MITCOFICHE COPY

heport No.:11040-CHA Type: (OAR) Titie: WATER SUIPPLY AND) ENV Autthor: PIETVELD, C Ext.:82924 Room:F8059 Dept.:ASTIN

Environment, %uman Resources and Urban Development Operations Division Country Department II Public Disclosure Authorized East Asia and Pacific Regional Office

This docunent hs a resMtded distibuto and may be uad by ripiens only in the perfonmnce of their offid dutie Its contens may not otheise be dbcosed without Word Bank autoization. CURRENCY EQUIVALENTS (As of June 1992)

CurrencyName = Renminbi(RMB) Currency Unit = Yuan (Y) $1.00 =Y 5.48 Y 1.00 = $0.18

WEIGHTS AND MEASURES 1 millimeter(mm) = 0.0939 Inches (in) 1 meter (m) = 3.2808 feet (ft) I squaremeter (m: 2) = 10.7639square feet (ft) I cubicmeter (ml) = 35.3 cubicfeet 1 hectare(ha) = 10,000square meters 1 kilometer(Iam) = 0.62 miles(mi) 1 squarekilometer (1an) = 0.3861square mile (mtn)

ACRONYNS AND ABBREVIATIONS CIDA CanadianInternational Development Agency CMC ChinaNational Machinery Import and ExportCorporation CSC ChangchunSewerage Company CWSC ChangchunWater Supply Company CWRC CbangchunWater Resources Company EPB EnvironmentalProtecion Buream HLLG High-LevelLeadership Group lcd Litersper capitaper day MOC Ministryof Construction MOWC Ministryof WaterConservancy NEPA NationalEnviromnental Protection Agency PMO ProjectManagement Office PRC People'sRepublic of China SOEs Statementsof Expenditure SPC StatePlanning Commission UCC UrbanConstruction Commission

FISCAL YEAR January1 - December31 FOR OFFICIALUS ONLY

-i -

CHINA

CHANGCHUNWATER SUPPLY AND ENViRONNTAL PROJECT

CREDITAND PROJECTSUMRY

Ibmwr. People'sRepublic of China(PRC) _ bnfidaryt C bai~gcdunMunicipalt Ameunt SDR86.6 million($120 mfllion equivalent) Term: Standard,with 35 yes maurity and a grce perid of 10 years COlendingTerms: Tho Govrment of Chinawould make the proceedsavaiable to the ChangchunMunicipality. The municpality would oulend Ihe proceeds: (a) to the ChangchunWater Supply Company (CWSC) at a vaiable rate equal to the Bankrae plusa spreadof 1.5 percentper annumat the same matur as IBRDloans; and (b) to the newly created Changchu Sewerag Company(CSC) at a fixed rate of 5.1 pcont per annumat the samematuit as IBRDloans. CWSC and CSC wi beot a fixed commment chaw of 0.5 percentand assum the foreignexcag re hqject DewipUon Tbe main objectivesof the projectare to Improvewater spply in Changchunto meet the domestc needs of the urban popuation, Support dustial growth,and control urban water polluton. The physical works wuld include: (a) construcdonof a water umvmbsionpipeline to convoywat fom the SecondSonghua River to anImpout reseroir curey sevzg Changcun;construction of pumpingstations, epnsi and Impovementof watertreat facliies and expansionof the capacityo' the wer disuton system;(b) constructionof a trunkIntercepw sewerand a primary sewagetreate plantand prremt of eqpmet and tments for eniomenta qualitymonitoring and control;and (c) tecical assaceto assistwihdesignand construcdosupevision, to fh maagementsupport to the waterand sewerage companies including the preparationof a staff trainingprogram, and to implementa hardus wastestudy. nstiuonally, the projectwould reifor CWSC,develop CSC, strengte water polludoncontrol, e sh approprte pricing policies,improve operation practies, promote masures fr waterc ationad me prsoU l maement, indcuding anig of staf.

Thisdocument has a rsicted distributionand maybe used by recipientsonly in the peformance of their oicia duties.Its contentsmay not otherwisebe discosedwithout World Bank authotization. 0,~ I11,1

tt^l8t [#tti lif ill-

Etlmated Cost.:L Loa Forei Tdgn - ($ million)

Water Trw misn 36.0 44.5 80.6 Urban Water Supply 34.2 36.1 70.2 Sewag Colecton and Treatment 20.3 16.2 36.5 Tecinical Assstce 6.3 6.5 12.8

Totals Cost Ak 2i ml ml

Physical Coningencie 14.3 15.0 29.3 Price Coingences 15.2 6.8 22.0 TowalPoectost D3 12S. 2S1*

Interest during Constrction 14.9 0.0 14.9

P_eauired ~~141.; 12.^ ^

mincing Plan: Local Fori Ta

- ($ million)

Goverment of China 25.5 5.1 30.6 Jain Provinc Gover_ment 54.7 0.0 54.7 Chachun Municipality 61.0 0.0 61.0 IDA 0.0 120.0 120.0

TAd14.1 Es d Disburt:

IDA FY i93 199 1994 I 199719 (S mniion) Anmual 7.2 22.0 32.0 30.0 r 15.0 11.0 3.8 CumulatIve 7.2 29.2 61.2 91.2 105.2 116.2 120.0

Enn_mi1 late of Return Water Supply 11 pecent Sewea 23 pferet

Maps: IRD No. 24063 - Gener Layout IBRD No. 24064- WaterSupply Facilities DBRDNo. 24114- SewerageFacilities bgPrjeanced oodsaeaxpt frm Impo duies and taxes. a In cost for and ($9.9 miion). -V -

Contents

1 IlieSecto * ...... A. SectorBackgound ...... 1 Genal ...... 1 WaterResources ...... 1 War Supply ...... 1 PdolutonControl...... 2 B. Sectrinstitutions...... 2 C. a orSe"rlsues ...... 3 D. Prevkos BankGroup nwolvementInthe SeCtDr...... 5 E. Roleof theankGroup in theSector...... 6

2 ProjectAra ...... 7

A. Udn GrowthandEconomicAdIty ...... 7 B. ktesldtdaandndust WaterSupplySSavis . 7 C. W atrsupplyImasterPin8...... 8 D. Resldent andInduwitrlaSewageDisposa .. 9 E. SeDgwlspdsa MasterPlan ...... 10 P. PublicHeft .. ... 10

3 IuPlkroJec...... 11 A. Projecobjecv tiv.... 11 C. Projectepaon...... 13 D. ProjectCostEsftlates . ... 13

Tbisrepot Is bad on the findinp of an appraisamision wich visitedChina In May/une 1992. Ptojeatem membes udedMr. CadoRiedd (PrincipalUbanNWater Suppy En and TaskManar), Mr. GeorgePlant (So Soatary Enginer), Ms. Elizabedt Ranidn(cnomist), Mr. Wlliam KrNase(Financid Analyst, Consultat), Mr. Osam BIeda (EngieerConsultat), Mr. EdwardKe-Siong Hum irnmeta Eqgnrbm,Consultant), Ms. Xeng Llu (viron tl Engnew, Consultant),and Mr. Chieh Wu Engier, Consultant).Pee reviewersfor the projectwe Mr. G. Y s (Wate nd Sanitn Advisor, NUW), Mr. S. Choi (Sfio Eca mist, AST" and Ms. A. Naam (dior FinancialAnlyst, EC3IV). Ihemaaig Didon I EA2E. Th Dision Chif is Mr. Zah Ecok and the Diector isMr. ShahidJxvd Burki. -Y-

E. FincingPlan ...... 14 F. ProjectManagementandmemento ...... 1S ProjecteRqtig...... #..4 ... 4 444 *...... 1S G. LandAcquisiton ...... is H. Pocurenment...... 16

I sburseut.D ... .. * ...... 4. .. 17 1. PjSupervison...... 4.4 *444444 18 -K Resetdlemet...... 18

4 lbe upnngAgecies ...... 19 A. p igand Operatig Agncis ...... 19 B. andaationManod o CWSC andCSC ...... 19 C. Accounig andAudfitig ...... 20 D. BilingandCollection ...... 21 E. PersonnelMargemaent . . .21

5 _1nan"aAralysis.....23

A. Pastand CurrentFinancial Condiion . . .23 B. BalanceSheet and Fr-.d Assets ...... 23 C. Cumet Water Supply ad Seweap Taif .... 24 D. FinanciPerfbmnace Forecast... 24 6 PirojetAnalysis. . . 25

A. ProJectJustifilcaon...... *...... 25 D. Ieast-CostSolution. .. 25 C. ProjectBenefits .. 25 D. EcononicRate of Retun .. 26 E. Affordability.. 27 F. Eaviromnenta Impact ...... 27 0. Project Ris...... 28

7 Agrnene s Racdd and Re. ni.endatl.n .. 30

TAsS iN TmLT

2.1 Water DemandProjection 8...... 8 2.2 SewageProduionProjedon...... 9 3.1 SumnmaryCostEsmates.. . .13 3.2 Project FnacinggPlan.. 14 3.3 ProcurementA ngent I ...... 16 AwVI"

1. Exbstl Wte SupplyandSewereSystem ...... 32 2. W Dem d andSewr Foeass ...... * . 40 3. Descpddnof Component ...... 52 4. Projectmple mentatonSchemde ...... 54 S. ScheduleofContractPacbgesandCostTables ...... 55 6. Esmated CrediDi Schedule ...... I...... 60 7. SupervlonPIn ...... 61 8. Proposed WaterSupplyandSewergeOrgalatos...... 63 9. Assmptions forFinci Projecdons ...... 73 10. Ei in act Assessment...... 81 11. ToxidcHazdous Waste Managementand Indusid Park Studies- Daft TonsofReferen ...... * * 95 12. Mangemet and Operationl Supportfo Changchm Water Supply Cmpany: Draft Descridon ...... 99 13. Ecooic Rateof RetunTables ...... 106 14. SelectedDocumentsandDataAvaiablein theProjectFile ...... 108

MM

BJRD No.24063 GeneralAu ...... 120 I3RDNo.24064 WateSupplyFacilities ...... 121 I'RDNo.24114 SewemrFacilides ...... 122 1 TH SECTOR

A. SECTORBACKGROUND

6wal 1.1 Chinahas a rapidlygrowing urban population of about300 million, larger than the total populationof the UnitedStates. Althoughabout 70 percentof China's 1.1 billion populatonlives in rural areas, emigrationfrom the rural areasaccouns for mostof the recen rpd urba growth. 'here are nowmore ta 150 citieswith populations of at least 200,000 sad thouands of smallertowns. Even thoughcompared to other developingcountries the ren urban growthrate in Chinais low, it is China'ssize whichmakes the developmentof uban infrastructure,in particular,for watersupply and pollutioncontrol, an Immensetaslc 1.2 Overthe past 400 yearsChina has been a countrywhere survival of its people ws closely linked to water. The location of large umbers of its populationalong its rourses meant tht they were constniy thratened by severedroughts or catastrophic floodsand epidemicsof waterbornediseases. Chinahas overthe centuriesdeveloped a culture of hygienichabits which have dealt well wfith the diseasersks relatedto waterconsumption and ation. The introductionof modernurban water supplyand sewagecollection systems would Orher conute to improvementIn the health statusof the population.

Wat Resources

1.3 RaIl is bigblyvariable over China's extended territory, resulting in marked dIfee in availabilityof water resources. China's mean anmnalrainfal ranges from 2,400 -m to lessthan 25 mm. The centraland northest regionshave a meanannual rainfal in the range of 400-1,000mm, while the northwesthalf of the countryreceives less than 400 mm in the averageyear. Ite rainfal pattern in denselypopulated eastern China is domnatedby the southeastmonsoon. AlthoughChina is reportedto have more thu 50,000 rivers,only 1,580 have catchments greater tham 1,000 km 2 andonly 79 exceed10,000 km 2. The m anmnulrunoff from the totalland surfaceis about2,600 biBlion ni. In all casesthe runoff is highlyseasonal, with most occuring in late springto early auum Wat Supply 1.4 Chinahas made considerable progress in harnessingits rivers and in construing watersupply systems for its urbanpopulations. In 1949there were only59 citieswith water supplieswith a totalcapacity of 2.4 mDilonm&/day, providing water to only9 millionpeople. in 1986,302 citieshad potablewater supplieswith a capacityof about42 millionm 3/day. To this sbouldbe addedthe watersupply developed and used by idusties witha capcity of about -2-

63 milion mslday. t Is esmed tbat nowpracdcally all majorcites (353)have water supply systemswhich provide, mostly througb hous connections,the minimumnecessay supplyof Wa teO their populatios and Industry. 1.5 Watr supplycovege In small(county towns) ks markedly differet. In 1989 it was rpntd that only26 pecent of thosetowns (3,068 towns) had water supplyfacilites, seving about50 millionpeople. The cover ratesin thosetowns are stilllow-ranging from 27 to 73 pe, with tin rates from 17 to 60 lcd. Withthe rapid in aking place ughout Chia, wateravailable from the pipedsystems in bothlarge and small towns i ofte indeqat ad indutries awecompeed to developtheir own suppliesor conute heavflyto the onuction of publicsystem. Onlyabout 30 percentof the rouly 770 mlion rural populationhas adequatewater supply. Therecently approvedRura Water Supplyand SanitationPtoject focuses on this sector(Credit No. 2336-CHA,approved 1992). Poluon Control 1.6 China'straditional system of nigbtsoilcollection in the cidesgraualy h being replacedby pipedsewage collection systems which appear to be deficientin terms of design, constructionquality and maintenance.China has used nightsoilas agriculturalfertilizer for ceuries andhygienic practices of the generalpopulation have dealt atsfactorly withrisks of diseaserelated to this methodof domesticwaste disposal. However,the use of nightsoilby fame i less in demandnow due to the wideninguse of chemicalfertlizers andan increasig reuctane to handlenightsoil. Also, many industrieshave someform of treatmentfor their wastesbut few of these systemsare operatedefficiently. I'he moretroublesame aspect of the presentsiion is thatIndustral waste dischrges, Including metallic and toxic chemical wastes, are very often mixed with domesticwastes. These wa_twatersare then either spread on amad or formpart of irrigationwater, with the risk thatsome of the comtients mayente the foodchain. In manyurban areas, sewage is dischargedunted to the neaest watercorse, withassimilative capacity being exceeded in manylocalized reaches of stream and rnrs. In addition,treatment acilitiesfor domesticand indusi sewageare either absentor grossly Inadequatein mostcides.

B. SECTOR SmunONs

1.7 Ihe Changau Municipalitywas recedtly elevated to an independenteconomic planminguniL Municipalgovernments in Chinahave much greater responsibilities compared to cities in other oountries,because in additionto the service functionsof a Municipalityin industrialcountries, they are also responsiblefor productiv enterprisessuch as those for constructionand manufacturing. For example, in Changchunthe municipalgovernment consist of S Commissions(Planing, UrbanConstuction, Foreign Trade, etc.), 42 Bureaus (Machine Idustry, ChemicalIndustry, Agriculture, Public Health, etc.) and the Courts. The daly opaions of the municipalityare managedby a largemanagement team consistng of a Mayor, an execuiveVice Major, six ViceMayors and a SecretaryGeneral. 1.8 Ihe Cetal Governmenthas decentraized most of the funcdonsrelating to urban managementto the provincesand municipalities.As a rest, CentralGoverment functions in thesefields nDOw are limitedto the provisionof broadpolicy and tehnical guidance and sanction of majorinvestmaent projects; all urbanprojects exceeding Y 200 millionstil reuire roval of the relevanttechnical ministry and the StatePlanning Commission (PC). Becauseof ths -3 -

tole chage and becausemost projectfinancing no unde the controlof the local govemen=, the centralthical ministrieshave a limte role in the munipal dociion- mrlng process. 1.9 lh. Minstryof Construction (MOC) is the agency responsIble for urb/region Ifrastructure .4velopmentplanning at the naiona level.It alsoprovides guidance to the provincialand local autoities on urban land use, infrastructbrdevelopment plam and nimikoxladm_ on tec al standards.The NationalEuvironea Prtectio Agen (NEPA)is responible for tting ro policiesand prvding guidanceto theprovinces on envhonmentalmatters. The Minitry of WaterConseanucy (MOWC) i the central orgnzaon responsiblefor deteminingpolicies on the allocationand managemen of suce wat- resourcesin the coury. mplementa of thesepolici es caried out tough rver basincommisson, provincial wat conservancydeQp ents andwaw conserva bueas at vario localgoverment levels. However,allocation iad managementof gouna are the respoibility of the Ministryof Geologyand Mierals and the local goveornmdeparments and bureaus. 1.10 Tbisdecera i andthe high level of uran infraucture ep by localgverm havesignificaly increased the autority and responsibilitiesof mnicipal goernm . Thi in tu i leadg to demandsfor bettwerornization andmanagement of municipaservices. In the watersupply and polutlon control areas, funcdonal separation of thes sector fromthe gener urbanbureucrcies is occring, a fir stepto deay idenable accountabilitfor the performanceof thosesects. Investmetplanig and controlof municipl fiances is manageby the MunicipalPlanning and Finance Bureaus, hich need moretechical and maageria skillsto enablethem to respondto thegrowing responsibilities. C. MAORSECmRAL TSU 1.11 Duringthe 1960sand 1970sChina's Ceiral Governmentconed on idstrializationin u areas,but lefturban services neglected. AldMugh in thepast decade Chinascities and towns have Invested considerable reources to improvethe water supply and santationsectr, thesector will need to cote lrge-scaloinvestment for the foreseeable future to sustaineconomic growth and impro iroment quality.Carefl nvestm plain withprudent selection of invesent prioritiesare theref criticalissues (see paras. 1.19 and 1.20). linasingly, the sectorinvestments will need to be fundedfiom local resources, and thereore, upgadingof localgovernment and utilityfinaing i anotherarea of critical

1.12 Whilother is reognitionat various levels of govenme of eXcessivOwater Us by industry,me_ares to convertma ng processesto consere waterare oftencosty. To addressthe sitution, Chinesecitie re curtly settingwae use quotasfor various industries,with heavy financial penaldties for excedingthe quotas. The rles for quot levels are, however,arbitrarily defined, and the penaltiescharged do not reflectrsource cost. Formalizationof a policyto tie thesecharges to the marginalcost of watr productioand distrbion willbe neededto ensureeconomical use of water.Reaistic comumption levels on thisbasis could then be obtned to pride a morereasonable base for citiesto plantheir water splies. -4-

1.13 In mostcities, municipalwater supply s organizedas a muicipal deprtm or water spply omp underthe MunicipalPublic Utiity at Uba ConstructionBus. FN authorty is wtb the mayoror one of the vice-mayors.Many resitios ist which mpeo the operationofte watersupply enttas a truepublic utity. For ample, they do ot have fnadal autonomyand are dpdat on the municipaityfor long-termplnning, capitalilnv ent, settin waer rates, tratmentof surpluseang andmeetin operational deficits. To Improveperfrmance In the urban water supply subector, there needs to be delegaion f great opratil autonomyto the watersupply companies, together with stricter fhicW dscipline and accounability. An establishedwater supplycompany operating on a well-orgni, efficient,commercial basis mustbe assuredwhen considerationIs given to panslonof watr supplyservices or Inoductionof waterpollution control facilities. OnDy In jl way can cost revy and oper-aionalobjectives be certain. 1.14 Th ea demandfor waterpollution cool willneed to be folowedby the establi of autonomoussewerage utilities. At presentmunicipl sewae sytm ar mosly mnaged by municipalconstuction dartments. As long as there are no sewage tratment plans operatedby thosemnmicipalities, from a technicalpoint of view, it is logicalto includethe mintenanceof sewagesystems with the generalroad mainece. The construction of ewagetratment plants,however, requires efficient operation and mainteace of theseplas andthe controlof pont dischargesinto the sewagecollecton system, especially from Industry. The managementof !he billingand collectionof seweragecharges would be mostefficient if handledby the water supplycompanies. 1.15 NEPA and the prolcial and municipalEnviromnl ProtectionBureaus (PBs), as wel as UrbanConstruction Commissions (UCCs), have established guidelines and rl s on quanttyand qualityof industraleffluent discharged to sewersor to watercourses. However,it is oftenpolitically too difficultfor theseagencies to dealwith large industties which in manycases noe the majorpollutrs. Thus,pollution abatement measures, such as the levylns of dcares basedon effluentquality and quantiy,have ofte not been effective. The charges have frequentlybeen forciblydepressed so thatpolluting industries opt t continueto pay the chages ratherthaD take appropriatemeasues to reducepollution. Most provincia goverments are aledy awareof the needfor environmental protection, and some measues are alreadybeing taken Thereis an urgentneed to strengthenand equipEPBs and UCCs,and to trdn their staff to carryout their fumctionsmore effectively. 1.16 Very large investmentswil be madein the watersupply and seweragesectors in Chinaover the nextdecade and beyond. It can be assumeddat the urbanpopuation now servedwith water supply and sewerage systems is about120 million and tat this shouldincrease w 600 million(ess than50 percentof the totadChine wopulation)by 2010. Thisis an increase of 480 millionpeople to be served. A minimumInvestment of $150per personto be served, wouldimply an investmentof $72 billionover 20 years, or roughly$3.6 billionper year. In the Implementaionof such a largeprogram, there Is potentialfor wastingof resources. Ihere Is a needfor ineased peraatngefficiency and improvedconstruction practices and operation and . Iiherefore,there is a requirementfor betetr sector analysisand policy formlation, techical as wefl as financial,which would lead to rationalpriodization of investmenlts. - s .

D. PREVIOUSBANx GROUPINOLVEMENr IN THESEIOR

1.17 TheBank Group has thus far approvedsix projectsin the watersupplylsaton sector in China. These projects have, for the most part, proceededsatsfacrily, with tely in2plenentaton. tional and financial/commecialreorms bavebeen confirmed to be the majorIssues to be addressed.The projects are: (a) Rural Water Supply Projt' (Credit 1578-A, SDR82.1 million, 1985)-which financedequipment, goods, civil works, traning, and to developmentof managementand monitoringsystems for water supply systems in about4,650 villages,within four provincesand BeijingMunicipality. The project was completedin 1991 and a Project CompletonReport has been prepared(Report No. 11251); (b) ShanghaiSewerage Project (Credit1779-CHA, SDR 78.9 mlio; Lon 2794- CHA,$45 million,1987)-which finances a linkand interceptingsewer system to collect, transport and treat sewagefor disposal in the estuaiy of the Changiang;studies on managementand organizaion,sewerage tariff, BasinManagement, and sewersystem rehabilitation; and staff training. Theproject is beingimplemented on schedule,with project completion expected by June 1993; (c) MediumaSizedCities Development(Credit 2201-CHA,SDR 62.2 million, Loan3286-CHA, $79.4 million, 1991)-which finances invesm in educatin and health services, housing, tsansportatlon,water supply and sewerage, industrialdevelopment and pollution control in threemedium cities-hanphou, Shashiand Luoyang. Includedalso Is technicalassistance for urbanplanning and management. Project irplementationbegan in Jamnary1991 and is scheduledfor completionin December1996; (d) Uaonlng UrbanInfatur Project(Credit 2219-CHA, SDR 54.2 mIllion, 1991)-which assists in the financingof the nitial phase of a long-term investmentprogram aimed at addressingthe shortagesand poor qualt of water supply in the three cities of Shenyang,Fuwin, and Yingkou,as well as shortcomingsin urbantransport in Shenyang; -

(e) BeijingEnvironmental Project (Credit2312-CHA, SDR 60.1 million,Lon 3415-CHA,$45.0 million, 1991)-whichis financingInvestmanis in district headng,sewerage, solid waste management and industi pollutionabatement, and technicalassistance for environmentalmaster planning, hazardous waste controland institutionalmanagement; (f) Thnjin Urban Developmentand Envionment Poject (Credit2387-CA, SDR73.3 miUlion, 1992)-which is fiancinginvestments drainage,seweroge, solidwaste, roads, traffic management and urban transpor and for traing of municipalstaff in operations.Technical assistance is beingprovided to improve Tianjin'splanning and municipalmanagement capacities; and -6-

(g) RuralWater Supplyand SanitationProject (Credit2336,CHA SDR78.9 million, 1992)-whichis fnancing Investme In wat supply, san on facilites,health and hygieneeducation and tchnica asistancein 75 poor and water-scarcecourles In six undedeveopedInand prvinces. 1.18 Sectorwork carriedout by the Bank/IDAincludes: (a) the Sh a Secwt M (Urban),Report No. 4227-C , Decmber 1982;(b) ReportNo. 5206CCHA, May 1985,which Includes a chapteron spatialand urbanIssues; (c) an uban ctor surveyin Lslong Pvnce in 1985in coopeaon withthe UnitedNaons DoevopmentP mmeand the AustralianIntenational Development Assistance Bueau; and (d) an UrbanSector Study in ZhejiangProvince, China-: Challengesof RapidUrbanization, Report No. 6612- CHA, August1987, and (e) the EnvirownentaStr Paper, ReportNo. 9669-CHA,Apri 1992, which focuseson the developmentof long-termenvironmental protecton and naurl resourcespolicies and programs.

E. ROLEOF Tm BANKGROUP IN=E SEcroR 1.19 Ihe Bank/IDAsees its principalrole as fosterig a continug dWogueon sector issues and Wtions, thereby supporting and implenting the Central Governments decentraiztion strategyand delegaionof responsibilityfor the prvision of watersupply and sanitationservices tc municipalities.ITe BankGroup's apprach ams at the creationand/or shening of the imtitutionallfinancialframewors whichlead to lncreasesin financin fows and improvementsin: (a) cost recovery,(b) investmetplanning, and (c) Implementationand fiacing capabilitiesof localgovernments and the companies/entitiesthey conol. 1.20 Sufficientexperience has beengained tough BankGroup inesmet In hoe sectorto date to preparea comprehensiveanalysis of secora issues. The Cental Governm and the Bank Group are planmingsudies to prepare Provcial SectorDevelopment amd Investnt Plansduring 1993. Suchstudies would have a regiona focusand be caried out in one or two provincesinitially, with particular attention given to cost recoveryand opatonl efficiencyissues. Thestudies would produce comprehensiv sector rports whih wouldinclude a siuationanalysis, a sectordevelopment strategy, and a fiamewokfor investmentplans. They are expectedto be the modelsfor otherprovinces to use to developsound strategies and bases for futuresector investments. These plans also will pwvide guidance to the CentralGovernme on sector issues and form the strategicframework on which futurepolicy and investment decisionscan be based,as well as servig as a coordinaioninstubmn for the mobilizadonof donor sance to the sector. -7-

2 PROJECT AREA

A. UWANGROW ANDECONOMC ACmm

2.1 ChaugchunMunicipality has an area of 18,880km. Ihe area DOwcovered by the Cityof Changchunis pproximately107 mwand preed to grow to 150lk by the year 2000. Majorexpansion is expectedIn the southand southwestparts of the city withless epasion possiblein the eastand the west. Due to familysize limions and controlon city size in ChiUs,the populationof Changchunhas grownat a modestamnal rate of 1.5 percent during 1985-90. The populationof 1.8 millionin 1990is esdmatedto grow to 2.1 millionIn the year 2000, with an esimatedannual populaion growth rate of 1.5 percent,deasang to 0.7 percentbetween 2001 and 2010. 2.2 Cbangchundepends on its industryfor economicgrowth. In 1985 Industry accountedfor almost85 percentof the cits GDP;in 1990it rose to 91 percent Producvt of the light Industriesis slowly gaining momentm I 1990 light Induty conited 47 percentto. the city's Industri GDP,and in 1991almost 55 percent. Cumentyover 3,400 factoriesand enterprisesare locatedthroughout the city and includetruck, tractor, bicycle, railcar,Instrument, chemical, pharmacical products,texffiles and food factories. For example, an automobilemanufactring plant (VW) is currendyunder constructionand scheduledto produce100,000 units per year in 1995. The long-termplan for the city, as approvedby the Centra Govermment,encourage industial development in threemajor areas: (a) automobileand trsportlagrlcultural equipmentmanuf g, (b) food processingindustries, and (c) high- tecnology industriesserving (a) and (b). B. REAMAL ANDINDUSThIAL WAMR SUWLYSERVICES

2.3 Withinthe built-uparea of the city, whichis the servicearea of the Cangchun WaterSupply Company (CWSC), most of the residential,instiutonal ad IustrI users are served by two water treatnent plantslocated within the city. The water dItbuton system consistsof about220 km of trun mains(300 mm to 1,000mm), and manysmaller (ess tha 300 mm)distribution mains which branch from the truak mains. Dueto corrosion,low-quality pipematerid, poor Joints,and lack of systemmaintenance, unacuted-for wateris estimated to be about20 percentof totalwater production. The act statusof unconted-for wateris difficultto quantify;40 percentof CWSC'scustomers remained umned in 1992.Ihere were 6,000 commerial connections,of which 40 percent were metered and 2,500 huIustrI coectins, of which 72 percent were metered. The extg water supplysystem is deribe in Annex 1.

2.4 Althoughthe city is highlyindu.1rialized, it is situatedin a water-shortregion. Throughoutmuch of Changehun'srecent history, water supplyhas been unableto keep pace -8-

with ncreasingdomestic and indusial demand(see AMU-Water Demandand Sewag Forecasts,Figre 2).

2.5 Industryis expectedto grow rapidly,both in the mmber of establsbmen as well as in productionoutput. In recentyears, growthin both industrWand domesticwae demandhave been equal (about35 percenteach). ITe remainderrepresenmt stitutioa commercialdemand. However,with already approvedexpansion of industry and the inrouction of new activities,this proportionalsplit is eWpectedto chnge, wh Industy acounting for about 46 percentof demandby 1997 and residenial demandacounti fo 32 percent. 2.6 Resictions on watersupply have been imposed on bothindustria and dometc consumption,and availabilityof watersupply wfll continueto cOnDStrConsution t the presentproposed project and beyond.It is eated that the productioncapacity in the city, approximaely409,000 m3/d, fell shortof demandby about50 pecent in 1991. By 1995,ths shortfallis expectedto increaseto 60 percent. In 1991 the shortfaUlof water availablefor insttutdonaluse was estimatedto be 4.2 millionrm'. The averageanmial water shortage in the industria sectorsince 1985has been about 4 millionmi. Table 2.1 mmm the waW demandprojection through the year 2000.

Table2.1: WATERDEMAm PRojcTioN ('000 lIday)

Categories 1990 1995 2000 Growth Z p.a. (actual) 1990-2000 industrial 315 383 466 4.0 Residential 230 302 395 5.6 Institutional 107 118 131 2.0 Commercial 15 16 17 1.3 Unaccounted-for 167 205 252 4.2

Total 834 1.024 1.261 4.2

C. WATERSUPPLY MASER PLAN

2.7 In 1988a feasibilitystudy for a ChangchmnWater Supply Project was completed by he locd designinstiu (JilinHydraulic Exploration and Desig Institute;Chin Nothest MunicW DesignIbstitute; and ChangchunExploration Desig Inste). At the suson of IDA in December1989 and duringthe followingpreparation phse, the proje eanded fom a sw imestme projectfor waterproducdon for Cbangmn to a opei actionand investme plan in water supplyand pollutioncontrol for the cit. As a resul, a feasibilitystudy was undertak by internationalconsultants funded by the CanadianInteational DevelopmentAgency (CIDA). Through these studies, a long-termdetaied Water Supply Mter Plan was developedand priority investmentsidentified for ChangehunMunicipality. e iwesMintproposals includedadditional water tanmission mains, water treatment and -9 -

distributionfacilities; institutdonal developmet to strengthenthe wsr supply was also recommended.

D. R NA ANDINusruS IA SEWAGEDSwoSAL

2.8 Approximtly 40 to 50 prcet of the cityis seced byswers. Historicaly, the sewe systemin Changchunwas developedin the variousdrinae are usingthe shortest rout, to dischargeInto the streams,rivers, pondsor drainagecou withinthe cky. Some sewers,particularly those in the predominantlyindust easter area of the city, date to the 1930s.About 67 percentof the sewerswere built prior to 1940. Muchof the sewagecollecon system(60-70 percent) is in poorcondition due to lackof mainteanceand repair. In the older of the nine drainagedistricts of Changchun,combined sewer systemsconveying domestic, industri and stormwaterflows are common,with newer oonstion incoporatng separate sanitaryand stormsewers. The sewersystem consists of about324 km of combinedsewers, 243 km of stormsewers and 212 km of sanitarysewers. In 1988,a 3.2 km inteceptor sewer of 1,800mm and 2,200 mm concretepipe was Installedin the bed of the Ytong River from YonganBridge to DongdaBridge. Thisinterceptor sewer cmrently discharges raw sewageint the YitongRiver, downstream of the DongdaBridge, at a tempormy lowlift sewagepumping staton. A more detaileddescription of the exting seweragesystem and industial waste disposalpractices is givenin Amex 1. 2.9 The large industrialand populationconceon, togetherwith a lack of effectiveintrvention by ChangehunMunicipality, has cased srious waterpollution problems in the receivingwaters of the city. Most sewageis disbarged untred to the Yitongand Xina Rivers. Thesituation is mostsevere In the YitongRiver immedaty downseam of the citycore. Onlyone small,mixed domesticindstrial, treament pla of the No. 1 AutoPlant is beingopaed. In the 1960sa primaryteatment plantwas built in the northeastarea of the city, wih the intenon of reusingtreated water f rigation. For unknownreasons this plant was hardlyever used and is in a conditionof totaldisrepair. 2.10 An analysisof the existingsituation indicates ta the ratio of sewageto water supplyis about0.8. Thisfactor was appliedto the projectedwater supply (by use category)to projectthe sewagevolume. Table2.2 summaizessewage generation from 1990to 2000.

Table 2.2: SEwAGzPROUCTION PftRO rMON C(000mIday)

Categories 1990 1995 2000 (actual)

Residential 184 241 316 Industrial 252 306 372 Institutional 84 94 104 Commercial 12 A 13

Total 2 653 805 - 10-

E. SEWAGEDISPOSAL MA.¶ PLAN 2.11 Becauseof the lack of existingsewage collection and treatm faci, the achievementof full sewagetreatment objectives will req the establihmentof a well- mlWing sewerageentity, and large investments.Mierefore, a Swge DisposalMast Plan for Changchunwas preparedby internationalconsultants (para. 2.7). The Maser Plan recommendsa 20-yearprogram of investmentsfor trunk sewersand tratment faciities. A phased approachis proposedwith implementationover a relativelylong period of dme (approximately20.30 years),to resolvethe manyinterrelated problems. Phase1, whichwM be addressedby this project,will lay the basefor the implementationof such a strategy. The project lso will providethe first physicalworks of the program,indcting constuctionof an Interceptorsewer and a majorprimary sewage treatment plant on the YitongRiver downsteam of the city. Operationaldata needto be gatheredfrom monitring the primarytreatment facility to be ableto designthe secondarytreatment plant in the secondphase of impl i 2.12 A numberof other activitieswere also proposed, including the establishmen of a ChangchunSewerage Company (CSC), creation of industri estates,separation of housing fromwork places, development of a hazardouswaste management program, including a diposa site,and the establishmentof an effectiveregulatory and enficementframework. Ihe estimated cost of priorityurban sewerage investments was about Y 275 million($50 million). F. PUBC HEALTH 2.13 Publichealdt in ChangchunMunicipality is generallygood. Since the 1970s, there have been only isolatedand localizedoccurrences of typhoidand hepatis B (andsome fluorosis). The Governmentplaces a strongemphasis on diseaseprevention, spending about Y 1.0 millionper year on immunizationprograms specifically aimed at typhoidand hepatitisB. in additon, schoolsoffer extensivehealth educationwith emphasison good hygieneand sanitationpractices. Gastrointestinal diseases are of someconcem, but they occur mainly during the summermonts andare thoughtto be causedby a numberof reasons,not all relatedto the ciy's sanitauyconditions. Nonetheless, there is the potentialfor seriouspublic health problems in Changchun, particularly given the growing populaion, inadeqacy of extg water and seweragesystems, and ongoingindusti expansion. - 11 -

3 THE PROJECT

A. Pztojcr OBVES 3.1 The project objectivesare to: (a) Improvewater supply in Changchmn Muoicipalityto met the domesticneeds of the urban populaton and to supportindustial growth;(b) reduce industra anddomestic water pollution through physical wors, strengthening of ins"tions, developmentof reguations, improvementsin operationalmanagement, and changesin pricingpolicy; and (c)create a firstdemonstration project, where the lessonsleared can be shared with other municipalitiesin Cbina (paras. 1.11-1.16. The instiutional strengthningobjective aims at assistingChangchun Municipality in establishingappropriate sector institutions, policies and regulations. The present organization of wate supply and seweage servicesis fragmentedamong planning ad design,construction, and opeaions and mainteace (O&M)and is distributedamong several municipal agencies. Ihis has created majorproblems of coordinatio Theproject supports the concentrationof comprehensivewater supplyactivities in the CWSC,with a similarplan being proposed for the recendyestablished CSC. Theseactions should encourage more efficientuse of water resources,more prudent investmentdecisions, and strengthenthe planningand operationalcapabilities of CWSCand CSC.

B. PNoJcr DESCR]PnON

3.2 Theproject is aimedat improvingthe existingwater supply and sewagedisposal systemsfor Changdhun.The existing water supply capacity will be expandedfrom the present 438,000med 3 to 794,000me/d at completionof the projectin 1997,whfle a centralsewage treatmentfacility capable of providingprimary treatment for the city willbe constucted. The water supplyservice coverage is plannedto be increasedfrom 90'percet to 97 percentduring the projectexecution period. 3.3 The proposed physical works for the water supply project include the constuctionof transmissionfacilities to conveywater from the SecondSonghua River to Changchunvia the ChaluRiver and the ShitoukoumenReservoir, construction of pumping station at Maja, Tunshansi,Dasui, ShiteukoumenReservoir, and XinlichengReservoir, constructionof WaterTreatment Plant No. 3 andtemporary upgrading of WaterTream Plan No. 1, constructionof supplyand distributionsystem water mains in the City, and technical ssistnce (TA) to upgradethe technical,administrative and operationmintenancesills of CWSCto steamlinethe existingstcture intoa moreefficient and effectiveoperat company. 3.4 Theproposed physical works for sewagedisposa and environmentalpollution contol includethe constructionof an interceptorsewer and a primarytreament plant, and pwrcrment of eqipmet and instrumentsfor water pollutionmonitoring. The primary - 12- treamen plant(North Suburb Sewe TreatmentPlant) wil treat368,000 m'Id of sewg from the Ytong Riverdrainage area collection system. t also niludes ecncal assite to prpare for the implementationof the secondphase of the Changhumnsewage disoa masterplan, strengthenwater pollutioncontrol regulations and enforement In addition,as part of the nage mensupportot CSC,technical assistance s plannedto assistCSC to (a) ass polution loads, (b) developstgies for polutionabatemnt, (c) set dicag standardsfor Industries and (d) set pollutionchges andflnes. 3.5 Th1 instittional development forts of the projectinclude the provisionof consultantservices to: (a) assistIn project mplementaon;( reore CWSCad develop CSC;(c) developtraining programs for the staffof CWSCand CSC;(d) establishapropiat pricingpolicies; and (e) promotemeasures for waterconservation. 3.6 Detailsof the variousproject components are presentedin Annc 3. A sumary of these componentsis as follows: (a) Raw Water Transmission. Constuction of intake work and a low,lift pumpingstation (475,000m&/day) on the SecondSonghDa River at Maja, upstreamfrom City; a 5.2 Im low presr conduitfrom Maja to the Tuashazi boosterpumping stion; a 7.9 mntunnel at Laoyelw a second boosterpumping staion at Dasuihe;a 39.8 km transmissionpipeline (1,400 mm and 2,000 mm diameter)from Dasuiheto the dtig point on the Chatu River,22.8 km upstreamof the Shioumen Reservoir;and a 12 km acoess roadto the pipelinedischarge point on the ChaluRiver. (b) Urban Water Supply. Constructionof additionacapacity to an exisfingneW raw water pumpingstation at Sh Resevoir (263,000melday); an 8.7 km pipiHn (1,600 mm) from h to FPgniugou; a boost pumpingstaion at Fangniugou(263,000 ml/day); a 31.9km pipeline (1,400 mm and 1,600mm) to Wat TreatmentPla (WTP)No.1; an Inte andraw water pumpingstaion (234,000m?/day) at the Xhicheng Resrvoir, a WTP No. 3 (220,000m/day); a twin 13.4 km pipeline(1,000 mm and 1,200mm) fom XWichengReseroir to WTP No. 3; a pumpingstation at WIP No.1 and boosterpumping station at Zhengyang;and 193 km of new and replacement water mains in the distibution system (75 mm-1,200 mm). (c) SewageCollection and Treatment Constructionof a 10.4 km intceptor sewer (800mm-2,500 mm), and prima .sewap teatnt plant (390,000m3/day). (d) MiscellaneousEquipment and Vebieles. Supply and stlatlon of communicationand moniting equgnent; supplyof mie sequi nt for waterand sewageoperations and mantn. (e) Project DsIgn and ConstructionSuprvion. Foreigaconsultants will assist the local design companieswith detaied design of al comnets and be responsiblefor the qualityof the designs.Foreign consultats wimalso assistthe ProjectManagement Office (PMO) with constauctio supersin - 13-

(f Tecbncal Assitne (Capacitylildlg. Tehical assisan for: (i) a aagm suport pac eusg e to prvie techical, finanil operationsand a d tring adviceto the managemenof CWSC and CSC;and (i) implemeon of a toxic and hazardus wastemanagemet ad industriarelocaon stdies.

C. PROJECTPREPARATION 3.7 The CIne projectteam bas engagedfte samelocal design inst_e, which pred the oigia feasibilitystudies (para 2.7), to cary out detaileddesigns and the pre ton of tenderdocumenb. In addition,in August1992 the projectteam engaged a fim of ftelp consultantsto providebackup for the morecomplex design feures andfor assistance with spvi ion of construction. D. NwOJEcrCosr EsIMATuis 3.8 Totalproject costs, including contingencies, are estimatedat Y 1,377.4million M5251.4mMlion). Ihe freign exchangereqrement is $125.1million, or 50 peent of tota costs. Pice contingenciesare esdmatedat Y 121million ($22.0 million) or 11 percentof base costs. Table3.1 showsa bekdown of the projectcosts by majorproject component Detailed co estmatesare providedin Annex .

Table 3.1: SummARYCosT ETuMTes

Foreign y minilon S ilos at 2 it Lca. Jos Total 4cal Fore.gm Total of total wateTrb_aeuieSee 198 244 442 36.0 44.5 80.6 55 Urban Water SUpply 187 198 385 34.2 36.1 70.2 51 SewageColl.eCionITreatasIt 111 89 200 20.3 16.2 36.5 45 eCrbsM1=aAse1ttanCe 34 36 70 6.3 6.5 12.8 51 aLsiSe COst 530 LIZ 1.7 98 I,103.3 ,200.1 Pbyoa Coutiuonless 78 82 160 14.3 15.0 29.3 51 PriceCoatugencies 82 38 120 15.2 6.8 22.0 31

TotalProject cost /a {90 687 1.377 1J .3 125.1 ,251.4 Intereetduring ConstruCtion Lk 82 0 82 14.9 0.0 14.9 Total YinanCinaRAufred Ma 687 JAM 14. 125.1 266.3

LA ludinglad cst of Y 54.1million ($9.9 million). ^anI duig consacon is cacuaed baed on the pojecteddi e --des

3.9 Theproject cost estmaes arebased on etmates fom the consuls' feasibility sdes. The uni prices used by the conutant were based on unit prices from recent constuctio con s in China and quotations firom local suppliers. Those costs were updated to mid-1992 price levels during appraisal. Physical contingencies of 15 percent on all wate suwpplyand s a civil works and goods and 10 percen on technical assistance, have been - 14-

allowed.To providefor inflationduring project Implementation, the followingamnal escalation rates have been used: for local expenditures,6.0 pecent for 1993tough 1998;for fo1re expendIures,3.7 pecent for 1993through 1998.

E FINANCaNGPLAN

3.10 Ihe proposed IDA Credit of $120 million equivalent would fnce about 50 percent of the project costs, exclusive of land acqui on cost and interest durn consruction. Other sources of financing include the Central Governmen, Juin ProvincIa Government, and Changchun Municipality. The Cental Govenment, lJin Pmvica Governmentand ChangchunMunicipality confirmed to IDA their agreem on sha of project fuing as equit contribudons. The financingplan for the project is smmuized in Table 3.2. The Changdum MunicipalGoverment should not have any problems in meedng its share of project cost. CMG will conttibute an averageof Y 36 millionper yea wit high contation of Y 55million in 1996 and Y 49 million in 199S. This is well witin the city's normal capital spending. The city plans to spend a total of Y 177 mlion in 1996 and Y 161 mflion in 1995 for capital construction.

Table 3.2: PRonwr FINANCING PLAN ($ million)

Local Foreign Total Percentage

Government of China 25.5 5.1 30.6 12 JilinProvince 54.7 0.0 54.7 21 ChangehunMunicipality 61.0 0.0 61.0 22 IDA 0.0 120.0 120.0 45

Total 141.2 125.1 266.3 100

3.11 ChangchunMunicipality has agreed to increasethe water tariffs to take efect as of Jamuary 1, 1993. This increase isnecessary to help fane the project Changchun Municipalityprovided IDA with evidencethat the tariffincrease has been apprwved,and will be implementedwith effect from January 1, 1993 (par 5.10).

3.12 As a result of increasesin project costs over earlier estimts,the municipality's sharehas also increased. ChangchunMunicipality has providedIDA with a schedule,acceptable to IDA, of the funding contributionsand schedule of disbursementsfrom the municipalityfor 1993-95.

3.13 The IDACredit wouldbe made to the Centr Govenmen on staxard terms for a duration of 35 years, including 10 years grace. The proceeds of the Credit wodd be onlentto ChangchunMunicipalith- to be repaidover 15 yearsinciuding 5 years of grace at an interestrate of 5.1 percentper annum. Themunicipality would onlend the proceedsto the newly createdCSC at similarterms and to CWSCat a vaiable rate equalto the Bankrate plusa spread of 1.5 percentper annum.CWSC and CSC wfll bear a fixedcommitment charge of 0.5 percent ad th foreig exchangorisk. he exeton of Subsary Loan Agiwnents betwn Oianghw MwdpaltY and the CVSC 4ad CSC Is a condton of e,tlWnes f the IDA 0odlt. AsepaweProjctAgrem ndudigoperatona,flnanclal andmonoiEngconans, wil be execed beween DAand OaangchunMwudpaity. Aprovalof theDevelpm Cred Agrmen and AwmPect Areement by the State CorcU Is a COton Of Crdt (5clees.

F. PROjCr MANAGEMENTAND IMmnTTON

3.14 Project implementationis the direct responsibilityof the Qangchun Water Supplyand Environmena Project Mangement Office (PMO) located in CWSC,and wil etend fiom 1993to 1998.lbe PMOwas established on March 19, 1992and appears to befuctionng well. It reportsto the High-LevelLeadership Group (HLLG) under the ChargchunMunicipal Goverment,under fte directionof the Mayor,three Deputy Mayors and 11 BureauDirectors. The m_as of CWSCand CSC are also includedin this group. The SeniorEngine of the North EastDesign Institte Is the PMOManager. A ChiefFinance Officer (CFO) has been 3ppointedand a plan for PMO stffing and acilitieshas been submittedto IDA. The Chief FinanceOfficer and keyfinance staff will be on deputationfrom the ChangchunFinace Bureau to failitate fancial functions.Ihe PMOwill executethe project,and superviseand monitor al contr and mainin the projectrecords, including the originalcopies of all contractsand puchasingdocuments. It wil operateon behalfof CWSCand CSCunder writ ageemen. uances wereobtained that the ChangehuMurlcaly wUImainain the PMOwith staffg andfactes acceptableto IDA. BecauseCWSC and CSChave not undertakensuch a large cnstructionproject in the past, they willbe assistedby consultantsto be retainedunder terms and conditionsacceptable to IDA. The PMOhas prepareda satisfactoryproject construction supervisionplan,includingstaffing. Maininingthe PMO,with stg andfacilities acceptable to IDAwould be requiredduring Implementaion of the project

3.15 Day-to-dayconstruction supervision wiUl be provided by local consulting egieers assistd by foreign consultants. 'Te consultants'duties includeverification of compliancewith specificationsfor worksand goods,supervision of constuction,tesig and commissioningof completedworks, advice on trainingof staff to operatethe completed facilities,and preparationof documentsfor procuringtreatment plant equipment.

r"ject Rept

3.16 Underthe project the PMOwill be requtredto prepareand submit to DA quarterlyprogress report. CWSCand CSC wil be requiredto preparea year-endrpor swnmarldngeach conpy's actiies duringthe year, as wellas semannualsummay reprs on the main deweopmentsand changesIn the corporateplan.

G. LAMDACQUismon

3.17 Land wil needto be acquiredfor constructionof the water ransmissionline, water treatment and distrbution facilities, and sewage treatment plant. The PMO is in the process of acwuringthe 98 ha of land for constructionpurposes and another 448 ha on a tmporary basis for the project Out of this, approximately428 ha is neededfor the watr tnsmission line, 8 ha for the water treatmentand distrbutionfacilities, and 60 ha for the swge treatmentsite. The land is manwlyused for agriculturapurposes. Where wors are - 16 -

conructed on agriculturl land and buled ae cosucto the lnd would be rented during costructio and returne to its orgn use after completionof work. 3.18 CWSCand CSC (Pam 3.29)are rponsible for iniiat land acquisitionand paying compensation,and the Cbangchu Planing Commission(CPC) will ovse and coordinaethe activities.lhe CPCanticipat no difficultyin carryingout landacquisition and resetement. -he purchaseof the land willbe mostlycony?leted by 1993and wil not det projectimplementation.

H. POCUREoMET

3.19 ProcurementarTangemens are summarizedIn Table3.3. Table 33: fRocuRENrr AraANc3mem (S million)

Procurement Method Project Component ICB LCB Other NIF Total

Civil Works water Supply 85.5 14.1 10.6 - 110.2 (30.6) (5.6) (4.2) (40.4) Sewerage 36.7 4.0 0.2 - 40.9 (14.7) (1.6) (0.1) - (16.4) aouiumentand Materials Water Supply 61.4 9.5 - - 70.9 (45.0) (7-0) (52.0) Sewerage 3.3 - 0.3 - 3.6 (2.4) _ (0.2) - (2.6) Other Land Acquisition - - - 9.9 9.9 (0.0) (0.0) TechnicalAssistance, - - 15.9 - 15.9 Training (8.6) (8.6)

TOTAL 186.9 ILI2 26.9 ._9 251.4 (92.7) (14.2) (13.1) (0.0) 1120.0)

Note: Figuresin parenthesesare the amountsto be financedby IDA, including contngencies.Other procurement methods include direct contractng of wodrs (e.g., powersupply), and consultantservices under tedhnical assistance and tainin. NIP - Not IDAFinanced.

3.20 Worb. 'here is a tot of about$151.1 million of works in theproject and about$122.2 mfllion (81 percent) of that wouldbe procued usingICB proedus. Domestic conactrs wouldbe givenIDA's normal 7.5 percentdomestic preference during evaluaton of bids. ICBprocedures will be usedfor all contractsover $4.0 million,i.e., eightcontracts. Th - 17-

remaWinworks are too small,scaed or scheduledtoo far apart to be put intopackages tat wod be of iterest to foreignfirms. Of the rmainng works,$18.1 million wil be LCB nd $10.8million will be directcontracting. LCB procedures will be used for the manyconac requird to makeimprovement I the waterdistribution systom and to constuct severalsml officeand dormitorybuildings. Direct contracting will be usedfor the manycon s that will be made with the localpower companyto periodicallysupply connections to the many new buildingsand stationsplanned under the project. 'hM electricitycompany Is the onlyfirm that has th approptiatecapabilites to properlymake these connections. 3.21 Goods. Ihere is a total of about$74.5 millionof equipmentmaterials and veicles (goods)in the projectand about$64.7 million of that (87percent) would be procured singICB procedures.Domestic manfcturers wouldbe givena preferenceequal to 15 percnt of the c.i.f. price of importedgoods or the actualimport taxes, whichever is less, in evaluating bids. All contacts for goodscosting $200,000 or more equivalentwfll be awardedunder ICB procedures. Conacts costingless than $200,000will be awardedunder LCB procedures acceptableto IlDAup to an aggregateamount of $9.Smldlion. Contracts costing $S50,000 or less up to an aggregateamount of $0.3 millionmay be awardedon the basisof intnatial or local shopping. LCBprocedures would be used to procurethe smallquantities of watersupply or seweragemateril neededat varioustimes over the life of the project. Shoppingprocedures wouldbe usedfor the verysmall purchases of thosematerials, which are neededoccasionally. 3.22 ConsultingServices. Contractsfor the employmentof consultantswould be carriedout : accordancewith IDA's Guidelinesfor the Use of Consultants.Local consultants andcounteart staffwill be engagedor assignedfrom the localgoverment departments to work alog with foreign consultantson detaileddesign, preparationof bid documents,project constuctionsupevision, and conducdngof project-relatedstudies. Consulting fm wl be nvitedto submitproposals for conductingproject-related studies. Consultantshave alreadybeen retained to provideTA for projectdesign and supervision.

3.23 Al works and goods would be packagedwhenever practicable to attract competition.The procurement schedules (Annex ad list of contracts(Annex S give detailed projecons on howand whenthe 23 majorworks and goods packages would be put to bid and constUcted.Ihe CWinaNational Machinery Import and ExportCorporation (CMC) has been employedas the project's procurementagent. CMC is an experiencedand competent prOCUrementagent which is very familiarwith the Banks'requirements. The projectwiUl use the standardbid docume that wereprepared by the Mistry of Fance and approvedby the Wodd BankGroup. 3.24 Relew by MDA.AU works packages (10 contracts,90 percentof the works) In excessof US$3million and all goodspackages (10 contracts,94 percentof the goods)of $200,000or moreand all consultingcontracts (8) wouldbe subjectto the Ban's normnlprior review. Othercontracts would be subjectto selectivepost-award review.

L DI USEMEmS

3.25 To expeditedisbursements, a SpecialAccount with an authorizedallocation of $7.0 mfllion,representing four months'average disburs , wouldbe establishedin a bank acceptableto IDA. Replenishmentwould be madeon a monty basis or wheneverthe Special Account is drawn to 50 percent of its inital deposit value, whicheveroccurs first. -l18-

Disbursements fortaing ando ntrcts for ci worksi and gd, valed at less ta $200,000would be madeon thebasis of Statmet of Expedir (SOBs)to be cefd by otePMO. Docume upportingthe SOEs would be reaid by thePMO nd madeavalae duringthe courseof IDAsupevisoion misions. AUother will be madeasint fuly dom epeanditures. 3.26 TheIDA Cred wouldbe disbusedagais (a) 40 pen of expenditureson civilworb; (b) 10 petcen of foreignexpenditu, 100pcet of localepedum (ex- factorycost) and 75 prcent of otherlocal expeue forother em proced locally; ad, (c) 100prcent of expenditureson const' servicesand tranig. 3.27 Theproject is expectedto be completedby December31, 1997and the Credt dosingdate would therefore be December 31, 1998.A scheduleof esmated Isbursementis givenin AM6. Retroactivefinancing of upto 3.0mili isbeing pvidd fo ditu ured afterMay 31, 1992,covering possible inital civilwors andgoods conac, andthe desiupevision consultancycontract. J. PRJuCTr SEON 3.28 Projectsupervision by IDAwould require about 95 staff-weeklover hlie of theproject, of whichabout 25 Staff-weeswould be at headquatersfor the riew: of progrs reports,procurement actions, corepondence, etc. ad 70 staff-weelswould be In the field. Superision wouldbe providedby sanitaryengineerig and financialstaff as well as other wecialstin wate poluton controland enronmental Issues. ITe borrwer's contbuto to sv isio wouldinclude regular rqerng on imple progress.A supervisionplan is givenin Anex 7.

K REsr

3.29 Ptojectpreparat incudedthe preparati ofa lnodacqisition and resettlement planfor the affected population. The land requiement have been divided into two categories; temporaryland use and perranet landuse (orlad acquisition).A ResettlemeAction Plan has been developedin coordinationand coopation with ChangdihunMuipaity and the ProvinciaLand Management Bureau. This Plan provides details coneing Ind acquisiton, estimatesof affectedpersonM, compensation and reimbursemet costs, resettlement of about60 persons. IDAhas reviewedthe land acquisitionand resetement plan ad has foundit to be satibctoy. Canylngm the reseulent plan n a anuer ad accorftg to a shedule sadia ly to 1DAIs reqrea -19-

4 THE IMPLEMENTMGAGENCIES

A. I1mwL nm Am OPERAIG AGNCIs 4.1 CWSCwil be responsiblefor constiucon, operato ad _ of the completedwate supplyfaities (see deaded dscripton In AzM . CWSCIs reasonably welloperated, but It wiUhave to grow and improveto keepup withIncraed demandfor mor waer ad ber qualityservice. CWSCwas fomed In 1932 and is whollyowned by the CbanghuWkMunicipality. It is self-finning and maintins ts ownset of accounts. IDAhas rvewed * existingand proposed legal documents, Including CSC's c er, normallyrequired for the legalestablishment of CSC, andhas foundthem to be satsfcry.

4.2 Ihe WaterResources Bureams of Chagchun andJilin Pwvinceare resoibe for the management,operation and nmntenac of the source wors, ( and llcheng Resevoirs),while CWSC is ronsible for transportingraw w , andtreatig and distributn I The ina and assion facilitiesconstructed under the prject wil be the property.of.CWSC. The newly formed Changhui WatResources Company(CWRC), under the Chagdiun WaterResources Bureau, may be contracd by CWSCto op and maintain the watr Intakeat MaJaand the transmission frm Majato the Shitoku_ Reservoir.In that event,th terms and conditionsof sucha contractshall be to IDA. Auw eswie ob e thatJln Proce anddhe mwncialtyf Oaagdc wil manta ad reglarly npe the XldSg and Resfu rewspctvaely. 4.3 Cutly, thereare no forma agreemetsbetwe the Pvincld ad Municp Wat ResourcesBureaus and CWSC. CWSChas agreedto eslish foma contractswith ths Burems. CWSChas provideda copy of the proposed e _ regg wae availability,pricing, and faiities n to IDA, whichwer foundto be _bq. sgnig heagAeem ets a condon of Cet ejfrctlh. 4.4 CSCwill be responsiblefor the contuction, opeaton ad maintenanceof the sewage collectionand treatmentfcities serving Changchun. CSC wa establishedby ChangchunMunicipality in eariy 1992, usingthe eisting staff employedin the municipal seweag services. B. ORGAnI N AN MNAGMNT OF CWSC A CSC 4.5 The MunicipalFace Bureau,Ru and UrbanConstrucdon Commision ad the Municipalplanning Commission sprvise e Municipa Bureas ad Companiesand establishpolicies and budgets, and approve capital exp_a. CWSCand CSC mst proposalsare submittedby thei resective bureaus to tie Face Bureau ad Plamning -20-

Commissonifor review. Theproposals ae thenpassed on withr endons to the Mayos Offlicoand the localPeoples Cone. ThePrice Bureau and the FinanceBureau must approve iffnaes.

4.6 CWSC has agreed to adopt a new organiaton and responsibiiftes by Decmber 31, 1994 &a. 4.9). lhe new arraUgementesembles the defnion of an urban watr supplyutility in the Iuialized world, with most componentsof the opeaton nd mahame sevice underthe authorityof CWSC magement. Even though, in tem of Interatial practice,the newlyacquired autonomy and responsibflitiesof CWSCis standd br Idustriized counries, it is a recentconcept for China. As such majorchanges demand attitudechnge, implementationof the new organizationand applicationof its newly won managementauthority can take place only gradually.

4.7 CWSC'snew o ional strucue shouldprovide beter commnication, clearerlines of responsibility.It shouldalso reducethe GeneralManager's direct operational responlities, whfleincreasing his effectivecontrol through middle line managers.Figure 1 in Annex showsthe structre which has been agreedwith CWSC to be implemene by December 1994. Under this structure, CWSC will have five D Managersrporting directlyto the GeneralManager. 4.8 lhe objectiveof the newlyformed CSC Is to collect,treat and disposeof all sanitay sewagein Changchun,and to collectand divertstormwater in the Changehundrainage bain awayfrom developedareas, thusreducing flood damage. CSCwould meet the statory requirementand crteria set by the EPBand the policiesof ChangchunMunicipality. CSC will be developedwith seven departments, reporting to a GeneralManager. Its objectives,stucture andrespnibilities are describedin detailin Annex . Theformation of CSCrepresens a major strentheningofChangchun's capacity to Improvesewerage operations, in tem of management, decisionmaking, and operationsand maienmce.

4.9 Muchof the dayD-tdaycontact with water conumers is throughCWSC's distict offlces. Tbisincludes both service and commercialmatters. Thiswill be equallyimportan to CSC. Assrances wre obtalnedthat CWSCand CSCwUl engage consutasu, by Decmber31, 1993,wt Termsof Referenceand agreedacdonplan and timing (Aw.LV accpable to IDA, to work out a plan to improvethe managementand operations,in particua the district operat , and to upgrade the physicalfacilities of these officesas well as to purchase ewipmet as part of the technicalassistance under the project. By December31, 1994,both coaanes wilprovide IDA wth hs acton plan, In aform acctble to 1DA. Thistogether withth abilitation andnew works should improve distribution system and sewage collecton system management, and result in less costy and more energy efficientservices.

C. ACCOU?M ANDAUDrnNG

4.10 CWSCkeeps its accountson a double-entryaccrual basis. I is one of onlytwo watercpanies in Chinato havea Class2 accountngclassificadon (the other is Beijing). No watercompany has a Class1 raft, thehighest raing. UnderChinaes ongoing reform program, newaccounting standards that more closely resemble Western accounting praices are scheduled to becomeeffective in 1993. CWSCwll modifyits accountngsystem to providereports to meetCh reporig and Westernaccountig standards. CSCwill set up a similarsystem. Projectfimds wil be usedto povide necessaytechnical assistan andpurchse computersto -21 - implemet the nowsystems. TheProject Office wll keepall projectaccounts and suppordng documents.As withother IDA-finced projectsIn China,projct accountswill be maintd in accordancewith the StateConstruction Unit ccountn sysm. 4.11 TheChangchun Finance Bureau and the ChangehunAudit Buren, unitsunder the hIlinProvincial Audit Burea, performaudits of CWSC'saccuns. However,.thr Is no reuar annualaudk. Assuranceshave been obtied uthaannu audts of (a)project accus, (b) te CWSCand the CSC accouns, (c) the Specil Accout, and (d) the Samentr of EWenditure(SOEs) wi be carriedout by auditorsacceptabl to IDA and conq*e and sew toIDA withn sLrmonths ofthe end ofeachfiscalyear. hefonmatsafthe accountsad audJts also will be subjectto IDA's reWewand aproval. TheForeig Investm AuditDept of the StateAudit Adminion wil be responsiblefor anmnalaudits in the same manneras other BankGroup projects in China. A separateopinion wl also be giv the auditof the projectaccounts, Special Account and SOEs.

D. BKWG Am COLILCnON

4.12 CWSCbills about376,000 accounts using a mual system. Until recently, viualy all accunts were collected. In the past two yeas, there has been an inrease in amounsowed by publicenterprises but CWSCexpects a recentgoverament directive to result in paymentsby theseorganzations. Even, includingthese increased receivables, they were still lesstan one month'ssales at the end of 1991,which is verylow compared with other couries. 4.13 The ConstructionBureau currently bill wastewatercharges based on water consumption. All domesticcustomers and some nondomesticaustoms are exemptfrom charges. Chargesare leviedonly on thosewho are connectedto the system. As a result,about 11,000 customers are subJectto wastewatercharges. CM3 collectsonly about 75 percentof the chargesthat it levies. 4.14 By December31, 1994,CWSC wUl develop a new coapred bilg system at wil be usedfor both waterand seweragecharges. ProJectfunds will be usedto deveop the system,purchase equipment and train staff. CSCwinl pay CWSCa fee for the sewerage chargebilling. Assances wereobained atChgdca Mkcpallty wl authze the bilng a/seweragedcarges to all waterusers and causedds extensionto be carred out. T action togetherwith cmbining the waterand sewerage bills shod resultin increase seweragecharge collections.

E. PERSONNELMANAGEMENT

4.15 In 1992,CWSC employed about2,400 permanent and 700 temporary staff. hi translatesinto a staffingratio of about 8 employeesper 1,000 connections,which is very reasonablecompared to otherdeveloping countries. Whie CWSChas a welldevelopedstaff complement,the sewerageoperations are understaW in all discplines from enginrig to operations.The totalstaff complement for the districtsewerage crews is 168wher Facity Managementemploys 165 for a tot of 333 employees.Changcdun Municipality has madea preliminaryproposal to increasestaffing of CSCto about1,600 people by January1997, to take accountof the newfacilities being put intoservice. A preliina stffg proposalfor CSChas beeosubmitted to IDA. Thisplan wDI be developedin furter detailby the TA (pam 4.9) and fndalizedby December31, 1995. -22 -

4.16 CWSCand CSC will crea a numberof posions withnew resosbIities. To ovecome the gap in exerience, ChangchunMncWity is planningto ntit training progam Inuding: seminas and wodrhops;hands-on d ans andtraining In the ue of equipme producti andloracquisition of videota for dwstd4propertehniques forus Inthe administatve, accounting and techncal sectors; cresponden coursespovided by thetraning group in CorporateServie; inernationalecha programs. 4.17 CWSChas agreedtat, underthe project, trann ficilitieswill be establhed as part of to nw war teatmentplant. lhese facities areIended to serve s a modelfor NorteastChia andwill include both fmal hands-ontraig in watersupply system and sewerageoperations. Funds are provided under the project forthe constuction of dhs facHies as partof th treatmentplants, as wellas forthe purchas of equlpmentThe trainn programs fo thesefctie wi be deoped duing tha executionof the ptojectby the cnsutan providingthe management support (paras. 3.6 and4.9). -23-

FNANCIAL ANALYSIS

A. PAsr ANDCURESNT FANCAL CONDTON 5.1 CWSC. Tablesin Ame3 showthe resiutsof CWSCsopations overthe past tee yearsand the projectonsdthough 2001. CWSCreturned a smallprofit in 1990,following a taiff IncreaseIn September1990. At tha time, ChangBu Municipt increased indutrial and commeial ar by 67 percen while doublingdomesdc metered tariff. However,CWSC Incurreda loss of Y 0.9 million in 1991, after hages for Inter and depreciation.WiWh no a Increase,k expectsto lose Y 4.7 millionin 1992. Th lossIi less ta the de o charw of Y 6.0 million.

5.2 CWSC'sreven 8ceasedfom Y 32 mllionin l99toY60 nlion 1991, but wagesand power costs incrased signllicantlyin the past twoyears. In addion, sice July 1990, CWSChas been payingabout Y 6 millionper year for raw water. The Provinca govemen has :pproveda 20 p t increasein tis dharge,but Changdcn Municipalityhas not yet implementedi.

5.3 CSC. It is difficultto demine the fuilcosts of sewerageopations because Chanagm Municipalit koe the accountson a cash basis as part of its genera municipa accounts. In 1990, less than Y 8 mllion was collectedfrom tariffs. This is obvioudy inadequa in comparsonto CWSC'sbudget of Y 70 million.

5.4 Assweraeswd obtabdthdatCNC and CwilSCmplement, byDecember31, 194, aprogramfor tputwd plamdg andjoectng, andpivde byDeweberI qfeach ye one copyoftheforesngpoJecos to IDA. heywllaso a lbeme, by Decmber 31. 1994,a managem nnadonsystem, with monhy bobmadoI on wtr demand,revm e and cos and evy sa monts provIdean aaed copy of suchprjecdos to DA. Ihe nagement idnaton systemwould inludean accountingsystomthtiscapableofprodng finai repots in bothChese and Westernformats.

B. BALANCES&i ANDFED Asms

5.5 The Bala Sheetfor CWSCis shownin hAM. The majorchange in the Bala Sheet,other thn thoseresulting from the project,is the additionof Y 270 milion in fixedassets between 1990 and 1m3 as the resultof a Japanesefunded program to Improvewater tuent capability. ChangdunMunicipality will providethe enire amountto CWSCas an eqit ntbio CWSCwil Includefull depreciation In Its tariff calculations. -24-

5.6 ]Becauseof the governmentalnature of current opetions, Cha_gh Municipaltydoes not have tie data to prepare a BalanceSheet for CSC. Changchun Municdplitywill have to identifyand estmatethe valueof fixedasset transfrred to CSCprior to the preparationof the first years financialreports. Asranes uereobtaied that Smangchun Muncpaity will, by Decmber 31, 1993, r=nr ownz* of alpubikc sew aser o%wed by Oangdu nmicipalityto CSC. It is not likelythat CSC will collect any of the outtanding receivables,so CSCwill not includeany receivablesin its initil BalanceSheet

C. CurmN WATERSuPPLY AND SEWRGE TA mS

5.7 Water supply tariffs are based on metered consumptionfor 89 percent of CWSC'saccounts. The charge is Y 0.5 per cubicmeter for commercial and industi cutomers and Y 0.2 per cubicmeter for households. Unmeeredhouseholds are chargedY 0.07 per personper month. ChangchunMunicipality last revisedtariffs in September1990, when Ihey were incaed by 100percent for domestc customersand 67 percent for nondometc customers. CWSCalso collectsfees for connectionsand disconnections.The triff schedule includespenalties for late payments,but theseare seldomneeded. 5.8 SinceJanuary 1992, Changchun Municipality has been chargig sewerge fes of Y 0.21 per cubicmeter based on 90 percentof waterconsumption, up fromY 0.1 per cubic meterbased on 90 percentof waterusage. About10 percentof the customersare exemptfrom payment. Assuranceswere obtainedfrom Changhm Muncialty to end al commeil and dmesic exempdonsgradualy and end ths prace by the tme the projectIs conpted. In addition,levy a chge of Y 10 per squaremeter on new construcdonfor developmentof nw waterdistribution capacity.

D. FINANCALPERFOiNCE FORECASr

5.9 BothCWSC and CSCwill have to increasetariffs as a resultof the constuction of new facilitiesunder the project. Assuranceswere obtained tt sush tarW wl hae to generatesfdclent revenueto coveroperation and mainenancecost, exclusiveof iest, plus deprecationor debtservice, whidever is higher. Operatingcost shouldiAdell paymes to ployeesas wel as all minorrepairs. Changclunwill ensuredtat CWSCand CSC wl retainal profts duringthe constuctionand debt rpaym period. 5.10 Water Supply. CWSCwill increase tariffs by an arage of 68 percentin 19 (20 fen per 1,000liters for domesticand 30 fen per 1,000ltes for nndomestic co_smers, withefet fromJanuary 1, 1993),to providefunding for its portionof the local shareof the projectcosts. This wouldbe adequateuntil 1997,when it is estimatedthat it wil have to increasetariffs by an averageof 20 percentto coverincreased operatng costs and depreciaon fr the newfacilities. An additionalincrease of 9 percentwill be requiredin 1998. 5.11 Sewe. CSC wil not provide any fundig for the project during the onstructionperiod. After constructionof the facilitieshas been completed,however, it will coverall costs,including depreciation. In orderto do this, CSCproposes irasing Iffs and harIng all water customersas wellas chargingbusies withown watersupplies, who are connectedto the sewagesystem. In order to do this, tariffswi have to incre by about 100percent for domesticcustomers, based on 90 prcent of waterusage. An esmated incom statementfor CSChas beenprepared and is includedin Annex9. -25-

6 PROJECT ANALYSIS

A. PRoJECrJUSTICATION

6.1 Changchunhas developeda relativelyintegrated industrialbase which includes automobiles,machinery, chemicals, pharmaceutical products, paper, textiles, electronics,plating, food, etc. Industryremains the main influenceon economicgrowth in the city. However, water shortagesin the recent past have seriouslyimpacted industry's ability to either mainain current production levels on an annual basis, or to expand. In 1991, water rationing resulted in rates of industrialproductivity lower than wouldotherwise have occurred. With constructionof major runk sewers and introductionof primary treatment of sewage, the project also will reduce pollution in the rivers flowing through Changchun. Through the project, the two institutions responsiblefor water supply and sewerage, CWSCand CSC, will be strengthenedin terms of institutionalstructure, management,operations and mainnce, trainingprograms and improved financial viability.

B. IZAsr-COSr SOLUIMON

6.2 The selectionof the water supply and transmissionalternative, as well as the appropriatesewerage system for the city, have been subjectedto rigorous least-cost analysis. A comprehensivestudy was made of alternative schemes for meeting the pattern of growing water supplydemand and determiningthe least-costsolution for treating Changchun'ssewage.

6.3 An evaluationmatrix of alternativeswas constructed(five in water supply and four in seweragemanagement) in order to accountfor the key factors that have an impact on the alternatives. The evaluationswere rated against a number of parameters. For the water supply alternatives these included: (a) sufficiency of supply; (b) low present value of cost; (c) environmentalconsiderations; (d) system reliability;(e) system flexibility; (f) reductionin redundancyof existingworks; and (g) minimizationof jurisdictionalconflicts. The parameters evaluated in the sewerage alternatives included: (a) low present value; (b) enronentat consideradons;(c) sewagereuse; (d) systemreliability; and (e) system flexibility.

6.4 On the basis of the analyses conductedand the evaluationsoutlined above, and fiurtherconfirmed by sensitivitytests, a least-costWater TransmissionAlternative and a least-cost SewerageManagement Alternative were recommendedfor implemention.

C. ftoJrcr BENEFm

6.5 Ihe proposed project would provide urgently needed water to the Changchun MetropolitanArea, eliminatingthe requirementfor significantwater rationingfor residencesand -26 -

idustries. It wouldalso introducethe first opeationalprimary swage teatme fayciliyin Changehunand, under the technicalassistance progrm financedby tXeproject, would assist in the developmentof a strategyto deal withtie city's resultanthaardos and nusi waste. The projectwould improve the eironmenta qualityof the area, the stadard of livig of the localpoulton, and economicproductivity of the majorIndustries. Furthermore, by reducing leakages,rehabilitating pipelines, and contucting waterand sewage trtm facilties,it would decreasethe potentialhealdi risk posedby possiblesewage infiltration into the water supply systen-

D. EcoNolc RAT OFRzuRN 6.6 The economici nternalrates of retrn (EIRR) of the two main project components,water supply and sewage,were calculated separately. The combined BIRR for the projectIs emated at 13 petcen. For the watersupply component, two main beneft were quafied. The first includedimputed benefits of increment watersupply for resdnt and institutionauses. This is derivedusing retail water rates, to be introducedin January1993 (Y 0.41m'for domesticuse andY 0.8/m`for instittionaland commercialuse), as the proxyfor the benefits.. The secondquantifiable benefit included value added estaes of industrial productivityresulting from the intoductionof an increasedwater supply. This analyis was based on the review, "IndustrialProduction Shortfalls Due to LimitedAvability of Pped Water (May 1992),prepared by the Changchunmunicipality government, which esmated an indusi productionloss of Y 0.5 mIion annuallysince 1985. For purposesof the eonomic analysis,It was assumedthat the "valueadded" benefit would approximate 25 percentof the esimatedindustrial production losses per annum. It wasfurter assumesthat the benefitwould remain constantduring the life of the project. The resltant EIBR for the water supply componentis 11 percent. 6.7 Even wihi the inclusionof the *valueadded" benefit, the rate of retun underestimatesoverall project impacts on the inhabitatsof Changchun.The reasonis tat, as noted In pan. 6.5, the introductionof an adequatelevel of safe and reliablewater supply wi greatlyimprove living sundards, specificallyin terms of health and generalwelfare. These benefits,although un tfle, are expectedto be significanL

6.8 A similaranalysis was conductedfor the seweragecompo L In this case, incrementalsewerage tariff revenue.wasused as a prow for benfts (Y 0.511/nfor domesdc and commercialuse, and Y 0.5/in for industrWand instittionalue). Sewera demandwa basedon the assumptionthat: (a)20 percentof the watersupply available for salewould be lost roughleakage, etc.; (b) approximately6 percent of the watersupply would be usedinteally In the facflities;and (c) the ratioof treatedwater to watersold is 0.8. Theresultant BERR was calculatedto be 23 percent. 6.9 Severa sensitivityanalyses were conducted on eachof the _ . These included: (a) a 10 percet cost increase;(b) a 10 percentcost increaseaccompanied by a 10 percet benefitdecrease; (c) two-year project delay; and (d)exclusion of the ind -value added*benefit for the watersupply component Theresutant ElRRsare shownas follows: -27 -

102 Cost Exclusion Cost Inereasee Two-Year of Industry Increase 102 Benefit Project Value-Added Component by 101 Decrease Delay Benefits

Water supply 10 9.51 10.51 1.5 Sewerae 211 18.01 22.02 -

E. AVORDAUY

6.10 Thepresent tariff acestll consideredlow for bothresidetia and industrialuse, beingless than I percentof avage monthlyfamily income for residences.bIcomes used for these calculationsrepresent only cash incomeand excludesubsidies in kind. The average householdincome is at presen aboutY 376 per month. Ihe averageconsumption of 410 lcd for a four-peon householdcosts Y 2.46. Includingsewerage, the averagecost would be Y 5.0, or 1.3percent of total income,still muchlower than the 5 percentconsidered affrdable for waterand sewerag servicestogether.

F. ENVRONMENTALTIWACr 6.11 An Enironme ImpactAs (EA) for the projectwas preparedby consltants and reviewedby Bank staff and.by ChangchunMunicipality. Cangch Muniipalt and NEPAapproved the repon, whilethe Bankconsidered the EIAto be accepable with only mnor improvementeomended on anMgementsfor Involunty restement resuting fromthe project(pm. 3.29). A finalETA incorporating the IDDA'srmmeda has ben prepared. A summaryof the E1Areport is providedin Annex1. 6.12 Theenvironm l impactof the proposedproject was evaluated with respect to eclogy, agiclue, and aesthetics. The restant impactshave been idetffied as thoe occurg primaly duringthe consuion and post-constuctionphases of the project,and are as hullows:

(a) the ecologicalimpacts identified concemed the floraand fauna along the pipelin route, pecificallythe YitongRiver and transfaation betweenthe Second Songhu Riverand the Shikoumen Reservoir.Vegetation along the pipeline route, which is damagedby constructionequipment, will be restored by replantnggrs and trees in the diurbed areas. On hillsideslopes low bem wM be consdtcted at reglar intervalsacross the right-of-wayto prevent excessiveerosion. Therewould be minimalimpact on anima life In the area; (b) the potenl for introducingalgae from the SecondSonghua River int the ShI en ReservoirIs consideredto be minimal. However, there is miniml potenti for the Intoductionof parsites, such as protoeans, flatwormsand roundwormsto the ShitoukomReservoir fishery,becase the Yin MaRier and the SecondSonghua River are connectedat the covfluenceof theservs some40 milesdown from the ShitoukoumenReservoir. Also,fish -28-

stocksin the Reservoirae not nativeand are, in fact, introducedfom stocking ponds locatedbelow the dam Therefore,the possibleImpact of parasitic introductionis expectedto be minor; (c) the withdrawalof waterfrom the SecondSonghua River at Majawil reducet amountof water availablein the River for dilutionand assimilationof raw sewage*om the City of Jilin 16km downstreamof the Majaintake. is anticipateddeterioration in localwater quity in the SecondSonghua River to the confluencewith the Yitong River would be addressedthrugh the introductionof improvedsewage treatment within the City of Jilin withinthe near future. Jilin Municipalityhas the responsibiltyto effectivelymanage its sewagedisposal so as not to dischargeraw sewageinto the river and to exceed the assimilativecapacity of the SecondSonghua River; (d) onlyminor agricultural impacts along the water smissionpipeline route and constructionsite locationof the treatmentand pumpingplant, are expectedto affect300 area farmers,who will be compensated(para. 3.29). Ihe posiive impacton Changchunbecause of increasedavailabilit of water supplyand sewagetreatment should far outweighthe negativeimpact on agricultmal productio..;and (e) the aestheticimpact is expectedto be minorbecause construction will take place mosdyin the rural countrysideand willbe localizedand tempormy. 6.13 lhe projectinvolves tributaries to the SonghuaRiver, which eventually flows intoan internationalwaterway. The Bank staff has madean asessmen thatthe ProJectwould not causeany appreciableharm to otherriparians. 6.14 Similarly,a draftTOR for a Haardous WastesManagement and IndustrialPark Study also has been prepared (Anne I1). Assuranceswere obtaied aOtchangdun Municpalty wUlengage consuitams and conpletethe study by December31, 1995 and Udll bthen eplanfor industrildrelocaton. This was iitiated to assistChangdn Municipaity to betterprepare itself to addressenvironmental issues associated with adisng and andcipat new industiesand their waste,many of whichmay be toxicand/or hazrdous matias. The studywould include analyses respecting the feasibilityof designainga partlr pordonof the park as an industrialeconomic zone. Workerhousng wouldbe excludedfrom this area with a plan developedfor relocationof the workerpopulation into a separatehousing development, free fromindustral pollution, but accessibleto the dustrialpar

G. PtojEcr RIMS

6.15 Projectrisks, not includinggeneral risks due to policyand economicreforms, are mostlyin the executionof the water pollutioncontrol worhm and regulatoryreform and enforcement. Over the last two yeas, the local authoritieshave developeda much better understandingof the consequencesof the presentdomestic and indusria pollutionin Changchun. Ihe strongcompetition for investmentfunds for directlyproductive puoes and the reformof industriesusing outdatedproduction tehnology may affectthe priority to be given by the Governmentto findingfollow-p pollutioncontrol enforcement and investment. Water resource shortagesaffect the living conditionsof almost everyonein the urban and mru areas of -29-

Changdhunand thereforealso the economyof Jii Province. As a resUt there a strong commkmentby the ProvincWand the Muniipal govrments to support propriat measures to iprove the siuation.

6.16 ReformsIn priciagare requiredto ensurethat the desiredbenefits are generated. As these changesaffect a wide range and numberof provincialand municipalgovernment agencies,difficulty in implementaon maybe expected.Finally, there is a risk thatdelays may occurin Implementationof the physicalworks of the projectbecause Changchun Municipality, CWSCand CSChave never taken up an investmentprogram of this scale in the past; thus the agreedemphasis on a strong PMO,backed up by eperiencedconsultants. -30-

7 AGREEMENTSREACHED AND RECOMMENDATION

7.1 Duringnegotiadions, assurances we obtand t: (a) ChangchunMunicipality wfll maintaina PMO wih staffing and f-a acceptableto IDA(para. 3.14); (b) ChangchunMunicipality will: Q) causethe PMOto submitquartedy progress repots to IDA; and (h) causeCWSC and CSC to submitan annualsummary report and semianual reports on main develop and cdgs In the corporateplans (para. 3.16); (c) ChangchunMunicipality, with the asstce of CWSCand CSC, will resetfle the personsaffected by the projectin a mannerand accordingto a schedule whichis satisfatoryto IDA (pas. 3.18 and 3.29); (d) Jilin Provinceand the ChangchunMunicipality will maintainand reulaly inspectthe Xnlichengand Shitukomen Resevoirsrespectively (pm. 4.2);

(e) CWSCwill adopt a neworganizatio-, and rpobiliesby December31, 1994 (para.4.6); M CWSCand CSC will contractconsultants by December31, 1993to assistin improvingthe managementand operationsof CWSCand CSC, on terms and conditionssatsfactory to IDA and cay out an agreedacion pla and timng satisfactoryto IDA(pa. 4.9); (g) Annualaudits of (a) projectaccunt, (b) the CWSCand the CSC acoounts, (c) the SpecialAccount, and (d)the Statmns of Expenditue (SOEs)wil be carriedout by auditorsaceptable to IDAand completedand sentto IDAwidn six monthsof the end of each fisca year. h formatsof the accout and audis also willbe subjectto IDA's reviewand agreemenLA sepat opinion will also be givenon the audit of the projectaccounts, Special Account and SOEs(para. 4.11);

(h) CWSCwil be responsiblefor watersupply and seweragebilling and colection to all wateruses (para.4.14);

O ChangchunMunicipality will cause CWSC and CSC to implement,by December 31, 1994,a programfor computrzed planning,billng and foecasig, and provideby December1 of each yearone copyof the forecsti projecti to -31 -

IDA, and wil implementby Deember 31, 1994,a In_m atio system,with monly nomaon an watr demand,revues and coot d everysix monhs providean updatedcopy of such projectionsto IDA (pas. 4.14 and 5.4);

(j) ChangehunMunicipality will, by December31, 1993,tansfer ownsip of an publicsewer asset ownedby Changchunto CSC(pma. 5.6);

(k) Cgchu MunicipaltYwl conf Its agreementto (i) graduallyend all =ommeraland domesticexemption from sewerage fees, and complely end the practiceby the timethe projectis completed;and (1) levy a chargeof Y 10 per squre meteron newconstruction (par 5.8); (I) ChaugchunMunicipalty will cause both CWSC and CSC,to genrat suffciet revenueto cover operationand maitnace cost, excludingihrest, plus depreciion or debt service,whichever is the higher. ChangchunMunicpaty will ensure a CWSCand CSCwill retai al profitsduring the couction and debtrepayment periods (pm. 5.9); and

(M) ChangchunMunicipality will eae consultantsto conducta sudy of toxicand hazrdous waste mavagementand indusi relocation,to be completedby December31, 1995 and thereafer will implementthe plan for industr relocadon(para 6.14).

7.2 The followingare condtions of effeaieness:

(a) receipt by I'DAof signed SubsidiaryLoan Agreemensbetween Changchn Mnicipality,and CWSCand CSC, satisfatoryto IDA(para. 3.13); (b) State Couni approv of the DevelopmentCredit Ageeum and the two ProJectAgreements (pm. 3.13); and (c) receiptby IDA of signedageements between CWSC and the Shi n (Changchun Mlunicipality)and Xinllcheng (Win Province) Rvoir Managementsregarding water a ailabillty,pricing and facilitiesmainten 6y'ra. 4.3). 7.3 On the basis of the aboveagreements and aunces, the proposedproject contes a suiable basisfor an IDA Creditof SDR86.6 million($120 milion equivale) to the People'sRepublk of China,on standardterms, with 35 yearsmaurity. -32- ANNEXI

EXISTINGWATER SUPLY AN SEWERAGE SYSTEM

Water Supply 1. The water supplyand distributionsystem of Changchunis managedby the ChangchunWater SupplyCompany (CWSC), and ownedby ChangchunMunicipality. Two conventonalwater treatment plants (WTP) supply water to the system(see IBRD Maps 24063 and 24064). WTP 1 was built in 1934under Japanese direction. Its raw watersource is the YitongRiver, downstream of XinlichengReservoir and upstreamof the city. Approximately 52 millionm31year is suppliedto WTP 1. WTP 1 has very basicsystems of chemicaldosing and controland a poor levelof automation.It has a generallysprawling layout and is highly inefficient.It Is unlikelythat WTP 1. couldbe upgradedto the levelof a moderntreatment plant. WTP2, witha productioncapacity of 250,000m 3/day,was built in the early 1980swith Japanesegrant aid. Raw waterfor WTP2 is abstractedfrom Shitoukoumen Reservoir on the ChaluRiver, approximately 40 km eastof Changchun.The quality of treatmentfrom this plant is generallygood. Anmualwithdrawal from the reservoirranges between 40 and 80 millionm 3. 2. The distributionsystem in ChangchunIs a tree-likebranched system instead of a preferredclosed-loop system. The systemconsists of two majortypes of main.:

(a) Feedermains (220 kn) of 300 mm to 1,000 mm diameter,which form the sketon of the distributionsystem. They are locatedalong the majorstreets and carrywater fromthe treatmentplants to the smallerdistribution mains; and,

3. Smallerdistron mainsless than300 mm diameterbranch from the feeder mainsand supplywater to the serviceconnections of the residencesand otherbuildings, and the fire hydrants. In the past, the usual pipe materialwas cast iron, with a smallportion of galvanizediron pipe. Recently,plastic pipes have been used in the constructionof newsystems or for the replacementof old mains. 4. Site inspectionsand pipe frictionmeasurements have shownthat muchof the older cast iron mainsare in very poor condition. The main reason has been identifiedas corrosioncaused by the distributionof aggressivewater and the inadequatecorrosion protection of castiron feedermains and distributionmains. Thisis a generalproblem in China. S. In 1990, 365,000domestic connections, serving 90 percent of the urban populationdirecdy, were recorded, of which60 percentwere metered. Apartmentbuildings have one meterand individualhouseholds in the buildingare not metered. Therewere about 6,000 commercialconnections, of which 40 percent were metered and 2,500 industrial connections,of which73 percentwere metered. -33 - ANNEX1

6. Distribution,zcring began in the ealy 1980s. Ihe present locally manufacturedvolumetric water meters are do no guaranteereliable long 4enr recordingand the numberof casesof defectivemeters requiring replacement is increasing.The reasonsfor the poor performanceare the poor quaity of the meters,which have a life expectancyof about5 years,and the highpardtle and chemicalprecipitation because of ditributionsystem corrosion. ImprovementsIn the domesticmetering is necessarybut can onlybe madegradually with the improvementof the watertreatment and newconstuction and maintenanceof the distribution system. 7. Becauseof the abovecircumstances, It is impossibleto determineexactly the unaccounted-forwater and the systemwater losses in Changchun.Leak detection activity is low due to the lack of advanceddetection equipment. Comparison with other citieshaving similar systemsand conditionssuggests that many leaks remain undetectedin Changchunand consequendysubstantial volumes of treatedwater are lost. A disincentiveto completemetering is that China's centralgovermnent has set guidelinesthat water lossesshould not be above 10 percentand in gradingthe performancenationally of the WaterSupply Companies the water lossdata figureprominently. 8. Mostvalves in the systemare operatedmamnly. Thereare no detailedrecords of valveoperations, repairs or maintenace;however, the sameobservations can be madeas for the distributionmetering. Site investigation has revealed that there are insufficientvalves in the systemto controland regulateflow. 9. A total of nine manuallyoperated pumping stations provide water to the distributionsystem. The dischare pressureis maintainedin the 5 to 6 kglcm1 range. There are no pressurerelief valves installed in anyof the pumpingstations to protectthe systemsfrom waterhammer, which may be causedby valveclosures. 10. All reservoirsare undergroundconcrete structures. The totalcapacity is about 66,000in 3, whichis about 12 percentof the maximumdaily water consumptionmeasured in 1989. ExistingMunicipal Wastewater Handling System

11. General. The WastewaterMaster Plan for Changchunpoints out significant problemswith the existingsewage collection system, including: (a) poor materialsand construction;(b) inadequate maintenance of the system(attributed in part to maintenance budgets);(c) poor constructionquality and inadequatecoordination of designand construction; (d) sewersunder buildings,resulting in maintenanceproblems; and (e) cross-connectionsof stormsewers to sanitarysewers. 12. ifiltration, coupledwith partiy or completelysilted up sewers,conlribute to backingup of the systemand flooding. Ihere are also majorsurface water drainage problems createdby uncontrolledconstrauction within the natura drainagecourses in the city. Thelimited flow emes madein November1990 suggest that flow velocitiesin somesewers may be insuffient to providescouring under normal flow conditions. -34. -

13. Sewage Collecdon system. mm city s divided into nine dria distrcts developed according to the topogrphy and natural dinage cnels. The sewer system Icludes bothcombined and separatesewers. Separatesewers carry both sanry and industW wastewa, ad run parallelto stowrmsw where hoseeist. In he olderditicts, combined sewersystems, cveying saitary, industia and m flows,are more common.

14. During the developmentof the sewer systemover time,the combinedor separate sewersin the variousdrainage areas were constructed to dicharge via te shortestrute into hie vaious natul streams,rvers, pondsor drainagecourses witi he ciy area. Becausethe sewagecollection system has many separate raw wstewar dischargopoints trougou the city, there are severeeviromental problemsin these waterbodies. 15. Sewerswere first installedextensively in the older areasof the city suchas the Erdaohezidistrict on the eastside duringthe 1930s.The existng sewer system consists of abou 324 km of combinedsewers, 243 kmof stormsewers and 212km of sntaysewers. All newer constuctionhas used separatesewers. 16. la 1988, ainterceptor sewerwas constucted in the bed of the main water Course,the Yhong River, from Yong Bridgeto Dongda Bridge (3.2 km of 1,800 and 2,200 mmdiameter concrete pipe). Accessmanholes protrude above the riverlevel. At present the interceptorends at a temporarylift stationjust downstreamof a rubberdam at the Dongda Bridge. Afterconstuction of the interceptor,the damwas constucted to createan impoundment in the river for recreationaluse. Ihe intentis to eend the itecptor firiher north to the proposedNorth Suburbs Sewage Treatment Plant Thefirst part of this extensionis nowunder constction. Theintceptor nowdischarges into the river thmughan openingupstream of the temporarylift station,which is to be removedupon completion of the intceptor system. Ihe temporry lift stationis activatedwhen the river water levelis too hgh to pemit gravy flow in the interceptor. 17. Accordingto theWastewater Master Plan, approximately 40 to 50 percen of the city is servicedby sewers. About60 to 70 percentof theseare in poor conditiondue to lack of repair. Many sewers are partiaUyblocked by silt and other residue. Ihe remaining unseweredparts of the cityare servedby privateor communaldry latrns. In 1987,there were stll 2,875dry latries in the city accordingto the UrbanConsrci Bureau. hese latrines are graduallybeing demolishedas newhousing, with sanitary sewer connecdons, replaces old rowhousing. 18. Stormwaterin mostparts of Changchunis usuallycombined with sanitary sewers except in the Southwest,Auto Plant and Rail West districtswhere stormwateris collected seaely. Thereare also openchannels within the city to covey strmwater dranage into creeksand riversduring the rainyseason. Stormsewers and combinedsewers do not finction properlyin the cityand floodingcommonly occurs durng rainyperiods. ConstuctionMeriasb 19. Sewer Pipe. Older systemsare largely plain concretestructures without reioforcingsteel. After 1950,reinforced concrete was used for pipe sizes of 300-2,200mm dimer and unrenfbrcedconcrete pipes for sewerssmaller than 300 mm diameter. Small diamete vitrifiedclay tile pipe wih bel and spigotpjotsis used for serviceconnections. Joints -3S - ANNElI are filledwith a cement/sn mortar. Poe aro castr pipowith bl and spigotjoin. Joint canbe eiher rubberor jute gasketwith cement mortar packing. 20. Alljoinls are testedaccodn to the ChineseNational Sandard, which requires a joint to withstd a 4.0 m statichead without leaking. Th intration for concretesewers is estmatedto be 40 m/km/dayat a pressue of lessta 4 m of groundwater(Wastwater Maste Plan). A higherstadard maybe neededin certainlocations such as the inteceptorinstalled in the Yitog Riverbed. 21. Manholes. The shallowmanholes on smalldiameter sewers are of ccular, brickconstructon, tpering towardsthe top. Themanholes in the olderareas east of the Yitong Rivershow sigps of penetratonby tre roots. On the largerdiameter sewers observed, east of the YhtongRiver, the manholes are of vatZ type, brick constuction to a depth of 1.S tD 1.8 m. The base is a square ooncreteslab on which the manholebarrel is constuced. Conetons for sewersor stormpipes are constuctedintegrally with the base slab. These connectionsappeared to be pofirlyconstucted instaled on an 'random' or 'as needed'basis, poorlyinstled andsubject to infltratton.In someof the newerareas precast concrete manholes are being used. On the interceptorsewer the manholesare made of 4 m diameterprecast concreteiins. 22. Sewer ntalaon Practics. Under the ChineseNational Stadad, pipe grdients are basedon a miniwmmvelocity of 0.7 m/sec. Forpipes less than 250 mmdiameter, gasdesare generalybetween 0.004 and 0.005m/sec (0.4 to 0.5 percent).The maximumsewer depthin normally4 to 5 m.

23. Wastewaterand Stormwater ift Stations. Lift stationsare used to transfer watewaterfrom points where sewers are toofar belowground, usualy 5 m. Theyalso prevent bawkpfrom sewers durng floodingperiods. Equipmentinstaled at liftstations includes coarse screensand pumpsbut no meteringdevices. Spare pumpsare provided,but there are no altene drivesfor use in the eventof powerfailure.

24. Existingsewers in the Erdaohezidistrict are too lowto permitgravity flow into the main interceptorat the YitongRiver. The water surfacein the impounmentupstream of the rubberdam is higherthan the wastewaterlevel in the sewer. TheFufeng Lift Station in the area does not handlethe stormwatereffectively during rainy seasonsand floodingof that area is reportedto be common. 25. Wastewater Treatment and Disposal. Ihere is currenty no municipal wastewatertreatment plant. In the late 1960s,a primar treatmentplant (EastSuburbs WWTIP) was built in the northeastpart of the city with the intentionof usingtreated effluentfor irrigation. In 1980, aions (bythe ChangchunAgriculture Department) were stoppedand the fact is in tota direpair.

26. Both domestic and process wastewaters from Auto Plant No. 1 and the ChangchunTractor Plant are beingtreated. Thewatwater treatmentplant at AutoPlant No. 1 wasbuilt in 1987and put intooperation in 1989. Theplant has a capacityof 25,000m/day and treat bothdomestic and processwtewaters in separateprocess trains. Thesecondary effluent qualit is reportedat 50 mg/LBODs. The totalplant flow includingprocess watewater is reportedtobe about10,000 m3/day, or about40 percentof plantdescapacity. Faces have -36 - AN 1 been providedfor tertrey a by chemicalclarification and filtrt at a capacityof 5,000miday. Thistertiary stream I use for llmiedrecycling and ruse In the coolingwate systemof the autoplat and park Irrigat. 27. MBn Budget. A rview of the municpalsewer maintance budget Indicats t oolyY 3 mIllionhave been aUocated for maintenanceeach year since 1987. Tis budgetinsufficien to copewih the rapiddevelopment of the city.

Exsting Industrial WasteHandlng Systm 28. General. Industi wawaterdischarged to munici sewagesystems and surfacewa is a major concern t thereuatory agencies In Changchun.The toxic cOnStitunfound in thesewaters have an adverseeffect on the receivingwater environment, partiularlythe Xi and YitongRivers, and pose a potenalhealth thrat to residens of the cityand to downstreamusers. 29. Major Idustries. There were more than 1,600 individualfactories in Changchunin 1990. The major industriesin Changehunare atmobile, machinery locomotives,trucks) and reiated equipmentmanufacture. These threeIndustia sectors constite moreOhan half of theindustrial output of the cityin termsof eoonomicretr The industimix in the cityin 1988 is shown in Table 1. There currentlyare no major oil refineries,gas plant, petrochemicalplants or pulpand paper millsin Changchun.

Tabb 1: INDUSriAL Mix IN CHANGCHUN(1988)

2 of Total

Machinery Is 55 Food 10 Chemical 8 Textile 6 Electrical 3 ConstructionMaterials 3 Metallurgy 1 Miscellaneous 15

hA Machirycategory includes automobile, truck, and related eipment manfactre. Source: ChinaNortheast Municipal Design Institute, 1988 data.

30. Changchun'sindtrial baseis spreadthroughout the city with no clearlydefined Industraareas. Thepower plant, coagas plant an foodindutries are located on the north side of the ciy,whffie the electronics and istrument fcties are locatedon the southside; txilemill and theAuto Pla No.1 are in the wesL However,machinery nd equipment factoresscatered throughout thecity and are not coninedto any one particularsector. Becauof ftis, it is notfaible to charactfizethewastewaer in a particularsector of thecity -37- ANNI! 1

basedon the preominanceof one industrytype. Basedon wa_war datafrom industry (1989 and 1990)collected from ChangehunEnvironmental Ptection Bureau(EPB) fRes, the total Idustrial dailywastewater discge was es ted to be appro y 120,000m&Iday, about 53 pecent of the totalwast_wat loadingfrom the city. 31. Severalfautories in Cbangchuncurrently appear to have adequatefacies to treat wastater. A smmary of the typesof wavwater treatmentused wihin the industries present in Changchunis shownin Table 2. Thereare some Installationsthat appearedto reqi furtherimpwovement, more frequentmonitoring, and improvementto the controlssystem. in generalexisting industi wastetreatment fcidites at severalfctories werefound to eitherbe nonprational or poorly operated. The manysmall facores, classifiedas millano, producea large quantityof wastewaterthat is preseny dischargedto the envionmentwithout anypretreaten.

Table 1.3: EXISTINGlNDUSTRIAL WASTEWATERTREATmE2 PItocr&ES

Industries Facilities Sludge disposal

Automobile Screen, oilskim. primary Incineration clarif., aeration, sec- Bric Manufacturing ond. clarifler, chlor. and filltr. Chemical Reactors, dewatering Incineratioz Coal Gas Phenols extraction, aera- Incineration tion Pharmaceutical Phenols extraction lacineration Paper Dissolved Air Flotation (OAF) Textile Screen, electrolysis, IncineratIon flotatlon, Enlsand filter Plating ion exchange, chemical Return to equipm. uppli- precipitation, electroly- r. Concentr. waste sent sis to waste treaoent center

Electronics Ion exchange, chemical Concentrated waste sent precipitation, neutral- 'to waste treatment center iSation Machinery/Equipm. Sedientation, DAF, fil- Incineration, Reproces- tration sing In lube plant

Food Aeration, sdimentation, oeraeAs cattle, fish filtration feed Power Sedimentation/filtration Brick manufacturing Miscellaneous Chemical Pracipitation Reuse In pigent manfac- (tannery, padnt) turing, Incineratioa

32. Accordingto e Changch EPB,the pdrma contaminanof concernin these industa watersare a ianitrogen, COD, formaldehydeand phenols. Ihe EPB considers that the heavy metals, oil and grea, and cyanideare bing contolled adequaWyand -38 - ANA1

concenratins are withinthe Nationalguidelines. Based on the 1989water quality data obtained fromthe EPB fDrthe Yitog River,this is not the case. 33. Aswae treant proces IncreaseIn umber and improvein efficiencyin thoe&te, mor wast sludgeswiU be produced. Currently,there is no coordinst program in pla to hanfdle,dispose or reus and redlaim _ sludges,although som effort is beingmade (see para. 36). 34. Praazt Dschage Lmits. Industal waswwatersfrom Changchunare dischged intoreceiving waters, by meansof surace dranagecanals or throughpipes to rivers. Auto Plant No. 1, for example,discges its wastewaterto the Xinkal River following treamen New, or expandedfacilities are governedby a more stringentset of wastewater diage stndards which reflect Nationalgovement (State) requirementsfor improved industal wasteteatment technology. 35. Status of Edsting Facilites. In spiteof the settingof these discharg limits, the majorityof industriesin Changchundo not have wasw er tret facilitiesalftough wastewaterat majorfcilities are trated to somedegee. In somefatories, teatment cilities ae present,but are not operating. Industial Waste SludgeDisposal 36. IndustrIalWaste. Sludgedisposal in Changchunis onlypracticed on a small sae at prese.L 'he majorityof industriesin the citydo not treattheir w _awrsfficienly to createsludges. Sludgerecovery is restrictedto operatis dealingwith heavy metals, power plantscrbber water,some oils, and someof the food industries.The sludgesbeing produced are parally used as a fuel source,along with coal, In boilerfines or in brkickkins. Other sludgesare removedfor use by farmersas fertilizeror are dewatered,and driedto formfilter cakes whichare eifter reused directlyor reprocessedto removevaluable materis, such as comium and otherheavy metals. Agricu reuse of sludgesis decreasig becauseof the suspicionthat thesematerials may be contamiatedwit heav metalsand phenols, which may becomeincorporated into the food crops. The quantityof industial sludgesgenated in Changhu is esdimatedat about9 tomes per day (3,285tomnes per year). Ihis figurewas derivedby asumingthat only 13 percentof the totalproduced industia wastewateris crety teated, and 0.05 percent of this actuallybecomes sludge. Sludgedisposa technologyin Changcn is in its infancy,primarily because of a lackof sfficient wastetreatment technoogy and faciities, and not becauseof a lack of willingnessto addressthe problem. Ihere is a wiingness to reycle as muchas possibleprovided the economicsare appropriate. As the mixedpatter of housingand industriesis the majorimedme to industia wastecollection andtreatment, during project preparation an industia zonewas creaed and a studyis included in the projectto examinein detailthe problemof industi wastetreatment (para. 6.10). Monltorim_and Contol 37. Or atio. TheEPBis the govermentregulaory body which oversees the protectio of the envwinmentfrom inuia sources. Ihere are three levelsof the EPB that ar responsiblefo renvironmeItalprotectio and dischargelimits-State, Provincialand Municipalorgntions. The Municipal,or Changeun EPB is responsiblefor monitoring Idsr dishar withinthe city. It has threeopaional unitsto deal withdisdcarges and -39- ANNEX

emissioksto water nd air, nd nois leves. TeoEPB requiresindur to monito discage rates and the concentationsof pollutats in the effluenta all exist faiities. t checksfor complianceby samplingonce or twiceper ye. If a particularindusr has a raed of violation of the dischargesanr, the EPB wfllincrease its levelof survaillanemonitoing. At all large factorlesan EPB officeis maitained on site. Themandate of ths site offlceis to superviseall mattersrelated to the environmentand pollutioncontrol.

38. It is reported in the ChangchunWastewater Master Plan (1990) that the impI on of end _entalrgets set by the EPB in the most recent Five-Yearplan (1985-90) has resulted in a sgnificaut reduction in disage volumes from industries as meared by prioritypollutant streogth. However,these reductionshave not resultedin a significantimprovement in receivingwater quaity basedon 1989field data. 39. As part of the Five-YearPlan currnty in effect,each industry was allocated a target for water reuse (up to 20 percent in the case of Auto Plant No. 1). During the developmentof waterdemand projections, it was seenthat these targetshave nt beenmet, or evenapproaced. In fiact,at somefactories reuse is restrictedto the recyclingof coolingwaters only. Curryty a programis beingconducted by the WaterConsvation Officeof Chagchn to promotethe isllation of coolingtowers in factoriesand to substituteair coolersfor cooling watersystems as measuresto reduceindustral water consumption in the future. 40. All new industriesand expansionsto existing industrWfacilities require participationof the ChangchunEPB in the design,construction and operationof in plat pollutionabatmnt tenologies includingwastewater treatment and sludge disposal. Thi policy,known as the 'hree SameTune Policy,' was Introducedin the ealy 1980sto eNsu at industrieswere complying with current environmental guidelines and discharge limits. The number Ibree' refers to the three levels of participationi.e., design, constructionand opeation. Theadvantages of thispolicy are obviousif carriedout, sinceit meansthat the EPB is involvedin all facets of the pollutioncontrol programsbuilt into all new or expanded facilities.However, expansions and newfacilities are oftengoverned by economicdemand, to the exclusionof environmentalprotection. Given the lowlevel of wastetreatmea in Changchun at presentit does not appearthat the policyhas beenfully implemented. 41. PealmtySystem. To facilitatethe implementationofpollution control objectives, a penaltysystem has been devisedby the ChangchunEPB to Aiscouragethe disposalof contaminat to the sewagesystem. The moneycollected from penalties is alocatedto a fnd designedto subsidizethe constructionof pollutionabatement facilities. Usualy a graceperiod is allowedto those industriescharged for noncomplianceto allow them to either correctthe situation,or to constuct or modifytheir wastetreatment facilities. The extentof the grace perioddepends on the exte of requiredmodifications. 42. Loanand Tax 1cnves. Currendy,the ChangehunEPB has avaiable a fund for the Implementationof pollutionabatement programs by industry. Thisfund is derivedfrom finescollected as a resut of Industryexceeding waste discharge limits. Eightypernt of the totalof collectedfines are rearned to this fund. Individualfactories can applyfor a losa from this.fund if predeterminedconditions are met. The loans, repayableover three years, are prioritizedon the basis that factorieshave: (a) a deadlinefor the implementtionof pollution controls; (b) operao that impact the environment of the nearby neighborhood;and (c) obaned up to 60 percn of the required funig from other sources. -40.- ANNE 2

WATERDEMAND AND SEWERAGEFORECASTS j

A. WATERDEMAND

1. Wherewater h abundant,the tem wter dmandand waterconsmpdon have oftenbeen used interchgeably sincespply is able to meetdemand. However,a dstinton mustbe madebetween the tems in instaces, such as Changchun,whee wateris limitedand the avaiablesupply is unableto meetthe demand.

Projeted Consumption 2. Water supply will constrai consumptiondtrough the period of the present projectand beyond. Consequentlythe trendof waterconsumption will be decidedprimarily by the avale treatmen car et of the eist and new water transmissionand treatment fcilities. The difference' tweendemand and the availablesupply will determinethe rate at whichconsumption reaches maxdmum available supply capacity. When supply and demand are of comparablemagnitude consumption wJll be slowto reac maximumsupply capacity, but when demandis much greter than supply,maxmum supply capaiy will be consumedrapidly. Consumptionmay then be predictedwith a fair degreeof accuracybased on the wateravailable underthe project.

Demand

3. Esimationand projectionof demandin areas experiencingwater shortage are complexts. Themajor difficulty arises from the lack of historicaldata on whichestimt maybe based. In water-richareas this problemis not so acutesince present consumption gives a solidindication of demandand manyNorth American municipalties model future demand on a direct mathematicalprojection of historicalcon Ion.Tbis approachis invid where consumptionis stronglyrestricted. 4. As an altenative, demandcan be comparedto other mnicipalities,at their presentor previousstates of development.A paralel projectionmay then be prepared. Of course,the conceptof parallelprojection wil be tenuousat best sinLceno two areas will be subjectto the same economicor physicalinfluences and will not likelyrespond in a similar manner.

11 Thefollowing analysis of waterand wastwater demands are a summaryof forecastsmade by UMAEngineerng, Ltd., of Calgary,Canada. -41- ANNEX2

5. Under these circumstances,demand estmates and projectionmust rely strongly on the judgment of the team making them, on the prevous experience available and on what appears reasonable. The experienceof local officials must also be strongly relied upon. This essentily describes the siaon in Changehunwhich has been water starved for most of its recent history. Estimatesand projectionswere therefore made on the basis of previous outside experiencewith considerationto the advice availablefrom local technicalstaff.

6. Projecteddemand holds more relevancethe closer it is to the base year, since the formulatingassumptions will be modifiedless. As projection moves farther into the future the defining conditionsmay change due to unpredictableinfluences and the accuracy of the forecast is less assured. For example,the prospect of supplylimitations may force the adoption of more water efficient industrialpractices. Also, as demand approachessaturation level the growth rate will diminish. At this stage, however, the influence of these factors cannot be predicted. For this reason constantgrowth rates have been used for the demand components.

7. In keeping with the classificationsystem under which the Changchun Water Companymaintains its records, demandwas estimatedfor residential, institutional,commercial and industrial categories. The individual estimateswere te totaled to give overall present demand.

8. Since 1989 was the last year for which completedata were available, in terms of production and consumptioncategorization, this was used as the base year for projection.

Distribution System Losses

9. Accurateanalysis of water leakagein older distributionsystems is often difficult. Infuences such as nonsealing valves, unmetered connections,and uncertinty as to the total numberof connectionsmay reduce the accuracyof loss surveys. Historicallythese factors have frustrated efforts to quantify losses from the Changchundistribution system. In an effort to estimatelosses internationalconsultants compared production and consumptionvolumes reported by the ChangchunWater Company.

10. The results of the comparison are provided in Table 1, which shows unaccounted-forwater data ranging from 3 percent to 12 percent. When the age and general state of repair of the distributionsystem componentsare taken into account, it is felt that this range of losses are unreasonablylow. In the United States, where resources for distribution systemmaintenance and constructionare more readiy availle, systemlosses for cities with in excess of one million populationaverage about 17 percent.2/ Even allowing for the relatively low system pressure and the impervioussoil found in Changchun,it is esdmatedthat losses in the Changchunsystem are in the order of 20 percent.

2/ The Water Encyclopedia,2nd. Ed. F. van der Leeden, F. Troise, D.K. Todd, Lewis PublishersInc. (1990). -42 - ANNBXZ

Table 1: WA1ZRPRODUCtON VERSUS CONsuNFO

Year Total Lose 6s Reported Unmccounted- Z of distrib- Water Intake In-Plant Consump- for water uted water ('000 u'Id) Use tlon ('000 tuld) unaccounted for

1981 236.59 222.39 216.00 6*39 2.9 1982 249.51 234.54 224.80 9.74 4.2 1983 254.02 238.78 226.90 11.88 S.0 1984 289.83 272.44 245.40 27.04 9.9 198S 314.88 295.99 261.80 34.19 11.6 1986 319.53 300.36 272.20 28.16 9.4 1987 329.23 309.48 28S.40 24.08 7.8 1988 373.35 350.95 331.70 19.25 5.5 1989 425.07 399.57 380.60 18.97 4.7 Average 7.6

Source: Changchun Water Company.

11. Figure I and Table2 showthe historicalvalues for wateruse in ChanghbmL

Residentl

12. Residentiaconsumtin, as reportedby he Changchu WaterCompany for the yeamn1981 to 1990, is likely to be ovrsted sie they are based on a systemloss of approxImatelyll perent If tue loss exceedthe estimatedvalue and if meterreadings are generaelycomcl thenthe lost volumeis includedin the allowancefor unmred consmtdo Sincethe biggestunmetered volume falLs in the rednal categorymost of the loss will be includedin this estimate. 13. Geneeallyresidenti consompdonhas ineased as soon s morewat became available. Thismay be seenbetween 1984 to 1990. Dung is periodtwo phases of Water Treamen Pan 2 (TIP 2) cameinto produci I addition, wih vinglevels of service, manyresidental uses of waterwhich had previously occured in the workplace(such as batg, cooking,etc.) beganto take placein the home. 14. Residental consumptionwas invesgated wihin vaious servicecategodries. Demandestmates were then made on the basisof howconsumption would most likely inctease withi the categories,if morewater were avallable. 15. Averageday residentialconsumption records for 1989,divided into service categories,are dso in Table 3. These figureswere providedby the ChangdmnWater Companyand are based on recordsof meteredconsumption. The percentageof consumers withi tee categoriesis shownin Table4. Thesefigures were also provided by the Cbangcn WaterCompany. ChangchunWater Supply HistoricalConsumpton 160 _…- 160 140 r -140 Legend e- 120- L __ ___-_ lsuionalnL_ 120- x -- 120 -4CmecaCommea./_dC t 1X 00 X 100 A Industa -SC -' ConstMx:ion

0~~~~~~~~~~~~8

§40 _31t_ -40_ 0 t20- <___ ; -20

1982 1984 1986 1988 1990 1981 1983 1985 1987 1989 Year Figure 1 HistoricalWater ConsumptionIn I Changchun(1981 - 1990) Table 2 Historical Average Day Consumption (x 1,000 m3 /d)

ResidentialTotal 28.8 28.7 28.3 29.4 61.3 7S.0 82.7 103.0 124.3 145.6 Metered 12.6 12.4 12.5 15.1 35.6 50.7 53.1 62.7 72.9 90.6 Unmetered 16.2 16.3 15.8 14.3 25.7 24.3 29.6 40.3 SI.4 5S.0 InstitutionalTotal 78.3 86.0 88.S 96.2 72.3 69.3 76.1 81.3 9.2 100.3 Metered 64.4 73.4 76.9 83.2 65.9 64.0 66.8 74.0 87.7 93.1 Unnetered 13.9 12.6 11.6 13.0 6.4 5.3 9.3 7.3 7.5 7.2 Connercial Toal 6.9 7.5 7.2 9.0 12.2 11.1 10.7 12.9 14.8 17.1 Metered 3.8 S. 1 6.0 7.5 9.0 8.8 8.4 9A 1O.5 13.1 Unmetered 3.1 2.4 1.2 1.5 3.2 2.3 2.3 3.5 4.3 4.0 Indusrial TotaI 100.2 100.9 101.8 109.7 114.7 116.S 113.2 126.6 136.S 140.7 Metered 84.6 89.4 91.8 98.8 10S.5 108.2 106.7 111.0 130.6 133.9 Unmetered 15.6 11.5 10.0 10.9 9.2 8.3 6.5 9.6 5.9 6.8 ConstructionTotal 1.8 1.7 1.1 1.1 2.3 0.3 2.7 7.9 9.8 12.2 Metered 0 0 0 0 0.5 0.2 0.2 0.9 0.7 0.2 Unmetered 1.8 1.7 1.1 1.1 1.8 0.1 2.5 7.0 9.1 11.9 TOTAL 216.0 224.8 226.9 245.4 262.8 272.2 285.4 331.7 380.6 41S.9 Population Served 1,079 1,123 1,154 1,189 1,252 1,409 1,415 1,502 1,551 1,586 (thousands) _ - ~ -wc - ~ - ~ ~ ~~n l5iELijaui wale -45- ANNEX2

Tabb 3: R WATERCOMUMPON BYSERVI CATEGORY(1989)

Average Day No. Service Category Consumption (Licd)

1. No water supply or sewer plumbing. Water from standpips 47 2. Water supply, no sewer plumbing 52 3. Water supply, sewer plumbing, no shower 78 4. Water supplys sewer plumbing, shover 119 5. Water supply, sewerplumbing, shover and central hot water supply 205

Source: CbangchunWater Company.

Table 4: YEARLYPERCENTAGE OF DWELING CATEGORY SERVED

1984 1985 1986 1987 1988 1989

service Factor (X of Dwellings served) 77 78 85 84 88 89 Dwellina Categorv. Z Breakdoun Water supply, no sewer plumbing 39 37 34 32 31 30 Water supply, sewer plumbing, no shover 18 18 18 18 16 15 Water supply, sewer plumbing, shover 33 35 35 36 38 40 Water supply, sewer plumbing, shower and central hot water supply 10 10 13 14 15 15

Total 100 100 100 100 iO 100

Source: Changcn WaterCompy.

16. If sufficientwater wereavailable to meetdemand, the per capitaconsumption wihinthe categoriesshown In Table3 wouldincease as determinedby the potentialfor water use withineach category. Sincewater supply will soonbe virtuallyuniversal within the city, Category1 is unlikelyto remainin exstence. WithinCategory 2 (watersupply, no sewer) -46- s

residen tendto be smallapartmet andwhile oumpion wodd be expectedto i e this wouldbe limitedby th physicalspace availablo waterug appliances,bahubs, etc. 17. For Cate 3 (watersupply, sewer) preset demandwi1 also eceed prest onsuon. Sincethe potentialfor wateruse i greater In this categoythe dispaity betwee cosumptn and demandwill be greater. 'he greaest d be n cumptin and demandis found in Cagory 4 (watersupply, sewer, show). Consption in wi these facilities is generaly limited only by supply; ther is eough spa avlable for water- using appliances. Within Category S (water supply, sewer, shower, centr bot water sfpply) most residences are In the vicinity of the Auto Plant andare In an areaof good wate preu and supply. For this categoryit is unlikely at demand will be much gr thansupply.

18. Based on ftis logic and on discusions with ofcs frm the North East Municipal Del: Institue and the ChangchumWaer Company, and drwing on wester experience,the prcentage differen beween prese consmption and preset demand,for each service category, was estmated as shown in Table 5.

Table 5: CATEGORYPER CAPiTADzMAq ESflATE

Ratio of estimated Demand estiate Service category demand to consumption (L/cld)

1. 0 0. 2. 1.15 60 3. 1.20 94 4. 1.25 149 5. 1*10 226

19. These per capita demand estim were multipliedby popuation percentages within each category, as supplied for 1989 (Table 4). For demand est_imon, complete popuaton service was assumed.

20. Residentialwatr consumptionhas icreased rapidly as more water became avaiable over the past six years. The expectedpoput increase (1.5 percent per annum) combined with improved accommodaton and a more widerad availabilityof water-using applianceswil increas the residen demand during this perid. The standardof livig afd on improvement are estimated to cause demand to inre at ately 4 percent per anim. The reidentia demand projectiom in Table 1 assume a 4 percen per capita increasecombined with a 1.5 percent populationincrease.

Institutional

21. Instittionalconsumption is not projectedto greay exceedpresfet consmption. Ihis ir basedon examinationof thegen trendof con on overthe lasttea years. Dudrg this periodconmption remainedrelatively coStant, even whengrater quantites of water becme availe throughsupply and teatment expansions. Sin lutltuna consmptionoften -47- AbM 2 coain a resdentialclemen origiat fromon-site living ac ation(apartm , etc.), whichis conected to a commonsuWly conneon, a lO prcent differeal betweenprese demand andcosmto wa estimated. 22. It is consideredlikely a exstng ident use of Institutionalwater will be curtailedin responseto the highertauf appliedto insonal conumption. in recogition of thesefaors the rate of institbuonaldemand icrease was estiated at 2 perce nstitona demandprojecdon is also shownin Table2. Jn1ustl 23. Industrialconsumption increased by approximely 50 percentto 141,000mnYd, between1981 and 1990. lbis was due to increasedindustrial producton and expansionover this period. Significant ompdon Icreases fbllowedthe expansionOf pla capacityat WTP2 althoug, as wouldbe epected, the timetaken by industryto respondto greaterwater availabiitywas longer hn that shownfor residentialincrease. 24. Of all the categoriesanalyzed the data availablefor this categoryis the mast rliable. Apoxim y 96 percen of industWconsumption is meteredand additionaldemand is basedon requests,recorded by the ChangchunWater Company, for morewater. In 1989the total averageday industri consumpdonwas 137,000m3Id. Additonal idendfiedindustria demandis sbownin Table6.

Table 6: ADDmOAL INDuMRA DEMAD iN CHNGCHN

Industry WaterVolume Requested (m31d)

Coal mine 10,000 CentralHeating and PowerPlant 60,000 No. 1 AutoPlant 40,000 No. 2 GasificationPlant 20,000 100 miseellaneous factories 36,000 Total 166.000

Source: ChangehunWater Company. 25. Changckunhas becomeone of themajor mufig centersof China, parculayfor the ao bile, truckand rail industies. Otherlighter industies have become firmlyestablished and are likly to expandoperation as more waterbecomes available. Even thoughwatr availabilitywill alwayslimit industril expansionwithin the city the established industibase is too strong tDmake drastcreduction in demandpossible, ather thanby inceaseduse efficiency.The ccrasultants esimated that industrialwaterdemand wil increase at approximaely4 percentper ann Inheretin this estimateis theassumption of more efficientwater use and rauseas industrymodenie. -48- EX2

CommercdaUConstruction 26. Bothcommercial and constructionconsumptions are smallrelative to the other componentsand have remained reasonably constant over the recordperiod. Bothare considered unlikelyto changewithin the nearfiture. 27. Commercialconsumption has remainedconstant over the last ten yearsand is not consideredlikely to increaseappreciably in the future. Sincethe volumeof waterconsumed withinthis categoryis smallthe demandand consumptionwill not havea noticeableimpact on supply. Therefore,demand and consumptionae consideredthe sanwe.A 1 percentannual increasewas consideredthe aimum whichwould occur. 28. Theabove is summarizedin Table7, WaterDemand Projection and in Figure2, Supplyand ProjectedConumption to 1999. Implicationsof ProjectedDemand (1991-2000) 29. Themost immediate implication of waterdemand as calculatedfor Changchun is that it will not be satisfiedby the implementationof the presentwater transmission project. 30. Becausethe cityhas beenundersupplied for so muchof its recenthistory, water demandnow greatlyexceeds supply, with the result that expansionof supplyto meet this demandcompletely, within the nearfuture, would be extremelycostly. 31. It is criticalthat the presentsupply scheme be completedas soon as possible since it will reducethe discrepancybetween supply and demandand will be the initialstep towardsreleasing the presentbounds placed on industry. lmplications of Projected Demand (2000-2020)

32. If demandcontinues to growat the presentrate it wil be almostimpossible to meetit. The presentdemand structure must therefore be changed. Thisrequires that existing and future industriesbe made -ore water efficient. By adoptingmore water conservative technology,industries wiUl be ableto maintainor increaseproduction while using less water, i.e., reducedemand. In addition,more recycle and evenreuse of watershould be promoted. B. WASTEWATERDEMNDS

33. Accordingto the WastewaterMaster Plan, approximately 40 to 50 percentof the cityis servicedby sewers. Theremaining parts of the citynot seweredare servedby communal dry latrines. 34. Althoughthere is a steadilyincreasing number of householdshaving shower and hot waterfacilities, there is a declinein the percentageof householdswith sewer connections. This may indicatethat the sewerageutility is not able to cope with the demandfor new connectionsas the populationincreases. Table 7 Water Demand Pmjection

I~~~~~~~ ~~~~~~~~~~~. _ w1:t t!n'l ,iS1t 'tt:SS'B1w POd ion (thound) 1__1 1_73 1,762 1,788 1.81S 13.82 1.870 .9 1,2 3I,95 3,198S 14 2,07S 7J06 Z138 2,370 2.0 237 2.556 2,754 Polslon Inrease(%) = .5 1.5 1.5 1. 1.s I 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1'5 1.5 3.5 1.5I-S| .5 15 AVERAGEDAY DEMAND I I I Resletial 3 I Demd (z 1,000m0Ad) 218 230 243 256 273 286 302 318 336 355 374 395 417 441 465 49 S18 679 890 ,167 resential demandgroth rte (%) 4.0 4D0 4.0 4.0 4A 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4A 4.0 4.0 4.0 4. 4.0 40 histiiona 3 Demand(z 1,000mn id) I=S 107 109 ll 114 33 118 121 123 125 128 131 133 136 139 141 144 IS9 176 194 insluta growthrate (%) - 20 2 .0 2 .0 2.0 2 .0 2.0 2 .0 2.0 2 .0 0 2.0 2.0 2.0 2 2.0 2.0 2 .0 2 21 CAmme 3 Demaud(x 1,OOm /d) i5 15 is IS 16 16 16 16 16 16 17 17 17 17 17 37 18 38 19 20 _omer deaudc po4h raate(%) 3.0 3.0 3.0 I* 1.0 3.0 1.0 3.0 3.0 l1.0 I1.0 3.0 1 .0 1 .0 - .0 1.0- I*A * IoNdaasustemaud 3 ( .OOom d) 303 315 328 341 354 369 383 399 415 431 449 466 4as 50S 525 546 568 650 840 2 industriW owth rate (%) 4.0 4.0 4D 4. 4n 4.0 4. 4. 0 4 .0 4*4 4.0 4.0 4* 4D 4D 4* 4D 4.0 4*

- ======- MisceUaneous (una0 160 16tedor)67 174 181 189 197 205 213 223 232 242 252 263 274 286 29 312 387 481 60i % msseflanceasdemand 20 2020 2 20 20 20 20 2 0 2 0 20 20 20 20 20 2 0 20 20

WrllIn-plant demand (6%) _ S 535 58 60 63 68 71 74 77 8t 8 88 93 9 5 00 123 154 192

WTALAVUMIM4 - -.. 3 WAT!M _ _ _ __U_

Note Matimumd to a dveragedaydemratio is sued to be .1 for establsing future madmumday demandrates. his antiowas daebFd fom bsal WSWrOnmPln rcordt ChangchunWater Supply Supplyand Total Consumption to 1999 900 - __ _. _ -900Legend

800-__Is- Supply 700-2 W g _-- 700 Consumption x, 600W_/_0

E 4- _ - 4-00 300------

200 - ---- 200

o 0 19911992 1993 1994 1995 199. 19971998_1999 Year FIure 2 Supplyand Projected Consumpdonto 1999 l , ~~~~~~~~~~~~~I 35. k 1987,ther oweroe y-S750,00pecpe, abouthalfhpoplatlomin te city eved by dry atrie accodn to th Urban graully being demlished, nw constuction vplaces old row housing.

36. Stomwate inmt pas of ChangchunI usually combid wit sanitarysews except in te Souhwest, Auto Pla ad Rai West disticts whr sormwtr I coletd sepa ly. T are lo openchamels within he ciy to cne ormwatedroag int crks dnriver duringthe rainy sao 37. Bothdomestic and process wastewas fm AutoPlmt No. 1 andChangchun TactorPlat arebeig reated.Th domescwatwae fow at theauto pla ad thetracw plantare approximately 4,000 r/Iday each.

38. Waswaerda fomIndusy for t 1989and 1990perodwercoected fom haungchunEPB files. Basedon thisdata, tie totalindustria daRy wastewater discre w estimatedtbe aIproity 120,000m'/day. This is Amaely 53 perc of ieto wastewaterloadig fromthe city.

39. Mm qantiy of ndustril sdges generated.in Chgcu is a mated at about 9 tn perday (3,285 to peryear). hi fi wasdered by asming thatly 13 petren of the totl produced dusal wastewateris curraldy treated, ad 0.05 perce of tis acY becom sudge vaiusprocsuse by industytohndlethese amounofl dudge ae outlinedbelow by industrysector.

40. As part of the Five-Year Pan cuntly in effct, each iutry was also allocaeda urgetfor war reuso(up to 20 perc in thecase of AutoPla No. 1). As shown by UMAin te deveopmetof watr demandprojeon, hes rges bav notboee met, or even adp ed. In fact,at some ce, reuseis rescted to therecyling of col wtes only. Curreny a programis beingconduced by theWar Conerson Offlo of aagdm to promoteie iallin of coolig toweasin ficdes andto stitt air coolersfor cooling watersysm as measuresto reduceindustri watercomptin in th fietre. -52- NNEXB3

DESRIIPION OF COMPONENTS

go. Ceonst_ La sction Dsptacty I use ltlom * MVVAllU

I ntebe suld Till City on taha etrestue and gzeStf d 0.475 Wl|d To abettat no Water Stea CCOWUSFISM 0t te . 0.97513 t 4 ee tap etat t eteo of bee",cs.tanout epeed). a" meter 1omen teeat r a taemebe"nu S tmenl A reinforoed 4conrete stsuctuwe. 0.473S tIE Dostft ug tag to inlat of

61wt_11- a bead. custoot _tonsr tpad rtth surg protectionMand oo S keuths PS hsee). A # iOrCedaconcete Strctre. 0.95 * tiE Uooetin wt? to Chan Itwer * t fS e1 each11 0.4) o tiat 40m bead. ioitant see5 with aurse protection etnd v aw 4 eatanfoe b~~~~~~~~~~~~~i. fi g nt*0et tgete}r a. ton preseure Vale=nteb t sage" concrete 1w pres- .12.lUt tuIf Cov= 4tr o VJ* t ,t ae nth P ure conduit bsonekt mS nlta tb.9S V tIe) b. T l t aS.1 0.26 tot * t/4 e ter I ienebenablteb easbaVsi 40 c, St la V to a . 1. I- Uslelas U. (L~t.er.s 1 (0.9 tI ello) 0. Pipeline a Pf*auo n ti UPree0t d Da S?."be1.44 S Cney w teQWron asuibs Pe ChaIn4Xlle. 1 Liver eteel p10.a0t/d conrete M- 1.. 2.4 la te a tile io seolected by tendegeg) sod 1* In acee. oad.

£ X_its~ I$ 2 dent- bitting Psaa to be 0.246 V tId S .o od to moiteritn et by 1dee t at SOM eab 0. ~T. etact *on

wt " (it lot (v) 1.

2 Zinwhiobe MN IolibNgO. Reinfored conrte trotugtu, 0.2*3 s ~~~~~~~~~~eac 0.8 3, t *1., tIE ro.tk weer aoDfrom foShi 14X^teubma*atglh

a'Ie.du!, SOn * constrnt 7 eaedlVIP t WaVteriens- Ch_Angh Cityl Preeme pipeline, ustar ate 01.100 16.6 be0 ZAitgliobe to .*51 vd*141 94o1F sWteel ditil lOni Of Pne- 94100.6.14 be3Is It eomtged concretedb teelacted (tIn-- pielines)so

4 NDenU.*11 chag_. City =tenpdoen e tetsnZtriujoi. eah03E 0.000X tId S tranfrwtr to. 7Uo*WP ~ ngbanCit Conanluorned treatent plnt 0.21 Mtld To taupltrae wato 1iglerto" mte ""d.consnt a beet.mmtg 3 i. ewob wmpprotect Umedatoduel aTC&Uo- watw chmeam no =nptreatment and chRlaome.aetoP.II ausim oloool 6.tio0 -S3- &WIL

U..~~ ~ ia CaoSyIIi. .~.m 1a .. _a.pta Ilo. C40pm=t Lot. C.Dt

8200. 1.0e v"

DMO 5.0 t a 500. 1:.Is 825-75. n5 o 9 Zbangau 18 Chasuba Ci_ty 4 ta*rifgal pow. _b 0.2 sWe. 0.-00 a tId lontiallybee.ttq to we". d 60 ahead with euqe pmntetio M r ole,au. and 11a _to c I T una ste:- ohnton City tagnad nomt pipe and DM 10 in To collast weeeand _ dawe *ePMe 6omw culvez 81006 1.25 In to aba= gej atmna DUaGo.I.44 in an abagMboth 1 -i 82100 1.52 la an the Iia Uves. .20D", 1.0 Xt X S.4x2.b. S.7? In 2 V"atete: S-at. Chanlun city teatm plant MSid nat etop of odew eni _It eat,,ien$* A N l Mm;) facility poua at 110406 Sities yaai 8~~~ 0,

Coinniati.n ill. and Kiarowa, osttia1 e.&I - ~ Co *aS. cI.gM3 ten-l an SC" Chagbou i_ te d e

2 Pm: Supply Jun and SatJiinSa and paWe lbne a. a _asebta. To Sepy pin to sat at Cbhoaug-o City h. tiass 4opOnas

145.4 km 3 QuArtet. and Alto and 31.50 up Offia Ch _gbaCity 4 N -ecellema Jun and te 1 - el" tog ," r y etw m Pipe *'"un an e lp aa

qatpos~Ient azias - cabIad eqimnapatlin CHINA CHANGCHUNWATER SUPPLY AND ENVIRONMENTAL PROJECT Poct ImpmIo Schedule

TMN 0001' *NAU* * S ASO* MAUiS ASOSO * IHAOS S MAMI# AS0301 *M -SAMIIASOA NAMISASOMB __ , * *4 am. * Una * aM* tS

in.Waaain 30 a~~~~so .A ...... its * s~~~~_ ~ ae *.--- * * . . * ~~~ u------c - a-* * .ptbI MS 3U * *.*-|**--* aC..t...aa..a...... a.a.OcM

* .* . afl * *..a.a.aa...... sou A . . . . .a...... * -- - **. * *..a.C..A......

* aa.~Te.S 3n Su** *. 8aS Ca-- ...... O--.. *

* uJ. so. o..a.a.....u..* ..--. *..-*-...,*0*--oM .* as *o* . . a *.61 . * .a._...... a...... CO" Is WOT,§"Voa3 __ , * ------NoPA*.a * .96 ...... O . . .

_||_;|_SX ~* a a a a * in SU* * . . . . a __ f|S, * * * . * .gca* * w ' S *I* * .a-...A...... C.a.0C.-""^*-^C^*------. *l * SW._1- ,^e,._ MS aa . *.-*.a.a..*...... * .*.. *.--.. .C** . .. . a. * avaab * * - a* a . ..a S @* . * , oS _t m01 * *aa ...... aS . $ *e as MS Md..S. . .A..E c ...... a.*.O co n*_ _ a1b 33 Sa"* a.-.- -.Sa---.-.-.a -- oo..a.... *-.aa. .... COU

~uaWI~** . . *a 0~~ ~ ~~a* ~~~. . _,~ pm sa . .eU *aA .a ...... Sa.. S.a CM . t>@ *1 * *-***..tS Aaa *-C*---.-a------aoC* ** _ _ * * *aaaaA.aMa a..-...a..aC*fl------o . " ~~~-WW t"~~* a * ||.*-¢a ^ -*-*ao * . a ingt - * - -- . - -g . az - a _-<_, lll.t ~* * . . . .

if3 .tga .C..eaa.aa.aaasa.O a . aaa.* *a.esa0..Oaa.taa..O $-Wae*4*

S-a ScIIEUI or CONmtAcrPAcUCAGU Qse Cost)

CoOltect Prcurement Toe cost

t 1 I (a UwaiUi:CB 16.0 2.; 4.0 0.7 2000 3.? 2 n~~q4.cXIc 31.2 5.7 1254.8 22.8 156.0 285 4 le lig44unnel 1.9 52.9 9.7

5 GIVUWoM ~ ~ ~ ~ ~ ~ ~ XIc 20.9 3.8 5.3 1.0 4.8 6 )Civil mied usI 20.9 26.2 7 (cPie SR9 5.3 1.0 26.2 4.0 * C 7.1 1.3 28.0 5.1 35.1 6.4 (414 cI 7.1 1.3 28.0 S.1 55.1 6.4

S~~~t,m &,,ft Stain

9 mik 10todu W 6.7 1.6 2.1 0.4 10.6 2.0 XIc 6.8 1.6 35.2 6.4 44.0 8.0 la1a GIkJiII1i XIc 31.3 5.7 7.6 1.4 39.1 7.1 12 lbiPipe XCI 11.1 2.0 44.5 8.1 55.6 10.1 13 WaterTreatmuit Plant. XIc 45.5 8.3 45.5 8.3 91.0 16.6 ~~LjI~~~~gazm

14 (a)L XC 34.0 6.2 6.9 1.3 40.9 7.5 15 (b) tCS 3.6 0.7 16 ViiPu,n Station 14.4 2.6 IS.0 3.3 17 LCn 1.0 0.2 4.2 0.8 5.2 0.9 vo tonspumpng tation XCI 0.6 0.1 2.2 0.4 2.8 0.5 18lat&pipn station XCI 34.7 6.3 23.0 4.2 57.7 10.5 19 a t a t tIc 57.7 10.5 57.7 10.5 152.4 21.1 t0 Ve:.w.A 24.3 4.5 36.4 6.7 21 i CI 60.7 11.1 22 t Icac 0.0 0.0 25.2 4.6 25.2 4.6 23 LCB 15.0 2.7 3.8 0.6 16.6 3.5 a equipment*Ic& vehicle 0.0 0.0 10.4 to9 10.6 1.0 Total oStrut LC. 8T 1.6 2.1 VIA 2.0 U. PaOwr CostTAUBI

Coutract £991 1994 £093~5 ~~ ~~~~~~~~~1"9 199 ~~~~~~~tal uao: ~~~~~~~~~~~~~Localtlo. otlLocal for, Total Local foe. Fol.a Local Iog TotaIlLoal for. TtaM Local lor! Vo. Lcl o. oa

1la)a UntA* S lmsia Statics. 1uamobmana "lotin Statics. Daeedba "USn Stattics I (a) Civil work 0.0 0.0 0.0 0.0 2.0 10.0 3.1 1.3 6.4 2.9 0.? 3.6 0.0 0.0 0.0 0.0 0.0 0.0 £4.0 4.0 20.0 I (b) t.ip.at 0.0 0.0 0.0 11.3 S6.1 101.6 9.1 50.? 44. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 31.112. 114.0u

2 Zen C1ohot 0.0 0.0 0.0 9.8 2.S 12.1 6.8 1.6 1.9 35S 0.0 4.4 0.0 0.0 0.0 0.0 0.0 0.0 £9.6 3.0 24.6

4 Laoaliag IM1ail £2.? 3.2 £3.9 £0.2 2.5 12.7 10.2 2.5 11.7 9.3 2.3 11.6 0.0 0.0 0.0 0.0 0.0 0.0 42.4 10.5 53.9

54.p*.l o Oal S (a) Civil Vwork 3.1 0.8 3.9 6.3 1.6 ?.0 6.3 1.6 7.9 4.2 1.0 5.2 1.0 0.3 1.S 0.0 0.0 0.0 20. 5.3 26.2 4 (8) civil 10:1. 3.1 0.6 3.9 6.3 1.6 ?.9 6.3 1.6 7. 4.2 1.0 5.2 1.0 0.3 1.3 0.0 0.0 0.0 20.9 5.4 26.2 7 (a) lip 1.1 4.2 53. .1. 10.6 13.1 2.1 9.0 £1.2 £.1 4.2 3.3 0.0 0.0 0.0 0.0 0.0 0.0 7.1 28.0 15.2 * (dl Ps" 1.1 4.2 3.S 2.7 £0.6 13.8 1.2 9.0 £1.2 1.1 4.2 5.3 0.0 0.0 0.0 0.0 0.0 0.0 7.1 28.0 15.1 PM"o Suppy 0.0 0.0 0.0 7.0 10.5 17.5 3.6 6.4 14.0 1.4 2.1 3.3 0.0 0.0 0.0 0.0 0.0 0.0 24.0 22.0 15.0 CommlcotionaISVAM 0.0 0.0 0.0 0.0 5.3 5.S 0.0 3.2 3.2 0.0 1.6 1.6 0.0 0.1 0.5 0.0 0.0 0.0 0.0 10.6 10.6 Woailoqlofice 0.4 0.1 0.5 0.9 0.2 1.1 0.4 0.t 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.7 0.4 2.1 vioacllomoou lqo4.oot 4 V.24.3. 0.0 0.3 0.3 0.0 0.4 0.6 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 1.1 Land Acquisiltos £6.6 0.0 £6.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 £6.6 0.0 I6.6 Total lamo Coat 5.1I 15.6 51.7 73. 134.1 209.5 54.1 77.2 151.3 21.7 10.0 45.7 2.0 1.1 3.1 0.0 0.0 0.0 197.5 244.0 441.3 lkyaicl Coat£ngoacy (152£ 3.? 2.0 7.7 11.J 20.1 31.4 $.I1£1.6 19.7 4.2 2.7 6.9 0.) 0.2 0.3 0.0 0.0 0.0 29.6 M6. "6. Total 3ameCoat * Pyiclt Contingency 43.6 15.6 59.4 66.? 154.2 240.0 62.4 MS. 151.1 31.0 20.7 52.6 2.3 1.3 3.6 0.0 0.0 0.0 221.1 200. 507.7 Poc0uresut Cool 1t .1 3... Coata 0.4 0.2 0.6 0.9 1.3 3.4 0.6 0.9 1.5 0.1 0.1 0.5 0.0 0.0 0.0 0.0 0.0 0.0 2.2 2.0 5.0 Wri ct.ooigoacy 3.6 0.4 4.3 10.4 7.1 17.7 9.6 5.9 15.5 6.0 1.5 7.8 0.5 0.3 0. 60.0 0.0 0.0 30.4 £3.6 4460

Total coat - Valor Tras"1iaaic 0t4. 16. 14.1 394 1163.03134 lid 95 165.1 58. It.1 6-0.9 3tej Li !a 94- 9.1 0.0 259.7fl4 M3.?

Itat** "upngstai Sbtcaobu.moalumping Static. lqlnc lumping Station. Ziaglisbeng lutako) 9 (a) Civil Mingl 1.3 0.3 1.6 2.6 0.6 1.2 1.5 0.9 4.4 1.3 0.1 1.6 0.0 0.0 0.0 0.0 0.0 0.0 0.7 2.1 10.8 10 (b) Sysipmat 1.S 5.3 6.6 5.3 21.1 26.4 0.0 1.8 4.4 1.1 5.3 6.6 0.0 0.0 0.0 0.0 0.0 0.0 0.8 13.2 44.0

c*ty suppl main I£I a) civil locke 0.0 0.0 0.0 14.1 3.3 17.6 14.1 3.3 17.6 3. 0.6 3.9 0.0 0.0 0.0 0.0 0.0 0.0 31.3 7.8 20.1 I2 (8) lip 1.7 6.7 0.4 4.4 17.8 22.2 2.9 15.6 19.3 1.1 4.4 5.5 0.0 0.0 0.0 0.0 0.0 0.0 11.1 44.5 33.6

£3 later Treaatw lUst 3 9.1 9.1 10.2 15.9 13.0 31.0 15.9 13.9 31.8 4.6 4.6 9.3 0.0 0.0 0.0 0.0 0.0 0.0 43.3 45.5 81.0

King main 6 Olotr£lstio. Iaproveostot (lipelina. Ml? I lming status,. Diotribstios $rate. luspn Statical 14 (a) Civil laok 3.4 0.7 4.1 6.6 1.4 8.2 10.2 2.1 12.3 6.6 1.4 3.2 5.1 1.0 6.1 1.? 0.3 2.0 34.0 6.9 40.9 is (b) Zquip.amt 0.7 2.9 3.6 1.1 4.3 3.4 1.1 4.2 3.4 0.7 1.9 3.6 0.0 0.0 0.0 0.0 0.0 0.0 3.6 14.4 10. i6 VIP I Pumpingstaticn 0.1 0.4 0.5 0.4 1.7 2.1 0.4 1.7 2.1 0.1 0.4 0.3 0.0 0.0 0.0 0.0 0.0 0.0 2.0 4.2 3.2 17 blatuibutics ?mpig Static. 0.1 0.2 0.3 0.2 0.9 1.1 0.2 0.9 1.1 0.1 0.2 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.6 3.3 2.8 oner Supit 0.0 0.0 0.0 4.7 7.0 11.7 .1. 2.6 9.1 0.9 1.4 2.1 0.0 0.0 0.0 0.0 0.0 0.0 9.S 14. 22.3 Ooinnicgatiosa 0.0 0.0 0.0 0.0 6.0 6.0 0.0 3.6 3.6 0.0 1.8 1.8 0.0 0.6 0.6 0.0 0.0 0.0 0.0 22.0 12.0 Dozaitoqyl0liice 2.5 0.6 3.1 3.6 1.4 7.0 2.4 0.6 3. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.3 2.6 13.1I Wiecellanmacu tquLpmam & V.13*100 0.0 1.6 1.6 0.0 1.6 5.8 0.9 0.9 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.1 6.5 Contract 199 1994 995 MO9 1997 l99 Total tawbar Local for. =totl Local fee. Total Local for. Total Local for. Tot;al Local for. total Local for. Totel Local for. Total

Lead Aoqutalttoo 22.0 0.0 22.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 22.8 0.0 22.6 Total so"e Coat 43.0 27.6 70.6 61.1 85.4 146.S 56.3 59.I 315.4 20.0 23.5 43.5 54t 1.6 6.7 1.7 0.3 2.0 187.2 197.7 364.9 "Y~etcal Coattagoeay (151) 6.5 4.2 W0.7 9.2 12.0 22.0 8.4 8.9 17.3 3.0 3.5 6.5 0.8 0.2 1.0 0.3 0.0 0.J 26.2 26.6 57.6 Total $sa. Coat + PSyoialc Coatlugeac? 49.5 5 11.5 70.3 98.2 168.5 64.7 68.0 132.7 23.0 27.0 50.0 5.9 1.0 7.7 2.0 0.3 2.3 215.4 227.3 442.7 ft.cagaaaat Coat It of Usaa Coat. 0.5 0.8 0.7 1.0 1.7 0.8 0.7 1.3 0.3 0.3 0.5 0.1 0.0 0.1 0.0 0.6 0.0 2.1 2.3 4.4 Utica Coutlagancy 4.3 . 5.2 6.5 4.6 13.1 10.0 4.5 W4. 4.3 2.3 6.7 1.3 0.2 1.5 0.5 0.0 0.5 28.8 12.6 41.5

To-tal Cost - Urban Watw LSUPoly 54.3 07.5 79.5 103.S 183.3 75..3 73.2 148.5 ILL.. 29. 57.U2 L _3 2.0 34I 2j S 3.0- MA6. 242.2 448.6

Togtal Water 102.3 49. 131. 177.5 266.8 444.3 147 9 M66U 316.7 65.8 52.3 ANI16.14 125 . 0. L 33$". 541.2 . 2

17 loterc.ptoz $e,er 0.0 0.0 0.0 10.4 6.9 17.3 10. 6.0 17.3 10.4 6.9 1.3 3. 1. 5.6 0.0 0.0 0.0 54.1 23.0 57.7

I6 Vetwaft"a Treatmeet Plant 0.0 0.0 0.0 17.3 17.3 34.6 17.3 17.3 34.6 I 17.3873 4.6 5.6 5.8 81.6 0.0 0.0 0.0 57.7 57.7 115A toast SuP9l 0.0 0.0 0.0 0.5 0.7 1.2 0.4 0.6 1.0 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 1.0 8.4 2.4 COMIMUL*otIOa1863*4 0.0 0.0 0.0 0.0 1.3 1.3 0.0 0.6 0.0 0.0 0.4 0.4 0.0 0.1 0.1 0.0 0.0 0.0 0.0 2.6 2.6 somit"1to~02191 0.7 0.2 0.0 1.3 0.4 1.9 0.6 0.2 0.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 0.0 3.6 stacalleameae lpQeaat & VebLclee 0.0 0.6 0.8 0.0 1.9 1.0 0.0 0.5 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.8 3.2 LeW ad£qaslttoa 14.7 0.0 14.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 24.7 0.0 84.7 Total Bse" Coat 15.4 1.0 86.4 29.? 20.5 58.2 28.7 38.3 55.0 27.8 24.7 52.5 9.2 6.2 17.5 0.0 0.0 0.0 120.9 6".I 19"A Pbyleatl CoutIegeec1 (151) 2.3 0.2 2.5 4.5 C.3 6.6 4.S .9 8.2 4.2 3.7 7.9 1.4 1.2 2.6 0.0 0.0 0.0 16.7 13. 28.0 Total so"e Coat + Vbyataal OCatlaeac 17.7 1.2 16.9 24.2 32.6 67.0 33.0 30.2 63.2 32.0 28.4 60.4 30.7 0.4 20.1 0.0 0.0 0.0 127.4 102.0 229.6 Proermauot coat 11.8t Ieee Costs 0.2 6.0 0.2 0.3 0.3 0.6 0.3 0.3 0.6 0.3 0.3 0.6 0.1 0.8 0.3 0.0 0.6 0.0 2.2 2.0 2.2 PC"*c ootlageacp 1.3 0.0 1.6 4.1 1.5 5.7 5.1 2.0 7.1 6.0 2.5 6. 2.3 1.0 3.3 0.0 0.0 0.0 09. 7.2 26.1 Lot*l Veastaater 1Z..319.4 3 fl. 34.6 73. _34 325l.4 0i ML ZLSt2 iL bLJ* L tL 0.0 LL 147.9 1L0.1 !L Teoateleeateceand Tralasu Detaile powip"4CMOOtmuctl saa9twtioBm 8.2 5.5 15.7 8.2 5.5 13. 4.1 1.1 6.8 4.1 1.7 6.8 1.4 0.9 1.5 1.4 0.9 1.3 17.4 19.1 43.A Vits6clal Uaosega.aoLeeleteae 0.0 0.1 0.1 0.0 0.2 0.1 0.0 0.1 0.2 0.0 0.8 0.1 0.0 0.1 0.2 40.0 0.0 0.0 0.0 07 0.7 VWi..Ioa11tsi0peret. Sufpot to 0601000 0.0 0.0 0.0 0.1 1.5 1.6 0.1 1.3 1.4 0.1 1.3 1.4 0.0 0.8 0.0 0.0 0.3 0.2 0.3 5.2 5.5 Toatalea"rd. West a luadut. tarkt Ottd 0.0 0.0 0.0 0.3 1.9 2.2 0.3 1.9 2.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 3.0 4.4 Training 0.1 0.3 ' .4 0.1 0.5 0.6 0.1 0.6 0.7 0.1 0.5 0.6 0.1 0.5 0.6 0.0 0.0 0.0 0.5 2.4 2.9 Total ftee Coat 8J 5.9 14.2 8.7 9.6 18.3 4.6 4.7 11.3 4.3 4.6 6.0 1.5 2.3 3.9 1.4 1.2 2.6 28.0 W0. 59.1 Ibyaloal Ccaciageac (802) 0.8 0.6 1.4 0.9 1.40 1.9 0.5 0.7 1.2 0.4 0.5 0.9 0.2 0.2 0.6 0.3 0.3 0.2 2.9 3.1 6.0 Total Base Cost . ibjelca Cootiagaopq 9.1 6.5 15.4 9.6 10.6 20.2 5.1 7.4 12.5 4.7 5.1 .6. 1.7 2.5 4.2 3.5 1.3 2.6 31.7 33.4 65.8 Pro"cresant Coa t 13of 3ae Coat 0.1 0.1 0.2 0.1 0.1 0.2 0.1 0.1 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.3 0.4 0.7 Price Courluepacy 0.8 0.2 1.0 1.2 0.5 1.7 0.6 0.5 1.3 0.9 0.4 1.3 0.4 0.3 0.6 0.4 0.2 0.5 4.5 2.1 6.4 Totatl Tacbaicel &aatataael Tretaiat 1MAL 44 16.8 10.9 11.2 22_.1 6. 8.0 J14 bi5 L 6 11.2 LI 3, ~j. jUj a.3j SS. 133 Total Coat 131.8 57.4 1892 227.0 312.6 539.6 192.3 209.4 401.6 1097 69.1 98.6 25InaJ 3 1 4.34 3 1 O"36902687.1 1-277.4 PuoonaCOST TAhUB

.30., Local POt, t~~~~~~otalLocal for. Voaal Lole" .toa L..l ot total UK"l t,toa Loca"l low.T tal ocl .Toa

I Ca) ciii Woika 0.0 0.0 0.0 b.5 *.4 81.0 0.0 0.2 1.2 0.5 0.1 0.? 0.0 0.0 0.0 0.0 0.0 0.0 2.9 0.? 5.? I Sb) RSpiusa 0.0 0.0 0.0 5.3 IS)1 84 1. 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 S-? 22.0 20.5

5Smus Iwoit 0.0 0.0 0.0 1.0 0.5 2.5 1.5 0.A 1.0 0,0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.4 0.0 0.5

4 1.aop.lit TWO"l 2.8 0.4 2.0 1.9 @5S 2. 1.J 0.5 2.2 1.1 0.4 2.1 0.0 0.0 0.0 0.0 0.0 0.0 7.? 8.0 0.

Ppeihe to 60.1*. S (a Civilw NatO 0.4 0.2 0.1 1.2 0.3 1.4 1.2 0.5 1.4 0.8 0.2 1.0 0. 0.1 0.2 0.0 0.0 0.0 54 2.0 4.0 0 (0) CIVil Ustk 0.4 0.5 017 1.2 0.5 1.4 1. 0.2 1.4 0.0 0.2 1.0 0.2 0.1 0.2 0.0 0.0 0.0 8. 1.0 4.0 I (el fpi" 0.2 0.0 1.0 0.5 8.0 2.4 0.4 1.0 2.0 0.2 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 5.1 4.0 * Sd) ftp. 0.2 0.0 1.0 0.5 1.9 2.4 0.4 1.4 3.0 0.2 0.6 1.0 0.0 0.0 0.0 0.0 0.0 0.0 1.5 5.1 .4. Pow. suppI 0.0 0.0 0.0 1.3 1.9 5.2 1.0 1.5 2.4 0)3 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 2.0 8.A 4.4 CUMAieatio.aIntOM 0.0 0.0 0.0 0.0 8.0 2.0 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.1 0.2 0.0 0.0 0.0 0.0 2.5 1.9 00031017150i0 0.1 0.0 0.1 0.2 0.0 0.1 0.1 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2 0.4 Hiscalluo"s Spip.mt 0 *ae 0.0 0.1 0.2 0.0 0.1 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 Land AepIaitcs 5.0 0.0 5.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 0.0 3.0 Ttotalso" Coat 7.0 24S 0.5 85.0 20.5 30.2 9. 14.2 24.0 2.8 8.5 0.4 0,4 0. 0.4 0.0 0.0 0.0 3.0 40.S 00. "rqol"eai Costipo 1852) 1.0 0.4 1.4 2.1 S.? S.? 1,5 2.1 3.6 0.6 0.5 2.5 0.1 0.0 0.1 0.0 0.0 0.0 5.0 4.1 2U.2 Total Sea" coot 9 """a Ccmttlawi 0.0 2.0 10.0 1I.0 20.1 44.0 11.4 14.2 21.4 5.0 38. 9.6 0.4 0. 0.4 0.0 0.0 0.0 41.0 51. 02.A fteacrommot coot Is of soa" costs 0.1 0.0 0.1 0,2 0J40.0 0.1 0.2 0.5 0.8 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.5 0.0 fig Coo.. isg.aov 0.? 0.1 0.0 1.0 1.5 9.2 1.0 1.8 2.0 2.8 0.2 1.4 0.1 0.0 0.1 0.0 0.0 004 5.4 2.0 0.4 Total Cost- at ?taamteel IA IA Md IL! ELa HA I ILHALZ I . RA 9 A 2 g9 %4 DAIA-

late" P tatin . ilo.g11. * to) CVil Voeda 0.2 0.1 0.5 0. 0.A 0.A 0.4 0.2 0.0 0.2 0.1 0.5 0.0 0.0 0.0 0.0 0.0 0.0 1.4 0.4 2.0 10 (b) S"pipset 0.2 ,1.0 1.4 1.0 1.0 0.0 0.2 0.0 0.0 0.2 8.0 1.2 0.0 0.0 0.0 0.0 0.0 0.0 3.0 94. 0.0

swLE us la gia)05huo 0.0 0.0 0.0 2.4 0.4 5.2 2.4 0.4 5.2 0.4 0.2 0.1 0.0 0.0 0.0 0.0 0.0 0.0 5.1 1.0 1.1 12 Sb) ftp 0.5 1.8 2.S 0.0 1.5 0.1 0.7 2.0 5.4 0.2 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0 2.0 0.1 10.2

Is WategTreece"m lnt" 8 1.7 1.1 5.2 2.0 2.9 5.0 2. 2.0 5. 0.0 0.0 1.4 0.0 0.0 0.0 0.0 0.0 0.0 CS5 0.8 1U. Ri%g31 OklaAt,ibuti.s tuptoammota Spiolin.a VW?I lumpin Stacs,o Dl.tab" stlc.Spte Psping Sttics) 10 (a) Civi lodk. 0.0 0.1 0.0 1.2 0. 1.2. I.0 0.0 2.2 1.2 0.8 1.5 0.0 0.2 1.1 0.2 0.1 0.4 4.2 1.5 1.5 i5 Sb) squiaset 0.2 0.5 0.? 0.2 0.0 1.0 0.2 0.0 1.0 0.8 0.5 0.? 0.0 0.0 0.0 0.0 0.0 0.0 0.2 2.4 8.8 14 Mi? I Patin station 0.0 0.1 0.1 0.1 0.5 0.4 0.1 0. 0.4 0.0 0.1 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.0 11 Oiatgul2sm 1oing Stogie 0.0 0.0 0.1 0.0 0.2 0.3 0.0 0.2 0.8 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 0.5 Powot WoppI 0.0 0.0 0.0 0.0 1.5 2.1 0.1 1.0 1.1 0.2 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 2. 0.S Comicssltow 0.0 0.0 0.0 0.0 1.1 1.1 0.0 0.? 0.1 0.0 0.8 0.8 0.0 0.1 0.1 0.0 0.0 0.0 0.0 2.2 2. OormitoxygOtelca 0.5 0.1 0.6 1.0 0.5 1.5 0.0 0.1 0.4 0.0 0.0 0.0 0.0 0.0 0.40 0.0 0.0 0.0 1.0 0.5 2.4 Wlacliios. U"p8.s S 1.0.0)0. 0.0 0.5 0.5 0.0 0.? 0.) 0.0 0.2 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0. 2.3 1.2 aUd 4ciito.2 0.0 4.2 0.0 0.0 0.0 0. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.0 4.2I C~~~vaot 1992 104 1002 iOU ~~~~~~~~~~~~~~~~~~p00 Jf1 ~~~~og~~~~~~~Local tow, tot"l Local for! foM alocal Iow Tatal Lowa VoT toMa o.aI for. Ttoed Local t.V Su"O Low* low. toAl

Total Be" "oa 1.9 S.1IM1. 11.1 15.4 2417 10. 10.0 21.0 2.1 4.2 6.0 0.9 02S 1.2 0.5 0.1 0.9 U.S2 36.1 10.2 29qaLal comt2voq~o (aM 12. 0.0 a.0 1.1 2.2 4.0 1.2 1.4 2.2 0.6 0.e 1.2 *.J O.o 02 0.2 0.0 *.1 S.2 S., ao.s total Be" Cost * ftbps1ol conetIogo 9. S.0 14.9 12.0 11.9 30.2 H 11. 2.4 24.2 9.2 4.9 0.2 2.1 0.2 2.4 0.4 0.1 0.4 29.3 42.5 00.0 hoog*WOOesCOs" Ax Of Sea Cost 0.1 0.1 *.1 0.1 0.2 0.2 0.1 0.1 0.2 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.0 iti ca oSSinoSoO 0.0 0.2 1.0 1.2 0.9 2.4 1.0 0.0 2.1 0.0 0.9 2.2 0.2 0.0 0.8 0.1 0.0 0.1 .3 52. 1.6

talCo"t * LAose Vat*c $waell 1*1 W4 ALA Atl MAAL E A I A MAI h LAIJ UAl AA gs LZ 9*1 *4 *4 IL lIt 3.

""o1K IIaBL IA ILZMAAU ILIAli H HAELIELILIL AU1LI A LiId34*4Li Ad ILilti

IsewospcGamew11 0.0 0.0 0.0 1. 1.3 S.2 I.9 1.2 2.2 I.J 1.2 2.2 0.6 0.4 1.1 0.0 0.0 0.0 4.2 4.2 ao.5 is Vestantof tosatao oleat 0.0 0.0 0.0 3. 2 .2 4.2 8.2 .2 4.J 2.2 2.2 5.2 1.1 1.2 2.1 0.0 0.0 0.0 10. W0.2 22.1 ownson"991 0.0 0GA 0.0 0.1 0.1 0.5 04 0.1 0.2 0.0 0.0 0.0 0.0 0. 0.0 0.0 0.0 0.0 0.2 .2 O.A CmOoWtoooll*SM 0.0 0.0 0.0 0.0 0.2 0.& 0.40 0.2 0.2 0.0 0.2 0.1 0.0 0. 0.0 0.0 0. 0.0 0.0 0.2 0.2 oo.ttoqiOUla 0.1 0.0 0.2 0.) 0.1 0.2 0.1 0.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.2 0.1 Uaaolaooomo 5wiosm A Vabolao 0.0 0.2 0.2 0.0 0.4 0.4 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 . 0.A IriLoad gaitto 2.1 0.0 2.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2?1 0.0 2.1 itotalsee, Coat 2.0 0.2 2.0 2.9 .2 10.6 S.2 9.0 20.1 2.1 9.2 * .42.2 1.S 2.2 0.0 0.0 0.0 29.2 162 264S Pitloalt Costtagsss (12*) 0.4 0.0 0.2 0.0 0.0 1.4 0.0 0.? 2.2 0.0 0.1 1.2 0.9 0.2 0.2 0.0 0. 0.0 2.1 2.4 $.S Total Saso Coot # lbpatal C.otagsoqy 2.2 0.S2 .5 4.2 4.0 1234 4.0 2.2 8. 2.9 2.2 11.0 2.0 1.1 .? 0.0 0.0 0. 22. 10.1 42.0 hoOOUgaog Coot 12 Of Bas" Cmest 0.0 0.0 0.0 0.1 0.1 0.2 0.1 0.2 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0. 0.2 0.4 firta costtags0 0.2 0.0 0.2 0.0 0.) 1.0 0.0 0.4 1.2 1.1 0.2 1.4 0.4 0.2 0.4 0.0 0.0 0.0 2.2 2.2 4.0 !MeaLWon at LA Rd Id LI HA33 LIWI A LIA Ul A! Id LI bl Ad Id W aI ML ALU toaolAdaiaaao "ad 4wo4l Motanla ON lAIcossme"W Suowvslam 8.5 1.0 2.2 1.5 1.0 8.2 0.0 0.2 1.2 0.0 0.: 1.2 0.2 0.2 0.4 0.2 0.2 0.9 2.0 2.3 0.2 fiSoasejl Usasomoa £sltaote 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 I'1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.1 ftttIl,t*tIpcVtt. so99Owt to Oci@ac 0.0 0.0 0.0 0.0 0.2 0.2 0.0 0.2 0.2 6.. W.2 0.2 0.0 0.2 0.2 0.0 0.2 0.1 0.2 1.0 2.0 I Tto.sIAkegd. Vtoot IIstudt. isAk 6tut 0.0 0.0 0.0 0.1 0.9 0.490.1 0.4 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.0 Twatalag 0.0 0.1 0.2 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.1 0.1 0.0 0.0 0.0 0.2 0.4 0.2 to"ta so" Cost 2.2 1.2 2.4 1.4 1.0 8.3 0.0 1.2 2.1 0.0 0.0 1.6 0.2 0.4 0.1 0.2 0.2 0.2 2.2 2.2 10.0 1bftoal Cootlr.osao (102) 0.2 0.1 0.2 0.2 0.2 0.4 0.1 0.2 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.2 1.1 total tao" Cot + lhjaloal Oitopaebp 2.1 1.1 2.0 1.0 2.0 2.1 0.0 2.2 2.2 0.0 0.9 1.0 0.2 0.9 0.1 0.5 0. 0.5 S.9 6.0 11. lgetooagss Cost Is GI sao" Cos% 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.2 0.1 0.1 PCs"ca otitosaoo 0.2 ',0.0 0.2 0.2 0.1 0.5 0.2 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.1 0.0 0.4 1.2

Total Tacheleal£OalataaootnaiaiaIaI 34I 14 LA3id I44 II L-Id3 At! LI Li LI L- id! LI LI Li AA A total Cost W13AL! 31A ILA Ut!n Ad.313. iLl III Al W ALI *1* Li Ull 2.13LAlt I A LIt 31A -60- AN A6

ESTIMATEDCREDIT DISBURSEMENTSCHEDULEJ

IDA Disbursement Disbur_emeat Fiscal (S million) profile (2) Year Semester Ending Semester Cumulative China Project

1993 June 30, 1993 la 7.2 7.2 0 6

1994 December 31, 1993 10.0 17.2 7 12 June 30, 1994 12.0 29.2 16 24

1995 December 31, 1994 12.0 41.2 31 34 June 30, 1995 20.0 61.2 48 51

1996 December 31, 1995 20.0 81.2 61 68 June 30, 1996 10.0 91.2 69 76

1997 December 31, 1996 8.0 98.2 76 83 June 30, 1997 7.0 105.2 83 88

1998 December 31, 1997 6.0 111.2 89 93 June 30, 1998 5.0 116.2 94 97

1999 December 31, 1998 3.8 120.0 100 100

/a bnludesthe initialdisbursement of $7.0 millionfor the Spea Acoun -61- ANNEX7

SuSION

Bank Supervsionlaput lTe staffinput Indicated in the tablebelow is in additionto regulr supervision at he for poureme review, correspondence,and review of exports which is estmated at 15 staff-weeksduring the first to third projectyears and about 10 staff-weeks hereafter.

Approx. Staff- dates Activity SkllM needs weeks

Apr 93 * Expedite start-up * Water Supply & Sewerage 6 * Reiew1 tender documents Specialist cGive project implementation * Fi4ancial/lastitutional vorkshop Specialist 0 Procurement Specialist

Oct 93 * Review project implementation * Water Supply & Sewerage 6 and procurement specialist * Revlew progresa in recruitment * Utility Management Specialist of managemet TA C Financlal Analyst Review= finanecil accounts Water Supply Compan - Revlew commercial operation Water Supply Company * Recruiltment of consultants for River Basin Study

Bar 94 * Revie project implementation * Water Supply and Sewerage 6 and procurement Specialist * Utility Management Specialist * Financial Analyst

Oct 94 Supervision misslon * Water Supply and Sewerage 4 Specialist * Utility Managemnt Specialist * financial Analyst

Mar 95 Supervision missiou * Water Supply and Sewerage 4 Specialiat * Utilty Management Specialist * Financial Analyst

Oct 95 SuperviIon mission * Water Supply and Sewerage 4 Specialist * Utility Management specialist * Fiancial Anslyst -62- ANNEX7

8taff- datesi Activity Skil neoeds veks

Nor 96 Supervioul misi * Water supply 8_d s.vems 4 Speciait * UttlUty if_imt Specalist * Finanial Analyst

Oct 96 Sup8evision mssion 0 Water supply and swerage 4 Specialst * Utilty n t Speciaist *F Analyst ar 97 SupervisionUmion * Water Supply and SeWra 4 Specialit * Utility linag_ment Specialt * Fin1acia Analyst

Oct 97 Servsiou missin 0 Water Suppy ad Seweraee 4 peci1lst 5 Utlity managemt Specialist F Analyst 98 Last supetvision mssin and PCR * Water supply ad Sewera 4 mission Specialist * Utty ' Fiacal Analyst -63 - ANN

PROPOSEDWATER SUPPLY AND SEWERAGE ORGANIZATIONS

A. CHANGCHUWAMR SUPPLYCOWANY

Organiatn 1. The proposedrevised organizaion of the ChangdhunWater Supply Company (CWSC)as agreedduring appraisa of this projectin May 1992is shownin Figure 1. TMe organiztionconsists of six departments,three of which form part of the OperationsDivision. In addion the Gene Maag of CWSChas a Planmingsee reportingdirectly to himL 2. is w oa structeprovides for stengenigof CWSCin several areas: (a) All operatal responsblities as well as coordinan for dt water tnsmision and supplybIne wors, pumpingsta, treatmnetplans, and watersupply to the distibutionsystemis underone administratveand operating

(b) The Companyhas is own planninggroup to carry out long range strategic planningfor water supply,water rate adjusments,special studies and internal

(c) Therewi be jint bfllig of waterand sewerchges. A computerd billing systemwi be instled. (d) Personnelmanagement and employeetraining is consolidated. (e) Designcapability for minorworks for watermain replacement and etensios, pumping stationsand related apurtenace is enhanced.

(f) Recordkeeping is improved. (g) Constuctionsevi capabilitiesto enableCWSC to respondto pnori issues are improved.

(h) The operatin of the water source works,the distributionsystem and water productiondepame wM al report to the managerof the Opetion Division. Ihis wil provideCWSC with more flexibilty and controlover key componentswhich wil enablethe Companyto be more responsiveto system demand. -64 - A=

3. The CWSCManager should involve his Depatmet Heads in the decision- makingprocess. Thiscan be achievedthrough the formationof an executivecommittee which wouldundertake reviews of currentopations and mak reco ons relativeto annual budgetpreparations, new projects,utility rates and othermatters requiring a seniormanagement decision. 4. The followingprinciples should be adoptedby CWSC and approvedby ChangchunMunicipality for implementaion: (a) CWSCshould operate on a full cost recoverybasis with revenuesgenerated throughwater rates. (b) Costsshould be paidby usersin proportionto the servicethey receive and their abilityto pay. (c) User fees shouldaddress both operationalcosts and debt retirementof capital expenditures. (d) Watermetering should be universaland the companyshould work towards the implementationof this strategy.Water metering is essenialto fair costsharing and to waterconservation. (e) CWSCshould have the authorityto makethe operationalday-to-day decisions wihin the approvedbudget and stafflevels during the fiscalyear. (t) Operatorand employeetrainig and developmentshould be givenhigh priority and the Companyshould encourage and facilitate exchanges at the intrnational level. Responsibilties

5. Theresponsibilities of the restructuredCWSC have increased and are described brieflyin the followingtext.

6. PlanningService. The objectiveof the PlanningService is to providedirect supportservices for the GeneralManager. Jt includesLong-Range Planning, Legal Services, InternalAudits, Special Studies and Reportsas well as PeriodicReports, Public Relations and inter GovernmentalAffairs. Long-RangePlamning includes: preparation and updatingof the Water SupplyMaster Plan with the concept planningand preliminarystudies for major projects,coordination of inputsto the masterplan with companies and government agencies, and the approvalof all projectsfor compliancewith the WaterSupply Master Plan. LegalService includes: provisionfor in-houselegal advice on matters concerningthe operationand managementof the CWSC. Intenal Audts includes:making financialand operationalaudits and assistfngthe outsideindependent auditor. SpecialStjles andReports includes: carrying out studiesand preparingreports for whichthere is no experdseor capacityin the operating departments,at the requet of the seniormanagemen For example,long-range planning for rate increasesin advanceof futurecapital expenditure, to minimzethe impacton waterusers, examinewater rates with the purposeof recommendingtariff actionby CWSCto maintain economic viability, economicand cost/benefitstudies, financial analyses and reports, - 6S5- ANNEXB organAzationalstudies, response to vaious governent queries, initves and activities, providingthe MunicipalGovermnet andother levels of governmentthe necessaryinfonation and reports and, last but not least, public reladons (press, general reporting to the public, etc.). 7. Corpmte SevIces Department. Ihe objectiveof CorporateServices should be to provide the workingtoos (staf, equipment,offices, etc.) for the companyto be able to achievethe purposeof the Company.It Is a supportservice for the opeating departnentsand the managemen of CWSC. Corporate ServicesDepartment incldes: FTnndal and Commcal Servies (registryof customeraccouns, meter reading, billing and revenue collectionfor bothwater and wastewaterservice, gerl accountingand financial reportng for all cost centers,capitalassets accountingand depreciationrates by types of assets, anmnua operatingand capitalbudgets, monthly budget performance reports); Personnel Mnagament (maintainpersonal files, recruitment,posiion descriptions,salary admn n, address housingneeds and beft of Companyemployees, employee relations, worker safety; raiing (staff development,preparation of mamns and procedures,etc.); Matias Mwaagensn (managesupplies stores); Central Epume SerWces(purchase and supervisemobile and heavy equipmentfor operatng departmentsas tractors,backhoes, loaders, other heavyspecalized equipment,trucks and autos); and Ionnadon Systms (planfor computizationand supplyand providema _ntensupport for computerequipment). S. EgeI Department. The dutiesof the EngineeringDepartment would include: preparationof constructionplans and budgets for capitalprojects; approval of project documentationof other agencies;issuance and updatingof water proJect standardsand specifications;supervision of capitalprojects for compliancewith specificationsand costs; provisionof assistanceto otherbranches of CWSCin solving problems of an engineeringnature; maintenanceof engineeringrecords; computerizationof CWSC records into GIS format; mainenanceand analysisof database for systemoperation for use in longrange planing and operationrequiements. 9. Capital ConstructionDeprtment. 1Tneduties of the CapitalConstruction Depatent wouldinclude: ProjectManagement (cost esimaing, materias requitoning/ procurement,project scheduling, cost accounting); Constnucon Cews (constructionof projects; supplyof manpowerand materials,safety program and public relations); Equipme Operaion (ease heavyequipment/trucks from CorporateServices; and, SmallEquipment Mainennce (repairand supplysmall equipment and worktools to crews).

10. SourceWater Department. The SourceWater Department is responsiblefor the source works (Songhua,Shitoukoumen and Xinlichengsupply systems) including water intakes,pumping stations, transmission mains and appurtenances.It is plannedto contractthe O&Mfor the Maya-Shioukoumenworks to the WaterResources Company. 11. Water ProductionDepartment. TheWater Production Department would be responsiblefor the water atmentplans andwells, clear water pumping stations and reservoirs. Taskswould include facility operation and mantenance (process standards, water quality control, operationallogs). 12. Distribution System Departmet. Duties of the Distrbution System Departmentwould include: opetion of a 24-houremergency response and dispatchoffice (handleemergency calls, maintain emergency crews); customer complaint desk; water metering -66- ANNE:

(supply,in and servloewater met, calite eters); ep_met opation (lea of tucs). Ditrct ofice wouldbude: routinei_ o£ , vaves and stops leakdetecton and repairs; installtlon of nowservice connections; preventve mitnne records mainteance, and nmpe program for relcenit andlor rbabiltaton of deterioratedwae mains.

13. Staffingof the restructuredCWSC to memtthe objectivesand challengesfor managemntad opeaaon of dte wat utity mut be a piority for ChOgun Muidpalty. Selectionof the ms capablepesonel fom witi CWSCto heodup eac of the d ep and the opeatg diision i th firstep that mustbe take.. Thena compleeappra of the dministati, technicaland labor orientedstaff must be made to fill posii based on qualcaions requiredfor the position Cuetly CWSCemploys 2,400 p ent and 700 tmporary employees.On the basisof discussionsheld with CWSC peaonnel, it wouldappe that, basedon consultants'asessments in 1990-91,some of the staffare not requiredbecau of the requmnt to hire unemloye relatves. he estmaed staff requeme to address proiect pImpi o b 1,370an the basisof Iratonal Stat hing policies. Th totalstaff comlemntrequiredi sum b as follows:

Ltem Peranent Staff Temporary Staff Total

CurrentOperation 2,400 700 3,100 StageI ImplementationProgram DistributionSystem 100 - 100 TreatmentPlants 0oo - 800 Supplyand Transmission 470 - 470 TotalCurrent Plus Stage 1 3,770 700 4,470 Staff Requirements

14. No increasein temporaystaff is projectedas it willtake a few yearsfor the re- srucred orgaizaton to get properyoriented and assess staff capabilities in relatiomto positon qualifications.

B. ClANGCUUNSZWELAGE CONMANY 15. Ihe objectveof the ChangchunSwerag Company(CSC) is to collect,treat and dispo of all santy sewag in Cangchun, and to olect and divrt I-nsrhe Changchundraiage basi awayfom developedars, thmspreventg flood damagLeThe abo sould be acomplis by meetingthe sta uatr X by Environmtl Pmrot Bureauand the policis of the MunicipalOvanmenL Th financ policiesshoud alow dte Companyto raise fmds hough usr fe andraes to coveral current and captal expeses and to apply adeque toall its assets. -67--itmz8

16. Us amgchm Sew Compa (CSC)is bein acea andis paned oraizatio I providedtn FIgure2. 7his orAWn wil eventuallyconsist out of sevm tee of whichform part of te, WwarO peratioDiviso. The orgniztin andstffig ar oy indicativeand wil ole withtm 17. ThoformAtn of CSCis a majorstrengthening of the watwat utiliyim of meetingrequhapb vforuility management,decsio makin opeton and maintenance of th wastewatersystm Othe are of stengein are as foLw: all operatg d q wil reportto oneDivision Read who rqor to thoCSC Manager District offices cootdi1stotheir opwation od maintenanceactvities through the DivisionHead; see _udateamcrews shodd be devotedfUlly to thechecking and reng of sewea facW in eir disticts;agred flusdhigand bucket rodding schodues should be followedto as prper pefomane of sewers;and eachdisict shouldbe epped with video nseto eqipme to examinetOh state of repairof the sewerlines in order to determinerepair priories. is. CSCwill haveits ownPlanning Service to undertak specialstudes andto updaelong range strategicplanning. CSC mWllnow geerate rvenue ch will be colected by CWSC thoug a omprie joi blng proess on a Peejfr swe bas. The ngineeDritg wil beable to carryoutdesis of minorwork. Drawingrecordswill be updatedby this goup on a reuar basis(not done curny). CSCwill haveIts own Cpliance Moniorig Diviionto cary out mnitorn of industrialefflues dischagedto sews andreceving stream to ass compliancewith the sewer use by-law. 19. As in CWSC,the Mana of CSCmust invlve his DepatunentHeads In the decision-makiproce. is can be achievedthrough the fmation of an executive management_committeecomprised of theD epa nt Hexdswhich would meet monthly or on som ohnergula basisto discussbudget prpaton, systemopeaons view,swerage tarifti,industrial waste management, enronmental protecion measures, new projects and ote majorissues concerning the managemen and opaion of CSC.

20. Plannng Serice. Theobjectiie of the Planing Sei i to providedirect supportsevices to theGener Manager.It willinclude Long Range Planning, Legal Sevies, Intern Audks.Specia Studies and R qs andPublic Relations and In ve en Affrs. Lon-RangeP g incudesthe planming and coordination of the andupdating of theWaswater andStomwater Master Plams as wellas concepul plans and prdiminay studies for majorprojects. Legal Serws providesfor m4iouselegal advice on mattersconcening th operton andmangment of te Company.Interna Asds is respoible for internalfinancial and auditand spport foreer audts. SpedalS e and Reporwthis. srvic will carryout st and pepa repor for whic thereis no expro or capacityin the watingdepartments, at the requestof the senior for exaople onomic and cost_ed s_,l rate and cha saes. I onoa studies. PAlbk Relad od Irer wr mata4hl is responsie for respose to variousgovepnmnta initiatives and acttes, submisionsto Micipal GovNmet ad othr lvels of gov reqig cordnatio of multiplereprts, preaation of theAnmual Report frm te matedalsmtted -68- A8 by al dpm , preparation of normation releases on the company's activitiesand plams, prepton of pblc Ifrmation brochres on variouswastewater issues, conducting seminars and lectues for scool and geneal publc on wastwar, publWig the emloyee newsetter withtopics of nterestto the employeesand tte managemen. 21. Corrate Sevice. Me objctive of CorporateSevies shouldbe to provide effectiveservice and supportto the operatingdepartmens and to the sior managementof CSC. It inuludes: P cal Servces with regisy of customeraccounts, gene acoung and fancal eotig for all cos ceers and companies,capital assets aountin anddepreciation rgister, annualopeat and capitadbudgets as well as monthlybudget performanc reports; onwaed YMme Is reponsiblefor staffing,scenig of applicantand hiring personnel, mai_daIngpersona files, admi ting the salariesand pay scales, maintag cur positon desciptins,addressing housingneeds of Companyemployees, employee rltions and adm I the Company'sdiscipline policy, payroll and employeebenefits administtion, timekeepingrecording, including vacations and sick leave, staff trainingand development. Mastes Managementinvolves materals evaluation and purchasing, supplying materia through cent storesto all operatig departmens,maintaining materi inventoiesappropriate for the level of anticipatedactviy to preventshortage of supplyas well as ovesocking. Central Equ4pen Servces: purchasingand keeping mobile equipment and heavy equipment for rent asO to the operatingdepE. qwpmentwould iclude tractors,backhoes, loaders, other heavyseiized equipment,trucks and auos, servicig the equipment,training and cerfying equipmentopeators. brma Systems:for speciaizedassisuance and adviseto the users of computerequipment, evaluation and selectionof appropriatecomputer system, computer systems ifican, acquisitionand commissioning, systems servicing, program development, stff trinig and assistance. 22. eelg Deprent. The objectiveof the EngineeringDepatment is to providedesig servicesfr the operatig and constructondepartmen. It has three units; Desgn to preparecontruction plaos and budgets for capital projects, approve designs undertakn by other agencies,issue and dates ds and specificionsfor wastewaterand stormwater desg and constuctin, provide assisance to other branchesof the Companyin solving probemsof egieern nature;Engineering Records to main accurateegieaing records for aUcapital asets, makecorrecons and updatesas necessaryand computerizewatwater companyrecords ino a GIS format;and SystemsPerfonnce Analysisand Ew lon: to analyzethe sewageflows, caractercs, infitration,pipe breaks, and energyconsumption on a reguar basis,industi waewater maagementpractices and waterconsevon measuresat reguar intervalsto assessbylaw compliance, penalty structures and overall wastewater treatment and managementpractices, to analyzeperfonnance of municipalwastewater treatment plants to meetreceivg watersstandards established by the EnvironmentalProtection Bureau. 23. Capital Consrunton Department. Ihe objectiveof the CapitalConstruction Dqntmemis to built new wors by contractg and supervisingthe constructionof major new works and constuct themselvesemergency works. It includesfive units: ProjectManagemenm, for contract prepaation,management and constructionsupervision, E:stalng and Accounting for constuctingcost esdmatig and accounting,onsrxtion Crew for minorconstruction, Equpmet Opffalo to opete heavyequipment and trucks; Equ Maenan, repak and supplysmall equipment and worktools to the constructioncrews. -69- AnKJ

24. Wastewate Coleeion Sstem Departmet. he objectiv of the Wa ater CollectionSystem Depm t is to ensuretha all exting sewerwork are wellmaitaed and kept in optmal operatng condidon. t includesa numberof serices for exaple 24-Hour EmergencyResponse and Dispatch Office to receiveand log emegey caUsand coordinateand ass standbycrews to address emergencyinvestaons and repas, followup on complaints, keepoperati and repairstatstics. It has districtoffices which perfom regularispections of sewer sysem compones, operat andmaintain pumping station, cay out video Inspectin progrm tD detme seawesystem repair and rehabilitationr e , replace derirated service connections,investg and eiminate cross-connectionsfrom he stormwat systemand maitain accurate records. 25. StormwaterDrainage System Deparbnt. Ihe StormwaterDiage System Departmenthas similarresponsibilities as forthe Wastewte Collecon SystemDep , but specificallyfbr the drainage system Iitialy can be envisagedthat both depaents ar joined.

26. Munidpal Wastewa Treatment Department. The Wasta Treatment Departmenthas very difeen staff from the other two opeating d as opeating treatmentplants asks for highly specialized knowledge in chemicaland biologia processe. The staffwill have to operat the plantand continuouslyevauate the processand system peon ce in relation to effluentdischarge standards. Staffing and tining of dis demnt wMitake placeduring construction of the treatmentplant.

27. Complan Monitoring tmeD. TIhCompIianceMonitoringDeD_rtment will have to work closelywith the other opating d In ensurig that industr dischargesto the sewer system complywith the sewer use bylaw and effluentdischage standards. Shaft 28. Fromtihestandpointofstaffing, CSC Ismore critical CWSCsincepersol with appropriatequalifications may not be milable fromwithin the exit wastewaterutiliy to fill key positionsfor the proposedCompany. It maybe necessaryto eamine the tot senior staff requirementfor both CWSCand CSC in relationto senior staff availabilityfrom the exsting organizations.The transfr of someof the experiencedemployees from CWSC to CSC may be necessaryin orderfor CSC to get a goodstart ChangChunMunicipality will needto addressthis issue as soonas an agreementis readcedon projectimpl n. 29. Curendy the ConstructionBureau employs330 people involvedwith the seweragesystem. Consutas haveesdmated that an additionalcomplement of 670 peoplewil be requiredby 1996. Thestaffing reqireme are smmarizd as follows: -70- ASB18

Item Peznanent ftaff

Current Operation 330

Stage I Implmntation Progre North Suburb WITP 200 Collection system Operation & Maintennce 320 Collection System Rehabilitation/Rlplcsment ISO Total Current Plus stage 1 staff Requirement. 1,000

30. memreiement fortempory staffcut be dfine at is timesie the new organzato can only deemin th ne for temporary employees when CSC has been esblied and in operationfor a piod of time. -71- AWU

s~ ja

!v ~~~1 1X111111

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sa.i-~~ib ihIJ's

.~~~~I Ii' '

jf._ Jj iJ Ju,g1ftjj jtJ jJlii a ChangchunWastewater Management Company

. I~~~~~~WASTEWATERCOMPANYI

PLANNING SERVICE * LONGRAN PLIM SPEC1 STUDIES . LEOGNSERYlCES AN REPORTS * SEWERRATE .NA N SCiEOLEWPllT .lo . TOWATER COMPNAY 31TWOBI * IMTERNALAtIITS 'E,O, ENTA A'FAIR

WASTEWATER

CO-PORATE EIQfiIWQ WASTEWATER STORMWATER MWICL CAPITAL CIWUANCE SERVICESu CLCT DRAKACE WASTEWATER CONSTRUCTION MOMTORt OEPART#1T S PARMENT SYSTEM SYSTEM TREATMIENT CWTIIENT OEAMTET .I .M DEPMENOEPARTMENT OEPARTMW

. FPSANCIAL . DESKO ISTRICTOFICES DISTRICTOFFICES * PLANTOPERATION | PROJECT * SANITARY SERVICES * RECORDS * OPfRA~TIOAND * OKf5ATIDNAND AM UA4AW4ANAC MANAGEMENT * CO1MNE * PERSONE * SYSTEM MAINTANANCEOF MINTAWACE I BLDUTSAND * ESTRATWO& | INDUSTRIAL MAEIMENT PERFORANCE SEWERSAND * EQUPNENT COSTS ACCOIIINTO - STOMWATER| *MANGERMS ANTELUATION P1W STATIONS OPERAtIR0 * REPORT | CON * INDTRAL N"QEIGNT EVALUAT *REGULAR * RtEGULAR PREPARATION CREW IESN * CENTRAL INSECTION JSETU PROCESSAND * EOLeIENTLIESN EOUPUEN * VVO I SYSTEM OPERATIN * CENtR,".IN * VDEONKCtl0N # CROSS PREFORMANCE *aSA EOW'UENI

: SILI l |4TERIALS*lTMA MO |-

COPRECTION IrO |N*EFCTT COT CONTROL*PSS COT * RECORDS | -73- ANEtX.9

ASSUMPTIONSFOR FINANCIALPROJECTIONS CHANGCHUNWATER SUPPLY COMPANY (CWSC)

Tariffs Tariffsincrease by the followingpercentages. Increases are effectivein Decemberof the prioryear to slow for a fullyear's biling at the higher levels. 1993 68% 1997 17% 1998 6% 1999 1% 2000 3% 2001 3%

Tariffs cover aU operadingcosts includingdepreciation and interest.

InfLation Infationis 6 percentIn 1992and 5 percentthereafter. Operating Costs An cost exceptinterest and depreciation increase at the rate of infaion.

in addition, 1993 power and chemical costs are adjusted by the percentageincrease in production.

IncrementalCOSts for 1997 are based on estate by CWSC and its consultantsadjusted for inflation.

Supply and transmissioncosts are inclwfedin CWSC accounts even thoughthese wil be contactedto the WaterResources Bureau. CWSC willpay all of thesecosts.

Sales An additional 27 mld of water is avaiable for sale in 1993 to be distributedin the sameproportion as esting sales.

An addional 380 mld is available for sale in 1997 as the result of this project. It is distruted to residentialand nonresidentialusers in the sameproportion as currentsales. Theseare conservativeassumptions as it is likelythat indusies willget a largershare. However,in the first yeardomestic sales may be higher as industrymay takemore time to adjustto the increasedsupply. -74 - ANNEX2

Unbfled Water Uibslled w 1s20 pecent of productioneacept in 1997when it Is 25 percen and 22 per in 1998. The hier pec gesrflect the timenecsy to deal withleaks caud by higherpressures. Capital Spending The onlycapital program is the project.

LendingTeram hnterestis S.5 percent with repyme over 10 years begining in 1998. LocalFhnndyg The Goverment of China provides Y 180 mIllion; Jin Province providesY 300 million;Changchun Municipaity provides all funds neesary, not provided by CWSC. CWSC's contribtion b lited to the amountavailable from the assumedtariff nase. ADl state, provincialand ciy fundsare equityconrut.in. Equityconbutions are cncntated In the early yearsto meetcash flow reqeuim . ProJectCompleon Theproje issubstantally completed and opational inDecember 1996.

Staffing Staffingincreases in 1997from 3,100 to 4,470, as estmatedby CWSC's cotsulants.

Profits All profitsare retainedby CWSC.

Account Recivable Accountsreceivable are equalt thwreeweeks' sales; this is the 1990 level.

AccountsPayable Accountspayable are adjustedfor increasesin operatingcosts oter tan interestand dep on. Inventory Inveory is adjusted for increases in chemicals,repairs, and maintenance.

-epredation Depreciationis 2.5 percentof gms fixedassets.

ReplacementReserve Transfers to the reserveequW epedtur. Ihus, there is no net impacton cash fl*w. Opeat interest The cuet levelplus the project. The projectloan conmmtent fee is includedwih operatinginters Capitalized Iterest All interestis capitalizedthrough 1996. Fixd Assets Fixed Assetsincrease by half of 1990 work in progressin 1991 and 1992. In additon,they incres by Y 167mIllion in 1993bece of the completionof cur work on WTP 2. They remainconstat until 1997,then increaseby the amo of the projectexpent, Including capitized Inees -75- A

CmN

CICANGHUN WAT1ERSUPPLY AND ENVIRONMENTALPROJC Proet FanoImg Sum-m

Yuan USS (Million) (miion) Total CIAi 1,450 266 PrOJet 1.323 241 Capitalizedinteret 82 1S Land 54 10

Watotal 1,203 219 Prject 11093 199 CayitalizedInterest 70 13 Laud 39 7

Wastewatertotal 269 49 Proect0 243 44 Capialied intst 11 2 Land 1S 3 IDA Shae (Not including- land de- cost or Water 49 % Wasteuwatr 49% Loa terms Amortition 10 Yam Begins 1998 Ifnt rastem 6.5%s Co _nmibacatfoe 0.75 %

Lo Amount Water 538 98 Watwae 120 22 TOal 658 120

Annual Ddat Savice P Waer 7S Wastwte 17 Total 92

Local Share of Project Cost Water 665 Wastowater 149 Total 814 Les St" & Prvino GOC Aocation 180 33 Provica 300 55 CMG Share 334 61 Finane Bume 179 33 CWSC 1SS 28 CHINA CHANGCHUN WATER SUPPLY AND ENVIRONMENTAL PROJECT Waw Demandand Sales Proas 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 <- Actul <- - Projed Pop"UliOn(000's) 1,736 1,762 1,788 1.815 1,842 1,870 1,898 1,926 1.955 1,985 2,014 2,045 2,059 Incres 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 0.7% Water Dend Resddent 218 230 243 256 271 286 302 318 336 355 374 395 417 InstItiona 105 107 109 111 114 116 118 121 123 125 128 131 133 CommIal 15 15 t5 15 16 16 16 16 16 16 16 17 17 IndurIl 303 315 328 341 354 369 383 399 415 431 449 466 485 Total 641 667 695 723 7SS 787 819 854 89a" 927 967 1.009 1.052 Watr Sales Residet 0 100 100 91 91 97 97 97 97 97 97 97 97 97 Instowna 0 90 90 82 82 88 88 88 88 U U 88 88 88 ComercIal 0 IS IS 13 13 14 14 14 14 14 14 14 14 14 Indust 0 137 13? 124 124 133 133 133 133 133 133 133 133 133 Total 0 341 341 311 311 332 332 332 332 332 332 332 332 332 PercntaepChang Rdenald 9% 0% 7% 0% 0% 0% 0% Os 0% 0% 0% lnsitludo. -9% 0% 7% 0% 0% 0% 0% 0% 0% O% 0% C _mmrcI -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0% Industrl -9X 0% 7% 0% 0% 0% 0% 0% 0% 0% 0% TOt -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0%

Wte Sales(Lcday) 246 250 251 253 268 273 373 373 373 m 373 373 379 Wa Sals (Lpcaplday)UMA S1 0 ConsuerCateor

Ixncease) 0 0% -9% 0% 7% 0% 0% 0% 0% 0% 0% 0% 0% 310 310 310 333 333 333 364 480 601 631 63. 63S

Rtawwwr ales 46 46 46 46 46 46

DemestlWae Rate 0.10 0.10 0.20 0.20 0.34 0.34 0.34 0.34 0.39 0.42 0.42 0.43 OAS (Yuala3) 0.20 ndcionmo.lbult.Rate 0.30 0.30 0.50 O.S0 0.84 0.84 0.84 0.84 0.98 1.04 1.05 1.08 1.12 0.50 AveragWatr Rate 0.23 0.33 0.38 0.38 0.64 0.64 .4 0.64 0.7S 0.79 0.80 0.82 0.85

Cumulaive 1096% 17% 22% 29% 3S% 42% 49% 56% 64% 72% SIs CimagciunWatw Suly & EnvirormentalPtoject

Caucl2mnWatr SupplVCommanv ProliectedIncom Statem 000's Yuan

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 ooo 2001 REVENUE Actu - P-Projeted - _l- Domestic 6,318 10,525 10525S 18,907 18,907 11,907 18,846 40,661 46,094 47,276 48,221 50,150 hutituional 13,278 18,093 18,093 32,501 32,501 32,501 32396 69,899 79,237 81,269 82,894 86,210 Commerca 2,194 3,337 3,337 S,994 5,994 5,994 S,97S 12,892 14,614 14,989 IS,289 IS,900 Industrial 25,681 26,404 26,404 47,431 47,431 47,431 47,278 102,007 115,635 118,600 120,972 125,811 Odler 2,129 1,719 1,719 2,888 2,888 2,888 2,888 3,466 3,777 3,777 3,853 4,007

Toal watr reve 49,600 60,078 60,078 107,721 107,721 107,721 107,383 228,924 259,357 265,911 271,229 282,078

Co.noloRepairs 80 64 64 108 108 108 108 129 141 141 143 149

OPERATINGREVENUE 49,680 60,142 60,142 107,829 107,829 107,829 107,490 229,053 259,498 266,051 271,372 282,227

EXPENDffURE

Salaries 4,920 S,632 5,970 6,268 6,582 6,911 7,256 14,949 15,696 16,481 17,305 18,171 Power 11,322 16,081 17,046 19,138 20,09S 21,099 22,154 63,037 66,189 69,498 72,973 76,622 Cemics 9,749 13,147 13,936 15,646 16,428 17,250 18,112 38,508 40,433 42,455 44,578 46,807 Maindmance S,975 5,744 6,089 6,393 6,713 7,043 7,401 14,534 15,261 16,024 16,825 17,666 AdinIovorhead 3,768 4,539 4,811 5,052 s,305 5,570 5,848 19,682 20,666 21,699 22,784 23,924 Sals Tax 1,619 1,965 1,965 3,523 3,523 3,523 3,512 7,391 8,374 8,585 8,757 9,107 Rotirement 1,265 1,379 1,462 1,535 1,612 1,692 1,777 1,866 1,959 2,057 2,160 2,268 Major Repir S,565 7,110 7,S37 7,913 8,309 8,725 9,161 9,619 10,100 10,60S 11,135 11,692 Interest 218 IS 20 969 2,707 1,218 355 34,191 34,176 32,371 29,611 26,671

EXPENSES 44,401 55,612 58,835 66,437 71,273 73,036 75,576 203,777 213,454 219,776 226,129 232,928

INCOMEBEFORE DEPR 5,279 4,530 1,307 41,391 36,556 34,793 31,914 25,276 46,044 46,275 45,244 49,300 Depreciation 3,020 5,451 6,012 8,117 10,218 10,218 10,218 25,175 40,210 40,287 40,287 40,287 TOTAL EXPENSES 47,421 61,063 64,847 74,555 81,491 83,254 85,795 228,9S2 253,664 260,063 266,416 273,215 _ _ - _- - -__…--_- - _- - -_ __ ------_------______… ------NET INCOME 2,259 (921) (4,705) 33,274 26,337 24,574 21,695 101 5,834 5,988 4,956 9,012 ChangobuWate SupplyA EvlrownestaProjec

C uachn Watr S= om v Priected Ble S OOOs Yuan 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Asss Astuel - -' - - Projected- Grossfixedmet 134,323 240,312 240,666 408,727 408,727 406,727 406,727 1,605.2911,611,491 1,611,4911,611,491 Accumuldod 1,611,491 depreciaion 34,847 40,29 46310 54,428 64,646 74,864 6S,082 110,257 150,67 190,754 231,042 271,329 N1tfixmd ase 99,476 200,014 194,356 354,299 344,081 333,863 323,645 1,495,0341,461,024 1,420,7371,360,449 1,340,162 Workin prgm 708 1,415 1,061 170,666 653,634 1,014,007 1,178,264 (0) (0) (0) (0) (0) Cas 7,860 11,745 14,522 14,2 14,522 14,521 14,522 31,464 33,252 37,324 37,702 38,m AcOunt evablems 3,007 4,752 3,466 6,215 6,215 6,21S 6,19S 13,207 14,963 15,341 IS,648 16,274 Othereeiiabhs 779 1,560 1,S60 1,560 1,S60 1,S60 1,560 1,560 1,560 1,S60 I,60 I 5w 1nvma 4,471 3,787 4,014 4,363 4,581 4,810 S,050 9,126 9,53 10,062 10,565 LO 11,093 ° tesmlavtme--I 226 326 326 326 326 326 326 326 326 326 326 326 ToWl"N 116,527 223,599 219,305 S51,9SI 1,024,918 1,375,3021,529,562 1,S50,7181,520,706 1,485,350 1,446,2501,4.0,347 LisbW Awoomspqabh 7,733 7,100 7,511 8,361 8,756 9,172 9,606 21,657 22,818 23.933 25,096 26,340 Slaoattwa be*lam 1,800 1,S74 1,574 1,574 1,574 1,S74 1,S74 1,574 1,574 1,574 1,574 1,574 Tae MINb 610 150 ISO 150 150 ISO IS ISO LSO O150 I0 ISO RVp*r 3,402 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 5,775 ( s a(2,419) (2,792) (2,792) (2,79 (2,792) (2,7 (2,792) (2792) 7M (2,794 (2,72 Toal e t 792) 11,126 11,807 12.218 13,066 13,463 13,87 14,313 26,364 27,S25 28,640 29,803 31,47

MDA 0 63,566 295,446 460,660 S25,702 534,706 497,701 455,241 410,022 361,863 TOWal lim 11,126 11,807 12,218 76,634 308,909 474,539 540,01S 561,070 525,226 483,61 439,62S 392,909 1quty IOS,401 211,792 207,067 475,316 716,009 900,764 989,S47 969,648 99S,481 1,01 1,006,425 1,01,S437

TalduIq16S721,0 SI9I1041 1,7,0 1S952 ,S,1 1,07814S5 l,4,5I Cani.WaterSuppily & Envirmmitl Prjoect

Clunon Wabt Sply C Sbouceand Awlication of FBuds ODD'sYuan 1990 1991 1992 I993 1994 1995 1996 1997 1998 1999 2000 2001 Adua C- -.- - Projected -- Soown NA Io n. 2,259 (921) (4,705) 330274 26,337 24,S74 21,69S 101 S,834 S,988 4,956 9,012 Deprecition 2,809 S,451 6,012 8,117 10,218 10,218 10,218 25,175 40,210 40,287 40,287 40,287 Sitae contnrnltion 17,447 66,677 44,798 10,587 0 0 0 Povhincia ontition 29,079 111,127 74,664 17,645 0 0 0 0 0 Cb=nrA=unmounicial gov. (1,981) 107,312 18,430 36,S51 40,718 38,856 0 0 0 0 0 IDA Craeit 63,566 231,880 165,214 6S,042 9,004 3,050 0 0 0

Tol sour 3,087 111,842 1,307 339,913 482,791 360,187 164,044 34,280 49,094 46,27S 45,244 49,300

Use: Worig capil (900) 1,261 (1,470) 2,247 (177) (186) (214) (962) 1,051 (257) (354) (89) Amortizaion 0 0 0 0 0 0 0 0 40,055 42,460 45,220 48,15 Capitadspeg 853 106,696 0 335,600 471,300 335,800 132,200 18,300 6,200 0 0 0 Capitized inst 0 2,066 11,668 24,S73 32,057 0 0 0 0 0

Tdal us (47) 107,9S7 (1,470) 339,913 482,791 360,187 164,043 17,338 47,306 42,203 44,866 48,070

Chap incash 3,134 3,88S 2,777 0 (0) (0) 1 16,942 1,788 4,072 378 1,230 Cashb_aa 7,860 11,745 14,522 14,S22 14,521 14,S21 14,522 31,464 33,252 37,324 37,702 38,932 -80- ANNEX9

ChangchunSewerage Company

Ei; IncomeSat

1999 12

OPERATINGREVENUE 69,554 72,337 74,191

EXPENDITURES

Salaries 9,295 9,777 10,259 Power 5,787 6,076 6,380 Maintenance 5,812 6,102 6,407 Admin/Overhead 3,499 3,674 3,858 Sales Tax 2,274 2,365 2,052 Retirement 1,859 1,955 2,052 Sewer Cleaning 3,645 3,827 4,019 Interest

EXPENSES 39,197 41,558 42,602

INCOME BEFOREDEPRECIATION 30,358 30,779 31,590 Depreciation 17,414 17,414 17,414 TOTAL EXPENSES 56,610 58,972 60,015

NET INCOME 12,944 13,365 14,176

Amortization 8,912 9,491 Assumptions Water Sales (000 cubic meters per day) 596 619 635 PercentageCharged 80% 80% 80% FenperCubic Meter 40 40 40 Cumulativeinflation since 1992 35% 42% 49% Fixed Assets 696,544 696,544 696,544 DepreciationRate 2.5% 2.5% 2.5%

Operatingcosts are based on engineeringestimates adjusted for inflat. -81 - AANE lo

ENVIRONMENTALIMPACT ASSESSMENT

Introduction

1. Changchun is the capital of Jilin Province, located in the northeast of the People's Republicof China. It is the centerfor political, economicand cultural activitiesof the region. The city has experiencedsteady growth In the past and is anticipatingcontued growth in the foteseeablefuture. However, throughoutmuch of its recent history, Changchun'swater supplyhas been unableto keep pace with increasingindustrial and domesticdemand. 'Me water shortage has now reached such proportionsthat it threatensto suppress further industrial and domesticdevelopn2nt within the city. Also, Changchuncurrently has no wastewatertreatment other than the 6,600 m3/dtreatment facility at Auto Plant No. 1. Many areas of Changchunrely on creeks and open channels,which pass throughresidential and industrialareas, to conveyraw wastewater to the Xinkai and VItong Rivers. This exposes the citizens of Changchun to unacceptablehealth risks from disease-csing organismsand toxic chemicals. The ecosystems downstreamfrom Changchunalso suffer from these conaminated wastewaters.

2. The water supply and environmentalproject for Changchun is aimed at improvingthe existingwater supply and wastewatermanagement systems. The existingwater supply capability will be expanded from the present 438,000 m3/d to 794,000 m3/d at the completion of Stage 1 (1996) of the project while wastewater treatment systems capable of providingprimary treatmentwill be constructedfor the city.

3. For the water supply portion of the project, in addition to transferring approximately450,000 m3/dof water from the SecondSonghua River to Changchun,a number of other componentsnecessary for the treatmentand delivery of the treated water wil also be included:

(a) water transmissionvia the Chalu River and the ShitoukoumenReservoir to the city,

(b) water treatmentplant constructionand upgrading,

(c) water distributionsystem analysisand improvement,and

(d) water utility reorganizationto streamline the existing structure into a more efficient and effectiveoperating company.

4. The proposedwastewater management project will constructa primarytreant plant (North SuburbWastewater Treatment Plant), that will treat 368,000 meld wastewaterfrom the Yitong river drainage area collectionsystem and remove about 50 percent of the pollution charge. -82 - ANNEKI10

5. The wasewatermanagement plan also nudes:

(a) etnion of the exng watwater collectionsystem, and b) foration of a wastewaterutlity company. 6. A Candian consultingfirm, UMAEngneeing Ltd. (UMA),was retainedby ChangchunMunicipality to developa strategicplan for augmentingwater supply and addsing environmentlprotecton to the year2020. Theplan wasdeveloped in August1991 as part of the feasiility study in accordancewith the World Bank's eiements.

7. The World Bank's policy for investmentlending requir that an eonmal impact _asm (EIA)be preparedfor large-scalewater supply and wastewatermanagement projectsto ensure that the developmentoptions considered are environm y sound and sustnable. bis reportpresents the baselineas well as the predictedstatus of the project activitiesduring the pr uction, constuctionand operationphases of the project. An environmentamanagement plan fc: mitigatingadverse Impacts and maimizing beneficial impactshas alsobeen outlined.

Policy, Legal, and AdmInistrativeFramework 8. This environmentalimpact assessmentis prepared in accordancewith the equirementsof the WorldBanks OperationalDirective 4.01. ne national,provincial and localenviromental laws and regulationswere also referenced. 9. Ihe ChineseNational Environmental Protection Agency (NEPA) is the highest authorityon environmentalpolicy but sharesauthority with the Ministryof Constructionand the Mnistry of Water Resourceson the development/utiationof the SonghuaRiver water resources. Similarly,Jilin Provincial Eavironmental Ptecton Bureau(JEPB) is the highest level of authorityon environ l policy in the province. JEPB shares authoritywith Prvincial Bureauof Constuctionand Bureauof Water Resourceson the provincialwater resources. The Song-LiaoRiver BasinAdministration is also responsiblefor and coordinates the water quantityand qualityof the SonghuaRiver. 10. Duringthe enviromentaldata collection and impactassessment stages, several meetingswere held. Representtivesfrom different local, provcial as wellas nationalagencies participatedin thesemeetngs along with UMA and the WorldBank staff and consultans. Analysisot Alternadves 11. Several alternativesconcning the transportof water, the water treament systemsand the wastewatermanagement schemes were examined in the feasibilitystudy. Those altenatives includeda direct pipelinefrom Maja to Changchun,pipeline instead of unnel element,different intake locations,etc. Basedon the overallconsiderations, but primarily economic,cost and enviromentalfctors, one alterative wasselected. lhe followingsection describesthe recommendedalternative. - 83 - ANNX 10

Ptojec Descriptn

Water Supply

12. Ihe watr upply portion is the main objecdve of this project. The recommendedwater supplyaltetve providesfor the trasmison of raw water from the SecondSonghua River tO Changhn via the ChaluRiver and the Sh u Reservoir.Ihe waterintak fromthe river as wellthe fist of three newpump stations will be locatedat Maja; the other pumpstations will be locatedat Tunshasi and Dasui. Tle route of the tserred water wlll take it from Maja tO the Tanshansipump staion, trough te 7.9 km Laoyeding tune, to te Dasulsation and into the ChaluRiver. At the north end of the Sho n Reservoiran equalvolume of waterwill be withdrawn.The Sh men Resevoir intakel pumpsto willmove the waterto the Fanguguo boosterpump station where the supplywill splk between th rutes to the exst Water Treatmet Pln No. 1 (T 1) nd Water TreatmentPlant No. 2 (WTP 2). All of the raw water supplyfor WTP 1 and someof th Wpplyfor WTP2 willbe providedfrom the SecondSonghua River. Thebalance of the supply to WTP2 (220,000mP/d) will come from the ShooeChalu basin In addWon, apprximaty 20 percentof the supplyfor the newWater Treatment Pla No. 3 (WIP 3) wil be from the SecondSonghua River. The remaining80 percentwill comedirecdy from the XinichengReservoir through twin pipelines. 13. Afterfrs stageconstruction (1991-9) the dailywithdrawal rate from the Second SonghuaRiver will reach 450,000 m 3Id. Afterthe secondstage of invetmentand construction (1996-99)the withdrawalrate wil increaseto 950,000m&Id. Since the citywil be in a constan state of undersupplyit is likelytat the withdrawalrate will continueto increasein the early yearsof the next century. Furtherexpansions of pumpingand trent capacitymay become necessay. 14. As additionalwater tetment capacitywil be requireda new 220,000m'/d plant,referred to as WaterTreatment Plant 3 (WTP3) willbe contructed. Also, ratherthn expandingthe oldand inefficientWTP 1, a replacementplant referred to as WTP 1 Replacement Pln (WTP 1 R), wil be bult at a later stage. Upon completionof tds planthe original WTP 1 willbe decommissioned. MundelpalWastewater Man It Stratea

15. The wasater managementportion of this projectis providedto improvethe current and anticipatedwastewater conmin problems in Changchun. The main compoentsfor the proposedmunicipal w ater managementstategy are:

(a) Establisha new WastewaterCompany to manageand overseeall areasof the municipalwastewater system;

(b) Initiatea citywidewaswater monitoringprogram to accuratelydeterine the volumesand ch cs of wastewaterflows in the variouscontribut areas of the city;

(c) Completeconstruction of the Yitong River intrceptor sewer to convey w _stewaeto the site of the NordhWastewater Iem Plan his will - 84 - ANNE la

include3 km at 1.0 m diame, 1.9 km at 2.8 m diameterand 4.8 km at 3.0 m diameter concretepipe;

(d) Constuct a 368,000 m3/dayprimary wastewater treatment plant at the North Suburb Wastwater Treatment Plant site. Plant facilites will include inlet works, lift station, preatmen (screeningand aerated grit removal), primary clarificationand sludge pumping and anaerobic sludge treatment followed by sludge dewatering;and,

(a) Implementa stagedrehabilitation program fr the exisng wastewatercollection system. Ihe objectiveIs to upgade the lateral, trunk and interceptorsewers to reduce inflow and infiltration.

Indutil Waste Management

16. Currenfty Changchun has a diversity of industries but without an agteed industr waste managementstrategy. Each factory dischargesor treats its own wastes with minimaloverall envionmental consideration. The main componentsfor a future industrialwaste managementproject are as follows:

InstitutonalReform

(a) Concurrent with the establishmentof the recommendedMunicipal Wastewater Company,implement a sewer use by-lawand attdant regulfions for industri waste dischargesinto the municipalsewer collectionsystem.

(b) Expand the responsibilityof the present Song-LiaoRiver Basin Adminision to Include ambient water quality managementof the Second basin. This nsration would revise ambient water quality guidelines as required and undertakeregular monitoringof the rivers and streams within the basin. A draft terms of reference(OR) for the improvementof the Song- Basin Adminisation has been prepared.

(c) Form a planning advisorygroup composedof State, Provincialand the Second SonghuaRiver Basin Adminitation to advise the WastewaterCompany and the ChangchuwEnvironmental Protection Bureau (EPB) in the formulation and review of standardsfor effluentcontrol.

(d) Establisha ProvincialAuthority for Industrial Standardsand Approvals. This Authority would establish minimumdischarge standardsto be adopted within JUin Province.

(e) Establisha ComplianceMonitoring Department within the proposedWastewater Company. This departmentwould be responsiblefor approvaland licensingof all industrialwastewater dischages withinthe boundariesof Greater Changchun (Six Counties). This Departmentwould adsoconduct compliancemonitoring of all industrialdischarges to the municipalsewerage collection system. -85- AN=XO

(t) ChangchunEPB wouldbe responsiblefor compliancemonitoring of industri effluentswhich discharge dkety to a reeving wat orse withinte city. Industrialdischarges outside the city limits (Six Counties)would be Ihe responsibilityof the ProvincialAuhiority. Industrial Parks

17. Currently there is no industrialpark etablishmentin Changchun. It is recommendedthat an industrialparks be establishedin the northeastand southwestsecions of the City to ensureproper managementof the numerousindustries. A first site was aleady selectedby the Changchunmunicipality. The projectincludes -Changchun ToxicdHardous Waste Managementand IndustrialPark Studies"for which a draft TOR has been prepared (Annex11). Toxic/HazardousWastes Tramportation and Treatment 18. ChangchunMunicipality reported that currentlythe city generatesabout 5,000 tons per year of cyanidefrom the No.5 ChemicalPlant, about40,000 tons per year of boron sludgefrom No. 1 ChemicalPlant and approximately5-10 tonsper yearof nitrobeee eher and aminobemzeneether from Changahun Pharceutical Factory. Landfil and inceaton are beingused to disposethese toxic/hazardous wasts. it is anticipatedthat after the completion of the ChangchunWater Supply and EnvironmentalProject, new industriesand factorieswill be establishedand additionaltoxic/hazardous wastes will be generated. During project prepration, a centralizedcollection area was aready selectedby the Changchunmunicipality. 19. Ihere is a needto developa toxic/hazardouswaste ortation andt m straty for the City. Theabove-mentioned TOR for the Toxic/Hado WastesManagement and Industia Park also describesthe detailsof this strategy(para. 17). WatS ConservationPolicy 20. CurrentlyChangchun has no set water conservationpolicy although it is aware aboutthe needand potentialbenefit for such a policy. The ETArecommends a comprehensive industrialwater conservationprogram be establishedto reducewater consumptionand waste generation. Elementsof this policywould includerecycling of wastewaterstrams within industries,reduction in waterrequirements per unit of production,employee trainin progms in water conservationand waste reduction. The TA includedin the projectfocuses on this problem. 21. To furtherencourage water conservation,the Water CompanywiU graduay improvewith the helpof TA, accuratewater metering, and chargeindustil conm on an wincreasingblock" rate basis. Theprice of suppliedwater should increase as the consumption increases,rather than remaina fixedprice per unit of water. EnvronmentalBaseline Data 22. ChangchunMunicipality islocated in northeasternChina at proximately43°55' north latitudeand 125°18' east longitude. The centra service area of Changchunhas a populationof 1,762,000,as detmined by the most recent censustaken in 1990. The 8-A I taphy of the Provincecomprises the Song-Liaoplain in the certralpart, the lowergrassland regionin the westand the Canai mountaimwhich dominate the landscapein the easternpart. 23. Chang ihnsinthe cent of the Song-Liplain. The genera reliefof te city is unlatng with the lowest elevationbeing 194.0 m above sea level datum and the highest elevation at 247.8 m. The lowlying area is aong both sides of the Ytog River. The highest elevation is on the ridg sching fiom the universiq area in Zhaoyang district aong the railwaytD the southwestempart of the City.

24. Changchunhas a contnenta climate;the wir are long and cold and the mmers are hot and humid. Low winter t etu can be -40C and high summer temeraturs have reached39C. The averageannsal precipiation Is approximately600 mm. 25. The Ytong River flowsfrom southto north throughChangchun. A second river, the Xial, is a tributaryof the Yitongand flowsfrom southto northoutside the west suburb of the ciy. Flows in these rivers are nomaly low and receivethe watewaters dishaged from residendal,institutional, commercial and industrialdevelopment. These two riversdiscarge to the YimmaRiver which subseentlydcharges to the SecondSongbua River.

26. Themain crops in Changchunarea are corn, soyben, rice andgrain. 1dustri productionin ChangchunIncludes automobile, machinery, chemicals, pha cal producs, pape, textiles,elecunics, plating,food and others.

27. Chang bunis siated in a wae-short region. he small river bsin and groundwateryields are unableto providesufficient water for the city. Ihe presentsources of supplyare the XimlichengReservoir on the YitongRiver upstream of Changchun(184,000 mI day) and the Shoomen Reservoirwhich is fed by the Yinma and Chalu Rivers approximately40 km to the eastof Changchun(220,000 m?/day). Grounwater wells within the Citycontribute 34,000 m?/day. Currently the watersupply works are admistred by the Water SupplyCompany which repots to the City UtilityBureau.

28. Wasewatertreatm and e protectionis viruly nodstent in Changchun.The bulkof the wastewateris collectedby sewersand dischargeddirectdy to the Yitongad Xinai Riverswithout treatment. An excepon is the No. 1 AutoPlamt which has a treatmentplant (25,000mOld capacity), but its perfrmance is questionable.The prese wamwat_ collectionsystem i8 not sufficientto servethe demandfor drainage.Average sewer coverageis 40 to 50 percentof the city area, and 60 to 70 percentof the existingsewers are in poor condition.

EnvIronment__Impacts

Water Supply

29. Eoviromentalimpacts for the proposedwater supply project activities have been evaluatedwith respect to fivecategories: ecology, agriculture, aestetics and humaninterest and publichealth. Theseimpacts occur primarilyduring the constructionand post-construction phasesof the project. -87- ANNE

30. The ecologicalImpacts are concernedwith flora and fauna alongthe pipelie route, and transtlon betwee th SecondSonghua River and the Shitouomen Resevoir. Vegetatonon the pipdine routewDI be impactd by constuctionon the constructionright of way. Very little impactwil ocr to animaliUfe. 31. BothFengmn and Sh ereservoirs appearto have an amplesupply of majornutrients, phosphorus and nitogen for biologia growth. Sh komn conts more phosphorusan Fengman. Basedon field observationsof the high suspendedsolids loading whichappars to be princpallycolloidal days, it is probablethat nuch of the phosphorusload is inorganicand boundup in the sedimentsand not avaable for biologicalproduction. Based on phosphorusavaitility, Peagmanwould be classifiedas being mesotopic ari1Shit as eutrophic.Suspended solids loading in Fengmanappears to be low and oveall waterclarity far exceedsthat of Shtouloumenduring the open-waterseason. Ihese factorssuggest that the potentialfor Introductionof algaefrom SecondSongha River water into Shitoukoumen Reservoirwould be minimal.

32. Thereare ninefamilies and 48 fish speciesin FengmanReservoir, of which42 are nativeapd the other 6 have been introduced.The SecondSonghua River has 64 species. No informationwas avaiable on their disbtion or relativeabundace. The one exceptionis Acanthobramasimoni, a memberof the dacecup family. Ths speciesis exoticto the Fengman Reservoir,intoduced by accident,and now is very abundmtin the reservoir. 33. There are seven familiesand 46 fish speciesin the Yinmabasin including ShitoukoumenReservoir. Acanthobramasimoni i not amongthem. Early life stagesof this fish speciescould survive the transmissionfiom Majaand becomeestablished in the reservoir. The potti exists for transfer of one or more of the 18 additionalfbh species into ShitoukoumenReservoir via the proposedtransfer line. The potentialfor the introductionof parasitessuch as protozoans,flatworms and roundworms to the ShitoukoumenReservoirfishery waspossible and probable. If this occurred,the potenal existsfor lossesin the Sh umen fihery. However,fish stocksin the reservoirare not nativeand are in fact introducedfrom socking ponds locatedbelow the dam. Iherefore, the impactof parasitc ioduction is exected to be shortterm (fiveyeas) and relativelymior. 34. Lpreys havebeen in the FengmanReservoir, Second Songhua River and the Yima River but werenot foundin the ShitoukoumenReservoir even though it is part of the YinmaRiver. The arctic lampreyis a fish parasite. Although'notconsidered as seriousa potentialpest as the accidentalintroduction of the sea lampreyto the NorthAmerican Great Lakes,introduction of the arcticlamnrey to ShitoukoumenReservoir will very likely impact the commercialfiheries. Althoughnot expectedto have a devastatingeffect based on a lack of recordsin other parts of the worldcnceng significantimpact on freshwaterfisheries, the exact level of impactcanmot be predicted. However,if the arctic lampreywere a highly sgnificantfish parasite with regard to impacton wmmercialfisheries, there would be a longand detaiedliterature base concerning its impacton economicallyimportant fish species. Sincethis is not the case,the potendialimpacti threfore consideredto be low. Also, bothrivers, the SecondSonghua River and the YlnmaRiver are connectedat the confluenceof theserivers some 40 mils downstrem of the Sht Reservoir,and the absenceof lampreysin the reservoirmay be due to the commercidayintoduced fish. - 88 - ANNEXlO

35. Ahe withdrawalof water from Maja will reduce the amount of water available in the Second SonghuaRiver for dilution and assimilationof raw wastewaterfrom the City of Jilin. Inially 450,000 m3/d (1996)and ultimately(2020) 1,137,000m3/d will be withdrawnfor the city of Cbangchunfrom this source. The ultimate withdrawalis approxnimately10 percent of the recordedlow flow (95 percentprobability of occurrence). At the presenttime, the Second Songhua River upstream of Jilin City is a Class 11, while downstreamof ilin City a Class V river based on the BOD5 load (see full EA for data). Class V is the worst classificationin the Chinese National Standard GB3838-88. It is estimatedthat approximately25 percent of the current river flow under average river flow conditionsia comprisedof wastewatersfrom Jiim City. The implementationof effectivewastewater management for the City of Jilin is planned, in order to restore this river to a healthy state and to elevate its classificationto a higher grade than Class V or IV. A TOR has been prepared for the study of the overaUSonghua river water qwity.

36. Agriculturalimpacts along the pipelinetransmission route from Maja to the city are consideredto be minor. Loss of one crop year may occur in some areas during construction for which owners are well compensated. Disturbed soil along the route will selectivelybe replaced in the trench in order to maintainagricultural productivity after constructionhas been completed. Loss of agriculturalland at water treatmentplant No. 3 will impact a few area farmers as the total land requirementis estimatedat 10 hectares. However the positiveimpacts on the City of Changchunbecause of increasedavailable water should outweigh the negative impact on agriculturl production (para. 3.29).

37. Aesthetic impact will be minor because construction occurs in the rural countrysidefor the most part. Water TreatmentPlant No. 3 is located in the southeastextremity of the city in a sparselypopulated area. Therefore, there would be no impairmentin aesthetic appearancesubsequent to constructioncompletion.

38. From a human interestpoint of view, the increase in availablewater supplyof good quality will improve the standard of living and social well being of the citizens of Changchun. Availabilityof water to residentswho have very little water at the present time will impactpositively on personalhygiene standardswhich will reflect in improvedpublic health of the overall community.

39. The water supplyproject is essentialto the City of Changchunin order to sustain economicprosperity and to improve the stndard of living of the citizens. Both the short- and long-termimpacts resulting from environmentalfactors are minima!in comparisonto the benefits to be derived from providing additionalwater to the city in which consumptionpresently lags demand by approximately50 percent

Wastewater Management

40. Wastewater managementis a key component in the implementationof the proposed water supply project. The essentialelements by which environmentalimpacts have been evaluatedare ecology,health, recreation, aestheticsand agricuture. The ecologicalfactors concernedare river water quality, flora and fauna. -89- ANNEX 10

41. The Yitong, Ximkai,Yinma and Second Songhua rivers are presently polluted because of the lack of wastewatertreatment by Industriesand cities. The City of Jilin has a major impact on the SecondSonghua River as does the City 3f Changchun.

42. The staged implementationof pollutioncontrol for the Yitongdrainage area will remove from the receivingwaters the majority of the waste loading contributedby the City of Changchun. The primary water resources affectedare South Lake and the Yitong River. The secondary water resources affected are the Yimna River and the Second SonghuaRiver at the confluence and downstream. Initially the Yitong interceptor from south to north will be completedtogether with a primary wastewatertreatment plant at a capacity of 368,000 m3/d. This will eliminate the discharge of setdleablesolids to the river which has a major imract on both the Yitong River fishery, water quality and public health. The ultimate goal for the wastewatermanagement project is to elevate the river classificationof the Yitongto Classm or H.

43. At present the YitongRiver (35-390mg/l BOD5) is biologicallyunproductive in terms of fish, benthic organisms and other aquatic life. In most instances the assimilative capacityof the YitongRiver and its tributary, the Yinma, appear to be exceededmost of the year from downstreamof Changchunto its confluencewith the Second Songhua River. Within the city, South Lake is heavily impaLtedby wastewaterdischarges and exhibitspoor water quality.

44. Followingthe implementationof full treatment, establishingof industrialzones and an effective industrial waste treatment program, the river eventually will still require dredging in selected areas in order to remove toxic components such as heavy metals and organics that have accumulatedin the bottom and bankside sediments. For some time in the future concern will remain over the consumptionof fish because of the potential for bio- accumulationin fish tissue which could pose a treat to public health. Similarlybody contact recreation is not recommendedin the YitongRiver or SouthLake because of the concernsover public health due to the gross pollutionlevel.

45. The rivers, streams, South Lak!e and other small ponds are aesthetically displeasingfrom the standpointof appearanceand odor. Wastewateroutfalls currently discharge directly to these waters without any form of pretreatment.

46. Althoughthe health effects of utilizingYitong River water for irrigationare not known precisely, they can be inferred based on water quality information reviewed to date. During May, when the irrigation season commencesthe Yitong River carries an enormous quantityof industrialand domesticcontamirants. The withdrawalof these watersfor irrigation use poses a high risk for the transfer of potentiallytoxic materials onto land and subsequently into the food chain.

47. The program proposed in this project for environmentalprotection in the first- stage investment program (1991-95) is part of a realilic long-term strategic plan for environmentalremediation. Full implementationin the context of China's developmentis not likely to succeed within a decade. Many other far-reachingmeasures and culture changes will need to take place gradually. The program proposed includes the formationof a Wastewater Companyto address effectivemanagement, operation and control of the municipaland industrial wastewatersgenerated within the City of Changchun. Other measuresproposed include(a) the constructionof the Yitong interceptorand North SuburbWastewater Treatnent Plant (WWTP), -9 - ANNEIC

(b) mplemenaonof a ser use by-lawand relao to regulat and contol the dscrg of industria ffluens to the seweagecollection system and wat courses,(c) the Wastewaer Companywould handle appr and licensingof all industriialefflut dischargesin the six countes administeredby the Cityof Changchun,(d) revitalization of ChangchunEironmental Ptection Bureauto underta compliancemonioring of industrialeffluents not servicedby the seweragecollection system, (e) the formationof indusrialparks and IndustW treatmet centers for small and mediumsize industrywidtin the parka, (f) the impl tin of a toxic and bazadouswaste study to addressbandling, treatment and disposal of toxicand hazadous wast, and (g)to promoteambient water quality management of waterbodies and riversby the Song- Liao Water BasinAdmin ini order to assessperfrmance of environmentalprotection measuresimplemented.

48. Althtoughit is recognizedthat a primarywstewat treatment(30-35 percent BODremoval; 50 percentSS removal) will not completelycorrect the pollutionproblems in the receivingwaters downstream from Changchun,it willminimize the negativeimpacts. It is the intentionof the localauthority that after a few yearsof operationof the primarywastwaer plant,a secondarybiological wastewater treatment facilities will be constructedto fiuthertreat the wastewatersfrom the city. Thisstaged approach seems to be a reasonableway to solvethe city's wastewaterproblem because it will mimize the financialburden for the city and also obtainingnecessary experiences on howto operateand manage a wastewatertreatment network. However,since the secondstage of the wastwater managementis beyondthe scopeof this curnt, Xk. detailedEA was prepared. It is likelythat this secondstage wiUlbe financedby bilateraldonors. EnifronmentalManagement Plan 49. Theproposed activities during the preconstruction,construction and operational phases result in a number of impactson environment components. An appropriate environmentalmanagement plan includinga "resettlementaction plan' has been Identifiedfor the mitigationof thesepotential adverse impacts. The majorrecommendations are summarized in Table 1. Relocationand Resettlement 50. Chinesegovernment policy on resettlementis, covered under national and povinciallaws andregulations. The policy provides for. socialand economicreestablishnt of communities,with living standards the sameor better;resettlement within the samecounty, and if possible, the same township;resumption of original employmentor taining for alternatives;compensation for property;and reconstruction of publicfacilities. It was estimated that a total of 345.15hectares of landwill be affectedbecause of this project. Of this, 55,25 hectaresare permanentand 289.9 hectares are temporary.About 850 people are affectedby the project,about 550 personswill be resetled andabout 300 persons will be losingfamland. Ihe totalcost is estimatedt- bk Y54 million($10 million). A OResettlementAction Plan" has been preparedby the ChangchunCity goveent (AppendixK in the fullEIA) to addressthis issue. In-depthconsultation with the affectedpeople has taken place and the resettlementand compenlsatonappears to be welldone. *1

DY' a.}iiiIit( 7W a'ifti.|9I[

'IoE$4 -92- AN=

Table 1: MTATION/ENVIOnMo AL MANAGEMN PLAN SUMMARY

PROJECTPASE ACTIVIT VROTL NxGATIONMEASURES BY CWSCuMD/OR PARAMSTEROF CONCEON CSCAID HEIR CONTRACTORS

1. WATERSUPPLY 1 1 Preconstruct 4 on Land Acquisition 0 Reimburse and reemploy farmers for luA acquired for acces roads and pUmpstations ad water treatmt plant No. 3. * Relocate farmers displaced by Water Treatment Plant No. 3 to New Parm site. 1.2Construction Change in Land Morphology and * No cbange along pipeliae route. Aesthetics Excavated area to be restored to original conditions. * Changes at Treatment Plant and Pumping Station sites wll1 be temporary. Restore disturbed areas with soft landscaping (traes, shrubs and grass) around buildings. Flora and Fauna * Restore pipeline transmission route to original grade and plant trees and grass to restore surface. * Construct betmsperpendicular to sloped surface to minimize soil erosion. Dust/Nolse/Traffic Congestion/ * Apply water and dust retarding Health Hazard agents to road surface and restrict speed of vebicles. o Provide traffic control persoanel at coastruction sites to regulate flow of traffic. * Use mufflers on all engine-driven vehicles. * Regulate hours of work. Fisheries * Construct coffer dam at Maja to contain suspended solids in water to construction zone. Change In Land Use/Disruption * Restore 6arface of excavated of Agricultural/Loss of Material to original state. Natural Tratla Selective placement of soil. * Reimburse farmers for loss of production during construction period. * Restore wildlands to natural state as close as possible along pipeline route. 1.3Post- Alteration of Second Songhua * Construct intake to minimize any Construction River Flow Regime--Less change in flow pattern at Naja Operation Dilution Water Zn Second site. Songhua River Below Jilin City * Implement effective wastewater management proposed for Cbangchun (1991-95) to miuniize pollutio load for asimilation. * romte effective wastewater umnagement In Jilin City to reduce impact on river between Jilln and the confluence of Songhua/Yinma Rivers (Jilin province and city). -93- ANNEXQ1

PROJECTPHASE ACTIVITIERVlRO MITIGATIONMEASURES BY CWSCANDIOR PARAMETEROf CONCERN CSC AMDTHIR CONTRACTORS

Increased Water Supply to * No mitigation required. Changchun--oc"I Vell4eiz/1 Improvement In Living Standard Reduced Nature Vegetatio * Plant trees and graos to re- Growth on Pipellne Route vegetate the disturbed areas. Intrabasin Transfer of Aquatic * Withdrawal of water from Fengman at Species mid-depth. Probability for algae transfer is low because both Shitoukoum.n/Fengnan have snmilar algal specles. No mitigation necessary--continue water withdrawal at Fengman at same depth.

0 Lamprey/fish transfer control at Baja Intake If required (utilizing electromechanical barriers). Sludge Generation at Water * Dewatering of sludge by gravity/ Teatment Plant mechanical equipment. Disposal of usutral pH supenataut to farmland. ncreased Availability of * go mitigation required. Saleable Water to Consumers; increased Industrial Productivityt Custom Satisfaction; Improved Water Quality; Improved Distribution System Pressures Watershed Protection * Implement completion of 100 m buffer zones around reservoirs and lakes and 50 m buffer zone on each side of river/stream and discharge controls (Jilin and Changchun Reservoir Management Companies). 2 gftast.art Hana_eat 2.1 Preconstruction Land Acquisition * Reimburse farmers for land used for North Suburb WWTP. 2.2 Construction Aesthetics * Restore disturbed areas with soft landscaping (trees, shrubs,grass) upon completion of construction as required. Dust/Noiae/Traffic * Apply water and dust regarding Congestion/Health Hazard agents to road surface and restrict speed of vehicles. * Provide traffic control peraonnel at construction sites to regulate flow of traffic. * Use mufflerson machines and equipment. * Regulate hours of work. Changein LandUse--Loss of * Reimburse farmers for land used for Agricultural Income. North Suburb WWTP. * Relocate farmers to new farm sites. -94- ANNE 10

PROJRCTPU:SS ACTMTZI IROMOMMlaTIGATIGE IASUIES I (MC AND/OR PARS Of CONCM R C8C AND TO OTATR

2.3 Pot- Improd Vater ^ Costrctio of itoug "ver ConstruCtioo QUltyl/aned Rereeati Interceptor and Worth Suburb Operation Capabiity/Ehaned Irr toPriy v . Capability/1edue ealth * l plmet sewer use by-law and Risk/Reducton In Wast regulatlon. Loadlng to YTtong River/Tiame * Construct Iadustrial park and River/Second Soughua River. cooperative wstewater treatment center (Changohun munIcipality). * Implment study to prowide strategy for toxic wast bandlag,treatmsent and disposal (Cangohun wAnicipality). * Promote pollutio prevention concept (Changchua municipality and CSC). REn=nce Capability for Treated * Locate industruil park near Sorth 8ffluent Rouse Suburb WPT (Changehun mniecipallty). Generation of Sludge Requlring * Dewater digested sludge Disposal * Disposal to land, monitor forheavy metals and other priority pollutants. * Establish guidelines for sludge disposal to land. Potential for Odor Genaration * Monitor for hydrogen sulfide compnts, wind speed oan direction. o Impl^em odor control facilitie If odor levels offensive to farmers and housebolds In vicinity of plant. - 95 -ANNEX 11

TOXIC/HAZARDOUSWASTE MANAGEMENT AN INDUSTRIALPARK STUDES: DRAFTTERMS OF REFERENCE

Backrud 1. ChangchunMunicipality, located in the northeastProvince of Jiin,consists of the Cityof Changchun,which is the seatof the Provincialgovement, and fiverural counties. The Municipalityhas an area of 18,880ka 2. It has a populationof 5.8 mfllion,of which2.0 mmionare urban. The area has a temperate,continental monsoonal climate, with cold, long witers, and warm, short, rainy summers. Mean annualprecipitation ranges from 400 to 1,000mm; the averageamual precipitationis 700 mm. Jilin is one of the breadbasketsof China. Agricultureis well-developedwith large parts of farmlandserved by irrigationsystems, incorporatngseveral regulating and floodcontrol dams. Changchunis also an industrialcity with ominanl metal-worlingfacories and has a relativelylarge number of higher educationestablishments. Currently, over 3,400factories and enterprisesare spreadover the city, includingtractor, bicycle, railcar and instrumentfactories. 2. ChangchunMunicipality reported that cwurentythe city generatesabout 5,000tons per yearcyanide from the No. 5 ChemicalPlant, about 40,000 tons per yearof boron sludgefrom No. 1 ChemicalPlant and approximately5-10 tons per yearof nitrobenzeneether andaminobenzene ether from Changchun Pharmaceutical Factory. Landfilland incineration are beingused to disposethese toxic/hazardous wastes. 3. It is ticipatedthat afterthe completionof the ChangchunWater Supply and EnvironmentalProject, new industriesand factories will be establishedand additional toxiclhazardouswastes will be generated.

4. ChangchunMunicipality recently commissioned the ChangchunUrban Research Insute to conducta ChangchunCity IndustrialHazardous Wastes Management and Disposal SiteSelection and FeasibilityStudy. The ResearchInstitute recommended Sandao, a location about6 kilometerseast to the city witha disposalcapacity of 315,000cubic meters, to be the toxic/hazardouswastes disposal site.

5. angchun Municipalityalso commissionedthe ChangchunPlaning Design Instie to conducta ChangchunArea RelocationPlan for IndustriesGenerating Hazardous Wastes. Thatstudy recommended relocation of electroplating,metallurgy, cement, tanning and chemicalindustries to a commondesignated location outside the urbanarea. Therecommended locationfor theseindustries is in the northcorner of the East Suburbindusil park, eastof the Outer Ring Highwayand north of Shilibao. The proposed industrialpark comprises -96- A X 11

79.5 hectares, which is sufficientarea for the existing30 factoriesand allows room for fiuture expansion.

6. There are many uncertaintiesconcerning the accuracy of the above two studies, including: (a) only two sites were selected for comparison for the toxic/hazardouswastes disposalstudy; and (b) the classificationof toxic/hazardouswastes were not well defined-only three types of wastes, cyanide,boron sludge and nitrobenzeneether and aminobenzene,were considered in the study while other pollution generating industries such as electropladng, metallurgy, cement,tanning and chemicalindustries were not included. During appraisalof the ChangchunWater Supply and Envionmental Project it was determined that a comp--.hensive Toxic/HazardWastes Managementand Industrial Park Study shouldbe carried out.

Objectives

7. The objectivesof the study are to:

(a) studythe qualityand quantityof existingand potential industrialtoxic/hazardous wastes in Changchun;

(b) formulate a toxic/hazardouswaste treatment and disposal system, including collection,segregation, transport, and disposalof the wastes;

(c) prepare a feasibility design and implementationprogram of the toxic and hazardous waste treatmentand disposalsystem;

(d) describe and define roles for the governmentalagencies and industrialbureaus and enterprisesin the establishmentand operationof the toxic/hazardouswaste reatment and disposalsystem;

(e) describethe organizationresponsible for the managementof the toxic/hazardous waste treatment and disposal system and the definition of responsibilitiesof parties within that organization;

(t) establish an appropriate training program for managementstaff of the toxic/ hazardous waste treatment and disposal system and for government staff responsiblefor the supervisionof the system; and,

(g) study the feasibilityof creating a "specialindustrial/economic zone." Scopeof Work

8. The scope of work will includethe following:

(a) HazardousWastes in Changchun

(i) survey existingand predict future industriesin Changchun;

(ii) obtain informationon current and predict future toxic/hazardouswastes generationin Changchun; 97. AN 11

(ill) studycurrent practee of toxic/hazardouswastes management induding site selection and means and routes of transportation in Changchun. Reommmendways t improve these practices;

(iv) sudy laws, regulations and the govertnent agencies responsible for toxic/hazardoluswastes management. Recommend amendmenu or additionallaws and regulations as wellas the organization,fnction and proceduresof the toxic/hzadous wastesmanagement agency; (v) developcomuter softwareand data management systems to managethe toxic/hazardouswastes in Changchun;and, (vi) developand conductshort coursesand workshopsto train the staff dealingwith toxichazardous wastes mnagement. (b) IndustriaPark and "SpecialDevelopment/Economic Zone" (i) conductalternative sites study and recommendthe best site for the industrksapark; (ii) conductecncomic analysis and feasibilitystudy including the policies, laws, and regulationson the establishmentof a "specialdevelopmert/ economiczone"; and,

(ii) ff feasible, recommendbest approac'hesto create the "special development/economiczone"; Work Organiptlon 9. The work would be carried in teams composedof staff from Changchun Municipality,a local consultingcompany and the internationalconsultants selected for this contrcut. It is intendedthat the local team memberswZi gain experiencefrom on-the-job trainingby workdngwith the internationalexperts, as well as from overseasand in-country trainingcoures, whichwill be fundedunder the consultants'contract. Theproposed training coursesand schedules will be specifiedby the consultantsin theirproposal. The consuttants wilt desgnate stafffrom their organizationwho wiUbe their represenativefor each of the above proposedstudy components. 10. Therole and responsibilitiesof the internationalconsultants are to: (a) assistthe localstaff to developand managetheir variousactivities; (b) assistin preparingand revisingwork programs;

(c) provideadvice on assessmentand surveymethodologies; (d) reviewand appraisethe outputsof the variousstudy teams; (e) provideoutline and framework of interimand finalreports; '98- ANNIX11

Mt preparsummary report In Englsh and

() prepare ining matial and carry ou overseasand incounty iig

Proposed Work Schedule 11. I he overallime required to completethe varis sui andswve is xpectd to be oneyear. The osuants sh prepare a detaied shdue with ther proposia,after dscsion with the counterparttea. Rpw 12. -be consuls shallpr e an inceptionreport aer two monthsand midem progress port aftersix months. Draftlinal and flnal rports shallbe submittedat the end of the studyperiod. Ihe Ine iona consultantswil prpre wumY prges repoI English aftersix monthsfor submiion to Changhu Municty and IDA. At the completionof the studythe intea onsultat wil preparea FinalReport executv summarycontaining the man findin andconclusions of the studyand recomme for follow-upacdons.

Budget 13. The cost of the proposd studyis d to be $800,000. 99 ANM 12

MANAGEMENTANID OPERATIONAL SUPPORT FOR CHANGCHUNWATER SUPPLY COMPANY: DRAFEDESCRIPTON

1. There is a rewgnizedneed to managein an optmum way te scarce waot suply availablefor Cbanghu City ad to operat at a minimum cost the highly negy o tive Insalflationsof the Changcm Wat SupplyCompay (CWSC),while providig an efficient, leastco serice to the people and industryof Changchun. With Increasingwater sarcity and havingto transportwaer over long disancs, improvemn of technologyand efficiencyIs necesy to providea serviceat the lowestcost both in tem of energyand money. 2. Waterloss and energywastage in water supplycomanies is due to a highy complexnumber of fctors. Systemw losses ar often given as the main indicatorof effiency in operaons. However, ner lossesare not onlyassociated with waterlosses but ao with ate design, poor-alty matis and conruction pracdees, and Inapproate oprtg pmcedure for pps, teatmentplan anddistrbn su stt-all of whichresult in higherta neesa energycost For example,poor and lack of a railitation programoften rests in corrosionof watermis cau incrased frtion and reWtingIn higherenergy cost. Theprocess of opersatinga wat supplysystem efficienly start withdesip and is a continousprocess of diligentmanagement of construction,operaons and Moderncomputeized management of adminIsae and commercialopeao is a basicnecessity. Equally,water companiesmust contiuosy plan for the future,to meet th ip osed by the grwth of an industrializedcity such as Changchun,which requireshigh quality utility sevices for its Industrialdevelopment wellas for Is populton. 3. Duringthe recentdecades, as citieshave grwn, manageme and techology of agendciesproviding municipal services have becomemore sophisticate. As a *asult, opeaiona and financialmanagement, and manydiffere technologiesused in watr supply companieshave become specialties In themselves.What used to be a relativelysimple sernie of providingwater now demandswell educatedand tained peoplewith manydifferet and highlyspeciized skills. Thosespecialists should aso be trin sotat theyunderstand and take accountof the costimplications of ther actions. 4. Woddwide,th urbanwater utility sector ffers fromresice to changeand adop of modem _manamentpractices and sat-of-the-a techology. However,with the growingpeeptn of the problemsof watr shoa, water polbion and relatedhealth hazards,tee is a growingreognition of the need for change. The culturalcbhn fm a basicalyrura-*iented operaon hito a modernwater utility for a large idustrial cityi often a difficultundaking. Iherehre, a majorgoal of tis supportpalcage is to achieveatudo - 100- 1i changesof boththe utilitystaff and mmuiipalmanagers. Urban water supply in par ar has suffre fom the Intevenons in the daily opeaons of utilidesby local govenment and politicians,uig water supplyand sewage operationnfor emplome craion and patone deals. Efficient, cost_efetve utility operation cnt condone such practices.

Objetves 5. The main objectiveof this proposedTechnical Assistance (A) is to upgrade th managemet planning,operaton and m tenancecapabilities of CWSCto eonsurit iS opaed in the mostefficent, cost-effectivemanner possible, using consultants speciized in the management,commercial and finacial adminisaon, and operationand mantenanceof waer spply seces. 6. Th followingspecific objecdves are: (a) Trang to) Leadehip Traning. Selecta smal group(3 to 5 people)to workin an overseaslocation to learn advancedmanagement skils. Thetraining would includeproper organizationof a water utility, motivational tecique, financialmanagement, public relations, etc. The traing would last about six months. Tbis task would, in effect, train the magers and trainersof the CWSC. (3) Operator Trainig. Establishjob classificationsand certification program.Provide a trainingprogram so thatwater system opators can advanceto higherlevels of sks and responsibilities. (b) Water Management

io Optimize Water Resources. Develop a program that will optimie the use of wat resources.The program should meter the waterproduction as welltotal customer metering, together with a comprehensiveapproach to reducewater losses and use. (ii) WaterDiribution. Reviewof the presentdistribution faciliies and providea systemoperations and maintenaceprogram, with the purpose to improvethe qualityof the servicesprovision of providinghighquality war (pH contol and particulatematter) at adequatepressures, responsivenessto customersdemands and complaints,distibution systemmaitenane. Developa progrm to increaseawareness of the importnce of efficientwat use, whichincudes water qaity, water distibution materialstandards and m nce practices, pntinus monitoringof water losses and unaccound for water, plumbing standardsfor interiorplumbing and waterefficient equipment, both for industryan domesticuse. Particularattention should be givento the upgradingof the dirict offices,which are the directcontact point wih the customers. -101- ANNEZ 12

(c) Energ Management. Reviewall waterprodueton aiditiesand proposeand guideimplementation of operaionsand manteace stregies thatwil optimize tbe use of the waterresources, minmize the use of energyand reducecost. In partilar the use of highcost produco facilitiesof the Maya-Shtoukoumen Transmisin fcilities shoud be opt4mizedand coolled. Watortreat rlant opeaions shouldbe optimizedand watr quAty (mate meing) ad qualitycontrol (corrosion and pH control)improved. (d) FlnandalManagement and Comme l (Bilng and Collion) Sstem. Review the company's requirements,provide a plan and guide the implementationof this plan, to graually computerizethe company'sfinancial and commercialaccounting systems. This is a particularopportune tim as China is adoptingcommercial accounting systems. The TA should camine the presentChinese system and, taking account of this initiative,prepare a computer systemdesign initially based on desktopcomputers. I shouldprovide a planto computerizefidly within a two yearperied the commercialsystem Opeaonal cost controland stockaccoundng is ancidierpriority Item. (e) Mainteaance System. Develop a computerizedsysem for preventadve maintenance.A routineshould be developedfor cleaningwater lines, servicing pumps,pressure testing, etc. Datawi}l be recordedto determim,down time and to makeimprovements for betterwater service. Exection of the TechnicalAssistance

7. Assistancewould be providedin the form of a smallcore teamwhich would makeperiodic (about six-month intervals) visits. The initWvisit wouldbe abouttwo montis, rng whichthe coreteam would work closely with CWSC management and agreeon an iditi assessmentand set out a flexibleimplementaton plan with ded TORsfor intervins of specialists.These speciaists would have the appropriateexpertise and tensiveexperience to provideoperationa and management advice in theirparticular field of expertise.Progress would be reviewedannually in cooperationwith IDA and the implementationplan wouldbe adapted to changingcircumstances and progress made to date. Thewhole process of TA andinsttutonl changeis esdmatedto take placeover the five-yearproject Implementtion per'od (1993-98), includingthe initialphase of commissioningthe new facilities 8. The managementof CWSChas committeditself to changethe aizational structureof CWSCto a newstructure better adapted to the needsof the future. TheTA would assistin developingthe job descriptionsfor the new institutonalargement. CWSCbas agreedwith IDA on an implementationof the new instituionalarrangements by December31, 1994. 9. It is intendedthat CWSC,including its trainingfacilities, will serveboth as an exampleand as a trainingground for the Northeastof China. Participationof the ChinaWater SupplyAssociadon in the aboveproposed TA is also recommended. -102- ANN1X

10. Th emate minimumlabor equiment for the TA am:.

Labor. manogatbg In China 1sa Offic. Total

23 1 24 Watar E.na.ment 11 1 12 tnrey Managmet S 1 6 Financial mnam.n.nt 17 1 18 v .nt¢nce system 5 1 6

Total 61 66 - 103- EX 12

MANAGEMENTAND O-PF4TIONAL SUPRT FOR CHANGCHUNSEWkAGE COMPANY: DRAFTTERMS OF REFERENCE

ntrodueion 1. A simdlarTechical Assistanceprogram as for the WaterSupply Company willbe neededfor the recentlyfomd Changwn SewerageCompany (CSC), which s a newlycreated compay. Patiar attentonshuld be gien to design,conoucdon and O&Mof sewerap collectn systemsbecas excessiveinfiltrtion result In additonal energycosts at pumpingstatin and at the treamnt plant. The controlof poluto, in paicular domestcand industri poluion, is the principlepurpose of CSC. Wateris scace and is broughtat highcost to Changcu As a result,(a) wateruse is a cntint and Ob) the absorpiv cacity of the its watercourses is very limited. Watet downsteam of Chang8iunis reed by agriculturedurng the cropgrowth peiods ad, therefre, toxic wastedisosa in the publicwaterus dws d be controlledseverely.

2. The purpose of his TA is ta at the end of the project ImdlementationCSC, togetherwidi the Changchun Ptection Bureau(CEPB) will be able to: (a) operatead maintan the Changchunsewage collection and transmissionsystem, (b)opae the nwly conshuctedpdmay treatnt plant and monitorits peformane in viewof the designof the secondaryreaent stage,and (c) togetherwih CEPBset dischargelim, grantdsg permi and effectvelycontrol the waterqualy of the industrialdisrges inothe sewerag system. Objectves

3. The mainobjective of this proposedTechical Assistance(A) I to upgrade the operaon and m_e capabilitiesof the CSC to ensureit is opeaed in the mot efficien, cost-effecilvemamer possible,using consultants specialized in the management, fnanci administtio, and opeation and maitnc of muncipalwastewater management system. 4. Ihe followingspecific objectives are: (a) Industa waste dsdargs, permitsand qualty contol of point disdwggw (i) Deveopa database to identifyall industri discbarges.ITis will identifythe type of idustry, c s of wastedicharge, toxic coi s, etc. -104 - ANE 2

(i) Develop criteria for pretreatmentof wastes prior to discharge into the public seweragesystem. Permits would be issued for discharges.

(iii) Develop a munitoringsystem to randomlysample the dischargesfor compliance.

(iv) Developlaboratory capability to test for industral waste discharge characteristics. Training aministars and laboratorytechnicians is an integralpart. This is a joint venture of CSC and CEPB.

(b) Sewage collectionsystem

(i) A program shouldbe drafted and guidanceprovided on ks implementationto modernizemaineance and rehabilitationof the sewage collectionand transmissionsystem. Particular attention shouldbe paid to groundwaterinfiltration in view of the added expenseof pumping. Modem inspecdon, repair and rehabilitation technologyshould gradually be introduced.

(ii) Develop a programto monitordry and wet weather flows.

(iii) Detailed mappingof the existingsystem is a priority item in view of the large extensionsto be added over the next decade and the necessaryrehabilitation of the sewage system. A graphic information system (GIS) shouldbe developedto map the exising system.

(c) Sewage Treatment Plant. Sewagetreatment plant operationis a sophisticatedprocess, more so than water tement plant operationsbecase of the highly variable flow and qualityof the sewage, which easily upset the bacteriologicalprocesses of a modernsewage treatmentplant.

(Q) Prepare an operationsand mnance (O&M)manual for the plant. Develop an organizationchart, job classifications,and a certification program for the operators.

(Hi) Train a core staff to operate the treatmentplant. Develop an organizationchart, job classifications,and a certificationprogram for the operators.

(iii) Developa monitoringprogram to check the efficiencyof the treatmentprocess. Included would be:

* Influent BOD, suspendedsolids, pH, tempature * Sedimenttank BOD and suspendedsolids removal * Sludgeproduction * Effluent BOD and suspendedsolids, pH * Digester performance -105 - ANNEX 12

(d) Financial management system. Reviewthe company'srequirements, provide a plan and guide the implementationto graduallycomputerize the company's financal system. This Is a particular opportunetime as China is shifting to commercialaccounting systems. The TA should examinethe present Chinesesystem and tacing accountof this shift, prepare a computer systemsdesign initiallybased on desktop computers. Operationalcost control and stock acounting is a priority item.

(e) Personnel management and training. Reviewpresent practices and recommendimprovement of the present system. Particularlyimportant is the provisionof assistancein settingup a training program and design of training facilitiesfor the companystaff which will go hand in hand with the changes resulting from the above-mentionedspecific actions.

Executionof the Techical Assistance

5. The assistancewould be provided in the form of a small core team which would make periodic (about six-monthintervals) visits. The initial visit would be about two months, during which the core team would work closely with CSC managementand agree on an initial assessmentand set out a flexibleimplementation plan with detailed TORs for interventionsby specialists. These specialistswould have the appropriateexpertise and extensiveexperience to provide operationaland managementadvice in their particular field of expertise. Progress would be reviewed annuallyin cooperationwith IDA and the mplementationplan would be adaptedto changing circumstancesand progress made to date. The whole process of TA and change is estimatedto take place over the five-yearproject implementationperiod (1993-98), includingthe initial phase of commissioningthe new facilities

6. The managementof CSC has committeditself to adopt an organizational structure adaptedto the needs of the operations. The TA would developjob descriptionsfor this institutionalarrangement.

7. The estimatedminimum labor requirementsfor the TA are:

Labor.' man-months In China Home Office Total

IndustrialWaste Discharge 5 1 6 Sewage Collection System 5 1 6 Sewage Treatment Plant 3 1 4 FinancialManagement 3 1 4 PersonnelManagement & Training 8 1 9

Total 24 5 29 CHINA CHANGCHUNWATER SUPPLY AND ENVIRONMENTAL PROJECT EconomicRae of Retum Water supply

TOTAL INCREMENTAL INDUSTRY TOTAL TOTAL TOTAL TOTAL COSTS COSTS WATERSOLD WILLINGNESSTO PAY VALUE BENEFIT NET NET NET Year -w- ADDED WATER IENEFIT BENET BENEFIT Const. Land/ Op.& Resident Inetn Resident Iinslt BENEFIT WATE SEWERAGEPROJECT Resetmt Maint. Comnerm. Commetc. (mHiionyuan) (Tmilioncu.m.) (milUionyuan) (milln N)

1993 136.60 39.40 175.00 -17.00 -16.30 -191.30 1994 444.80 444.80 -444.80 -61.40 -60620 1996 318.80 318.80 -318.80 -6.80 -377.I0 im 8.800 86.8 -6.80 -72.70 -158.60 A 1997 1.11 1.11 49.28 23.3 19.71 18.69 138.76 176.15 174.04 63.76 237.70 1993 1.11 1.11 27.3 34.31 10.6 27A6 130.76 176.16 174.04 63.75 287.79 1909 1.11 1.11 27.38 34.31 10.95 27.46 138.76 176.16 174.04 68.76 287.79 2000 1.11 1.11 27.38 34.31 10.96 27.46 136.75 176.16 174.04 63.5 237.79 2001 1.11 1.11 27.38 34.31 1o0s. 27.46 136.75 175.16 174.04 63.75 287.79 2002 1.11 1.11 27.38 4.31 1O.9S 27.46 138.76 176.16 174.04 63.75 237.79 2003 1.11 1.11 27.38 34.31 1O.0S 27.46 136.75 176.16 174.04 63.76 287.70 2004 1.11 1.11 27.38 34.31 10.06 .46 136.76 176.16 174.04 63.75 287.70 200 1.11 1.11 27.38 34.31 10.06 27.46 1t8.75 175.15 174.04 6876 287.70 2006 1.11 1.11 273s 34.1 10.s 27.46 136.75 176.15 174.04 676 237.70 2007 1.11 1.11 27.38 34.31 1 2O7S.A6 136.75 175.16 174.04 68.76 287.79 2008 1.11 1.11 2738 34.1 16S 27.46 136.76 176.16 174.04 6376 287.70 2009 1.11 1.11 27.3 34.31 10.96 27.46 138.75 176.15 174.04 6L.7 2S7.79 2010 1.11 1.11 27.8 34.31 10.t6 27.46 136.75 176.16 174.04 6375 287.7s 2011 1.11 1.11 27.38 431 106S 97.46 130.765 17.16 114.04 6&7S 2a7.79 .. . E~~~~~~~~1111% 226% 13.3 CHINA CHANCCHUNWATER SUPPLY nd ENVRONMETAL PROJECT Eoonoc Rateof Retunmad MarginalCost Waswaer Treatment(rs as of '

CoSrs TOTAL INCREMENTAL BENtEFrT TOTAL TOTAL ------COSTS SERVCESSOLD ------BENEFITNEr Year Const Landl Op.8 ------Resident Industryl BENEFIT ReseImt Maint Resident Industry/ RevenuesOther Other Revenues (millionyuan) (millioncu.m.) (millionyuan) (millionyuan)

1993 1.60 14.70 16.30 -16.30 1994 61.40 61.40 -61.40 1995 58.30 58.30 -58.30 1996 72.70 72.70 -72.70 1997 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 1998 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 1999 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2000 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 20G1 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2002 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2003 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2004 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2005 1.90 1.90 90.44 77.04 27.13 3852 65.65 63.75 2006 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2007 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2008 1.90 1.90 90.44 77.04 27.13 38.52 865.5 63.75 2009 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75 2010 1.90 1.90 90.44 77.04 27.13 3852 65.65 63.75 2011 1.90 1.90 90.44 77.04 27.13 38.52 65.65 63.75

22.8% -108 - ANNEX 14

SELECTED DOCUIENTS AND DATA AVAILABLEIN TMEPROJECT FILE

1. FeasibilityStudy of the ChangchunWater SupplyProject for Drawing Water Drawing Water from River Songhuainto Chargchun, by China NortheastMunicipal Engineering Design Institute and the Jilin Water Conservancy Surveying Design institte, Changchun,February 1989.

2. Water Supplyand WastewaterManagement Feasibility Study, City of Changchut (seven volumes),by UMA Consultants,Calgary, Canada, November 1991.

3. Translationof "Approvalof ChangchunWater Supplyand EnvironmentProject" (First Stage) Feasibility Study, State Planning Commission,Doc. No. (1192)584, May 11, 1992.

4. Summary in English of 'Approval of Feasibility Study Report of Changchun Water SupplyProject," Ministryof Water Resources,Doc. No. 1991-61,December 13, 1991.

5. Summaryin Englishof "Approvalof FeasibilityStudy of ChangchunWater Supplyand EnvironmentalProject," Ministry of Construction,Doc. No. 1992, 1992, April 22, 1992.

6. Summary in English of "Approvalof EnvironmentalImpact Statement of Changchun Water SupplyProject" by State EnvironmentProtection Bureau, Doc. No. 1991-280, August 5, 1991.

7. Summaryin English of "LocationSelection and PreliminaryFeasibility Study Reporton Industrial Hazardous Waste Disposal" by Urban Research Institute of Changchun, October 7, 1991.

8. Summary in English of "Relocation Plan for Industries Generating Pollution* by ChangchunPlanning Design Institute,September 27, 1991.

9. Summaryin English of"Measuresfor improvementof WastewaterTreatment Plant in No. 1 Auto Factory," February 22, 1992.

10. List of documentsabout water conservation.

11. Preliminary Approval of Land AcquisitionPlan, by ConstructionLand Department, Land ManagementBureau of Jilin Province. -109- ANEX 14

12. EngineeringReport on Raw WaterTransmission Line (VolumesI & II) (the two-volume report, in both Chinese and English, was prepared by Jilin Water Resource & HydroelectricSurvey & Design Institute).

13. Calculationsof ?umping Stations of Raw Water TransmissionLine (Appendix 1) (the eight-page Appendix 1, in English, was prepared by Jilin Water Resource & HydroelectricSurvey & Design Institute).

14. Preliminaryflesign Engineerig Report on ChangchunUrban Water Supply. (the report was prepared by China NortheastEngineering Design Institute and is in English).

15. Preliminary Design Engineering Report of Proposed Primary Wastewater Treatment Plant at the Northern Suburb (the report was prepared by China Northeast Engineering Design Institute and is in both English and Chinese).

16. Preliminary Design EngineeringReport of Proposed SewageInterceptor in Changchun (The report was prepared by ChangchunSurvey & Research Institate and it is in bo&t English and Chinese). MAPSECTION

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