Taiyuan-Zhongwei Railway Project

Home , Baotou, Baotou railway station, Jinfeng District, Linfen, Lishi District, Xiaodian District

Social Monitoring Report

Annual Report March 2011

Prepared by Research Institute of Foreign Capital Introduction and Utilization, Southwest Jiaotong University for the Ministry of Railways and the Asian Development Bank.

This social monitoring report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Asian Development Bank Loan Taiyuan-Zhongwei-Yinchuan Railway Construction Project

External Monitoring Report on Social Development Action Plan

Phase IV

The Research Institute of Foreign Capital Introduction and Utilization, Southwest Jiaotong University (RIFCIU-SWJTU)

March 2011 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

Table of Contents

1 SUMMARY OF MONITORING AND EVALUATION...... 4

1.1 SMOOTH GOING OF PROJECT CONSTRUCTION PROGRESS...... 4 1.2 GENERAL COMPLETION OF RESETTLEMENT...... 4 1.3 PRELIMINARY EMERGENCE OF SOCIAL DEVELOPMENT BENEFITS ALONG THE LINE...... 4 1.4 PARTICULARLY REMARKABLE SAFETY ACHIEVEMENTS...... 5 1.5 BOOSTING POVERTY REDUCTION MEASURES IN THE REGIONS ALONG THE LINE...... 5 1.6 ACCELERATING DEVELOPMENT OF THE LOCAL WOMEN...... 5 2 PROJECT CONSTRUCTION AND SOCIAL DEVELOPMENT...... 6

2.1 SOCIAL DEVELOPMENT MONITORING INDEXES...... 6 2.2 CONSTRUCTION PROGRESS OF THE PROJECT...... 7 2.3 OVERVIEW OF MICRO BENEFITS...... 7 2.4 PROGRESS OF RESETTLEMENT...... 7 2.5 CONSTRUCTION IMPACTS AND BENEFITS FOR LOCAL SOCIAL AND ECONOMIC DEVELOPMENT...... 8 2.5.1 Accelerating development of related industries...... 8 2.5.2 Providing employment opportunities...... 13 2.5.3 Purchasing local construction materials...... 14 2.6 IMPROVING LOCAL SCHOOL CONDITIONS...... 14 3 CONSTRUCTION SAFETY MANAGEMENT AND WORKERS’ HEALTH MAINTENANCE...... 16

3.1 CONSTRUCTION SAFETY SYSTEMS AND IMPLEMENTATION...... 16 3.2 PROTECTION OF WORKERS’ RIGHTS...... 17 3.3 HEALTH PROTECTION...... 17 4 PROJECT CONSTRUCTION AND POVERTY IMPACT...... 18

4.1 POVERTY ALLEVIATION MEASURES IMPLEMENTED BY THE LOCAL GOVERNMENT IN THE PROJECT AREA.. 19 4.2 IMPACTS OF TAIYUAN-ZHONGWEI-YINCHUAN RAILWAY CONSTRUCTION ON POVERTY ALLEVIATION...... 20 4.2.1 Direct impacts of compensation for land acquisition and demolition for railway construction...... 20 4.2.2 Income increase of poor families...... 20 4.2.3 Impacts of the railway construction on thoughts & ideas of the people in poverty...... 21 5 PROJECT CONSTRUCTION AND WOMEN’S DEVELOPMENT...... 23

5.1 EVALUATION METHODS...... 23 5.2 SOCIAL SIGNIFICANCE OF CONCERNS ON WOMEN’S DEVELOPMENT...... 23 5.3 STATUS OF WOMEN’S DEVELOPMENT IN PROJECT-AFFECTED AREAS...... 23 6 CONCLUSION AND PROBLEMS...... 25

2 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

Preface The new railway from Taiyuan to Zhongwei to Yinchuan (hereinafter referred to as Taiyuan-Zhongwei-Yinchuan Railway) runs across the southwest of Shanxi Province, north of Shaanxi Province and north central of Ningxia Hui Autonomous Region. The Railway is designed as Grade I, starts from Taiyuan South Railway Station in the east and extends to Yingshuiqiao Station and Yinchuan Station along the Baotou–Lanzhou Railway in the west, with a designed full length of 942.206km, planned total investment of 32.1 billion yuan and design speed of 160km/h for passenger trains (conditions for 200km/h reserved), of which Yuci-Dingbian is designed as double-track electrified railway, while Dingbian-Zhongwei and Dingbian-Yinchuan are designed as single-track electrified railway (conditions for double-track reserved). Moreover, the double-track section is automatic blocking and single-track section is semi-automatic blocking, and the design transport capacity can bear 40 pairs/day passenger trains and 60 million ton/a freight trains for a long term. The Railway is commenced on Feb. 24, 2006 and planned to complete in Aug. 2008, with a construction period of 54 months. The main work quantities: subgrade earthwork: 101.73 million m3 (including 25.78 million m3 in stations and yards); super major, major and medium bridges: 178,001 linear meter in total; small bridge and culvert: 51,819 horizontal linear meter; tunnel: 180,025 linear meter; main line rail laying: 1,460km; station track rail laying: 212km; turnout: 800 groups; house: 160,000m2; communication optical and electric cables: 2,857 pcs.km; HV overhead line: 853km; HV cable: 1038km; OCS: 2,257 pcs.km. Research Institute of Foreign Capital Introduction and Utilization, Southwest Jiaotong University (RIFCIU-SWJTU) accepts the commission of Asian Development Bank (ADB) and Foreign Capital and Technical Import Center of the Ministry of Railways (MOR), to conduct external monitoring of impacts on the social development of the areas long the Taiyuan-Zhongwei-Yinchuan Railway, which is funded by ADB loan. In Dec. 2010, the RIFCIU-SWJTU establishes the external social development monitoring, evaluation and investigation groups to conduct local investigation and evaluation along the whole line of the Taiyuan-Zhongwei-Yinchuan Railway Project. During investigation, the related local government departments of provinces, cities and counties/districts along the line, Taizhongyin Railway Co., Ltd. and contractors involved in railway construction works have provided information and data, which is critical for the external monitoring organization to finish monitoring, investigation and evaluation of Taiyuan-Zhongwei-Yinchuan Railway Project. We hereby present our sincere thanks to these organizations for their great support and assistance.

The Research Institute of Foreign Capital Introduction and Utilization, Southwest Jiaotong University (RIFCIU-SWJTU) March 2011

3 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV) 1 Summary of Monitoring and Evaluation 1.1 Smooth going of project construction progress 1. The new railway from Taiyuan to Zhongwei to Yinchuan (hereinafter referred to as Taiyuan-Zhongwei-Yinchuan Railway) is 942km long in total with a planned total investment of 32.1 billion yuan. The main line is from Taiyuan South Railway Station to Yingshuiqiao Marshalling Station of Baotou-Lanzhou Railway. The origin of connecting line to Yinchuan is the center of Dingbian Station and the terminal is Yinchuan Station of Baotou-Lanzhou Line.The east section is from Yuci District in Shanxi Province to Dingbian County in Shaanxi Province, which is designed as double-track electrified railway; the west section is from Dingbian County in Shaanxi Province to both Zhongwei and Yinchuan in Ningxia Hui Autonomous Region, which is designed as single-track electrified railway (conditions for double-track reserved). 2. Till Dec. 2010, the Project has been completed generally and is under commissioning, and the station building is under construction. It is planned to be put into trail run on Jan. 11, 2011 and into formal operation during the Spring Festival period. 1.2 General completion of resettlement 3. Within the two provinces and Ningxia Hui Autonomous Region affected, 63,219 mu land is acquired and 36,482 people are affected in total, of which 14,578 mu land is acquired in Sha nxi, which affects 13,252 people; 24,269 mu land is acquired in Shaanxi, which affects 13,482 people; 24,372 mu land is acquired in Ningxia Hui Autonomous Region, which affects 9,748 people. Till Nov. 2010, 930,618m2 houses are demolished, which affects 7,447 households and 37,220 people. Specifically speaking, 304,901m2 houses are demolished in Shanxi, which affects 3,060 households and 15,003 people; 489,128m2 houses are demolished in Shaanxi, which affects 4,019 households and 20,556 people; 136,589 m2 houses are demolished in Ningxia Hui Autonomous Region, which affects 368 households and 1,661 people. Altogether 159 enterprises, institutions, schools and other large houses along the line are demolished – 76 in Shanxi Province, 28 in Shaanxi Province and 55 in Ningxia Hui Autonomous Region.95% of resettlement work has been completed, while the remaining work related to the houses constructed uniformly has not been completed yet. The governments at all levels in the two provinces and Ningxia Hui Autonomous Region pay much attention to dislocated persons’ right guarantee work such as land acquisition, demolition, resettlement and employment, to ensure that personal interests of the affected people, in particular to the vulnerable groups, are guaranteed sufficiently. Women's basic rights, social positions, social images and thoughts & ideas are improved greatly. Compensation fees for land acquisition and house demolition are generally appropriated. Living conditions and levels of the dislocated persons as well as rural infrastructures are generally improved too. Many infrastructures such as roads, water conservancy facilities, power lines and communication facilities along the line affected by project construction are restored. Various complaints from community residents due to land acquisition and house demolition and construction are highlighted by the settlement department, and problems related to marginal land, construction noise, reclamation of land temporarily occupied, road traffic, etc. are solved gradually. Direct impacts on production and living of various vulnerable groups due to land acquisition and house demolition are paid attention to, and rebuilding of their lives are supported by the resettlement department with the aid of local communities. 1.3 Preliminary emergence of social development benefits along the line 4. Construction of Taiyuan-Zhongwei-Yinchuan Railway makes the local social

4 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

economy change positively. The railway construction will improve the traffic environment along the line, bring positive impacts on development of the local social economy, accelerate development of the local industry with resources advantages, help absorbing foreign investments, activate the local economic factors and create more employment opportunities. All counties/districts has begun to adjust the local social and economic planning, including planning the railway station square economy and the surrounding development zones and making plans for social and economic development accelerated by railway. 5. Construction of Taiyuan-Zhongwei-Yinchuan Railway Project has come to the end of the fifth year, through huge investment, procurement of construction materials and personal consumption of thousands of construction personnel, development of the regional social economy has been stimulated greatly, and technology, education, economy, culture and travel levels and modern ideas along the line have been promoted rapidly. Therefore, it can be expected that upon completion, the Project will bring immeasurable positive impacts for linking the Central and the West and accelerating comprehensive improvement of social development levels of the two provinces and Ningxia Hui Autonomous Region. 1.4 Particularly remarkable safety achievements 6. The construction companies pay much attention to labor management, through improving their living and working conditions and taking effective measures from aspects such as living, messing, health, labor protection and physical and psychological health, ensure that no serious casualties, group communicable diseases or food poisoning accidents happen, thus controlling the morbidity of venereal disease and AIDS at zero. 1.5 Boosting poverty reduction measures in the regions along the line 7. The Project is undoubtedly beneficial for alleviating poverty and improving income levels of the local poor residents. In addition to sufficient compensation fees gained from land acquisition and house demolition and proper resettlement, the assistance effects also present in the household income increased from various ways such as getting the employment opportunities on the railway construction site, offering qualified construction materials to the railway construction organization or providing the railway construction workers with consumption services. 1.6 Accelerating development of the local women 8. Taiyuan-Zhongwei-Yinchuan Railway Construction Project has accelerated gender equity development in regions along the line and has formed a good change trend. During the railway construction, the affected women are equally treated from aspects such as compensation for land acquisition and house demolition and resettlement, some women-dominated families and poor families are even particularly cared by the resettlement department from various ways. Since the railway project has been commenced, women along the line have showed good change trends from aspects such as thoughts & ideas, social positions and family positions, under the guidance of local government and the Women's Federation, more women have made certain growth in cultural quality and income level via participating in market economy and gaining related experience, thus further improving women’s social positions. Although the said changes are not completely resulted from construction of the Project, construction of the railway project will certainly bring great impacts on local women.

5 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV) 2 Project Construction and Social Development 2.1 Social development monitoring indexes 9. Monitoring and evaluation of impacts on social development brought by the Project is based on Loan Agreement of Taiyuan-Zhongwei-Yinchuan Railway Project concluded by MOF and MOR of the People's Republic of China and ADB as well as the frameworks related to Social Development Action Plan, the Plan proposes the following measures to be taken and supervised: · Create employment opportunities during railway construction; · Purchase local materials during railway construction; · Provide employment opportunities during railway operation; · Control AIDS/venereal disease and human trafficking; · Restore income of the people affected by resettlement, in particular to the vulnerable groups; · Ensure railway construction safety; · Prevent from disturbing residents and damaging during construction and operation; · Keep the sustainability to overcome poverty of families; · Develop tourism especially to help poor people, women, minorities and other vulnerable groups; 10. Located in North of China, Taiyuan-Zhongwei-Yinchuan Railway is another important east-west major trunk for railway transportation, which will undoubtedly bring macro social and economic benefits, but its negative impacts on communities along the line and the affected people should be paid high attention to and relieved or eliminated via taking measures accordingly, thus making the railway construction become the opportunities for the poor people and the people in undeveloped regions along the line to improve their living levels. Particularly during the railway construction process, integrate how to guide the related departments to realize this social target into important project management contents. In order to know the actual social and economic impacts and possible comprehensive social and economic impacts brought by the railway construction, the external monitoring and evaluation organization for social development action plan on the Project takes investigation and analysis on multidimensional information data index for monitoring and evaluation. During the monitoring and evaluation, the following monitoring indexes are used: · Labor employment structure during construction; · Supply structure of local construction materials in the materials necessary for railway construction; · Local impacts brought by production and personal consumption of construction teams; · Adjustment of local social development plans made by local governments based on the expected traffic improvements brought by the Railway; · Improvement of local infrastructures along the line; · Improvement of living conditions for local residents along the line;

6 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

· Alleviation of poor situation and income increase of poor families along the line; · Changes in thoughts and ideas of local people. 11. During the external monitoring and evaluation of social development action plan, the monitoring and investigation workers gain related data and information necessary to use as the basis for monitoring and evaluation at this phase via methods such as interviewing workers of land acquisition, demolition and resettlement organizations, leaders of the affected communities and the affected people, consulting with the construction contractors and supervisors involved in the railway construction and observing the social and economic conditions of the communities interviewed. 2.2 Construction progress of the Project 12. The new railway from Taiyuan to Zhongwei to Yinchuan (hereinafter referred to as Taiyuan-Zhongwei-Yinchuan Railway) is 942km long in total with a planned total investment of 32.1 billion yuan. The main line is from Taiyuan South Railway Station to Yingshuiqiao Marshalling Station of Baotou-Lanzhou Railway. The origin of connecting line to Yinchuan is the center of Dingbian Station and the terminal is Yinchuan Station of Baotou-Lanzhou Line. The east section is from Yuci District in Shanxi Province to Dingbian County in Shaanxi Province, which is designed as double-track electrified railway; the west section is from Dingbian County in Shaanxi Province to both Zhongwei and Yinchuan in Ningxia Hui Autonomous Region, which is designed as single-track electrified railway (conditions for double-track reserved). 13. Till Dec. 2010, the Project has been completed generally and is under commissioning, and the station building is under construction. It is planned to be put into trail run on Jan. 11, 2011 and into formal operation during the Spring Festival period. 2.3 Overview of micro benefits 14. Just as described in the External Monitoring and Evaluation Report on Social Development Action Plan of Phase III, the Project is constructed as the national and provincial important project. As another most convenient golden channel to the East located in North of China, the Railway is a hopeful way to achieve the strategic objectives of China's Western Development, complete layout of the railway network, accelerate mineral resources development of Shanxi, Shaanxi and Ningxia Hui Autonomous Region, expedite the poverty overcoming and prosperity achieving speed of poor regions, boost realization of economic take-off and other targets. 15. In the medium and long term railway network plans of China, around the New Asia-Europe Land Bridge which is formed by Lanzhou-Lianyungang Railway and Lanzhou−Xinjiang Railway (two trunk lines) extending westwards outside the border, the new Taiyuan-Zhongwei-Yinchuan Railway is like a ribbon tightly linking East, Central, North and Northwest of China, and greatly expands the attraction area and radiation area of the Land Bridge. After going across Shanxi Lvliang Region, the Yellow River, Shenmu-Yan'an Railway, Erdos platform and south edge of Maowusu Desert, the Railway enters Ningxia (Frontier Jiangnan) to form an integral part of “multi-terminal transverse land bridge” described in the railway network plans of China. 2.4 Progress of resettlement 16. The major impacts of the Project are sourced from land occupation and house demolition during construction. This report provided by the external monitoring organization details the people affected by land occupation and house demolition during construction till now. Within the two provinces and Ningxia Hui Autonomous

7 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

Region affected, 63,219 mu land is acquired and 36,482 people are affected in total, of which 14,578 mu land is acquired in Shanxi, which affects 13,252 people; 24,269 mu land is acquired in Shaanxi, which affects 13,482 people; 24,372 mu land is acquired in Ningxia Hui Autonomous Region, which affects 9,748 people. Till Nov. 2010, 930,618m2 houses are demolished, which affects 7,447 households and 37,220 people. Specifically speaking, 304,901m2 houses are demolished in Shanxi, which affects 3,060 households and 15,003 people; 489,128m2 houses are demolished in Shaanxi, which affects 4,019 households and 20,556 people; 136,589 m2 houses are demolished in Ningxia Hui Autonomous Region, which affects 368 households and 1,661 people. Altogether 159 enterprises, institutions, schools and other large houses along the line are demolished – 76 in Shanxi Province, 28 in Shaanxi Province and 55 in Ningxia Hui Autonomous Region. The land acquisition and house demolition has affected the production and life of residents living in 22 counties/districts, 88 townships and at least 351 villages and communities in the three provinces along the line. 17. As for the great impacts on production and life of the residents along the line due to land acquisition & house demolition and railway construction, the Employer and the local governmental resettlement departments has paid high attention to the Project, and arranged the affected people properly by means of thoughtful preparations and resettlement from aspects such as policy, organization, compensation & resettlement fees and management procedures. Till now, the total fees for resettlement are 2.984 billion yuan. During resettlement, as for the farmers with land acquired in Shanxi, fees of 5 times the standard production value of the acquired land are appropriated additionally for the people directly affected to purchase social insurance. Along the line, there are at least 34 centralized resettlement sites are specially funded for construction, so as to properly arrange the affected people due to house demolition and ensure their house rebuilding. Many infrastructures such as roads, water conservancy facilities, power lines and communication facilities along the line affected by project construction are restored. Various complaints from community residents due to land acquisition and house demolition and construction are highlighted by the settlement department, and problems related to marginal land, construction noise, reclamation of land temporarily occupied, road traffic, etc. are solved gradually. Direct impacts on production and living of various vulnerable groups due to land acquisition and house demolition are paid attention to, and rebuilding of their lives are supported by the resettlement department with the aid of local communities. Generally speaking, although the life restoration is in progress, it can be confirmed that living conditions of most affected people will be greatly improved. 2.5 Construction impacts and benefits for local social and economic development 2.5.1 Accelerating development of related industries 18. Based on the good expectations of possible economic and social benefits brought by the Railway, the resettlement departments along the line have prepared economic development plans adaptable to the future traffic conditions improved by the Railway, so as to promote the local social and economic development. According to the real conditions of regions along the line investigated by the external monitoring organization, although there are conflicts among interested parties involved in railway construction, the good social and economic change trends due to railway construction are approaching. 19. Both Jiang Xianzhi of Land Acquisition and House Demolition Department of Taizhongyin Railway Co., Ltd. and Bi Junming (General Manager) of Shanxi Real

8 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

Estate Company have talked about the following facts: 1) Due to construction of the Taiyuan-Zhongwei-Yinchuan Railway, in order to make full use of the abundant coals and other mineral resources distributed in counties/districts along the line within Shanxi Province, the system of strategic loading points funded by private companies is forming. Under the guidance of local governments, invested by local competent mineral developers and supported by the Taiyuan-Zhongwei-Yinchuan Railway Project Design Organization and local land management departments, the freight yard and transportation & storage facilities in railway station are constructed simultaneously with the passenger transport facilities, thus providing guarantees for railway transportation of mineral resources distributed in counties/districts along the line. 2) The counties/districts along the line are preparing zoning plans on traffic link, hotel service facilities and other urban development strategies around the railway station. To certain extent, the railway station will profoundly affect urban development strategies of the third and fourth cities along the line. For example, the railway stations in Jinzhong City and Lishi District have formed the development planning around the railway station. 3) According to the new resettlement plan, most households affected by house demolition in some regions are relocated from the original one-storey house to the specially built quarter composed of storied houses and become residents of big communities, which will impact their living modes greatly. For example, there are many demolished households in Liulin County and Lishi District of Lvliang City, so those affected households form big communities by the centralized resettlement method. 20. Zhang Zhiping (Deputy Director of Development and Reform Bureau of Yuci District, Jinzhong City) regards that construction of Taiyuan-Zhongwei-Yinchuan Railway brings social and economic effects from two aspects, namely, the noises generated from construction affect the life of residents around, while the positive impacts are predominant. The local governments of Jinzhong City are evaluating the possible value of Taiyuan-Zhongwei-Yinchuan Railway upon completion, and making the following strategic development plans: firstly, because Hongmaying Station and Yard in Yuci District borders high schools of Taiyuan City to the west, industrial park of Taiyuan City to the south and urban area of Yuci District to the east, with such an important geographical location, there will be a great potential to develop logistics. Based on the Hongmaying Station and Yard, the local government plans to build a Container Logistics Park to develop bulk and container logistics business. Secondly, the greatest impact on the local urban development is to expedite implementation of the westward development plan of Yuci District, and finally facilitate integration of Yuci District and Taiyuan City. 21. Wang Jianjun (Director of Development and Reform Bureau of Xiaodian District, Taiyuan City) regards that although the Taiyuan-Zhongwei-Yinchuan Railway brings considerable micro social and economic benefits, the positive and negative impacts on Xiaodian Section are balanced. On one hand, because the Xiaodian Section is not designed with viaduct in full length, the Taiyuan-Zhongwei-Yinchuan Railway actually cuts off the overall concept of Taiyuan City for development southwards. In July 2008, the final execution plan on this section is semi-viaduct and semi-subgrade railway, of which 65% mileage is designed as subgrade. Therefore, we hope that the Railway will be designed as full-length viaduct in Xiaodian Section, and moreover, if Taiyuan City is desired to expand development, there will be no land to be used

9 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

except for Xiaodian District. In 2003, the Government of Taiyuan City has finalized the overall urban development concept – southward development. As the strategic implementation, 70km is planned for Taiyuan City, and North of Liangjiazhuang Village in Xiaodian District is integrated into the urban planning of Taiyuan City. However, because Taiyuan-Changzhi Highway and Taiyuan-Zhongwei-Yinchuan Railway cut off the land, the former overall planning is broken.If it is built as viaduct as per the original plan, the impacts will be minor, but now the construction with subgrade will bring great impacts. On the other hand, the railway station for Taiyuan-Zhongwei-Yinchuan Railway built in Xiaodian District will be beneficial for its development. At present, the railway station is arranged in Beige Town of Xiaodian District, which will stimulate the regional economic development. The reason is that Beige Town is the logistics distributing center for surrounding areas historically, in which coke, pig iron, agricultural and sideline products, vegetables and other materials are gathered and then transported outside, thus making National Highway 208 (G208) damaged frequently due to heavy load. The railway station can further help Beige Town to function sufficiently as the logistics distributing center, so the Government of Xiaodian District plans to utilize this advantage to develop Beige Town as the logistics center for commercial service industry and the environmental-friendly logistics base for the tertiary industry. During investigation of Beige Town, the external monitoring and evaluation organization has proved the above opinions from Wei Zhigang (Chief of Beige Town, Tel.: 13753153168).Although Beige Town is dependent on agriculture, the railway station established will accelerate the realization of strategic development objectives for small cities and towns such as developing logistics, warehousing and transportation and other tertiary industries. 22. Liang Tinghua (Director of Coordination Office for Taiyuan-Zhongwei-Yinchuan Railway Construction in Fenyang City) regards that Lvliang City and Fenyang City are the origin place of Fen Wine (one kind of famous wine manufactured in North China), and the local coal & coke industry is developed. Coals are processed into cokes and other chemical products and exported, which accounts for 40% of the local financial tax revenue. Since 2002, the coal & coke industrial park has been constructed in Sanquan Town of Fenyang City, 3 million ton of cokes are produced annually and transported to Tianjin Port for export by truck. Now, the Taiyuan-Zhongwei-Yinchuan Railway goes across Fenyang City, which will mainly bring the following four impacts: firstly, the cost for transporting cokes by rail is approximately half by truck, and pressure on highway brought by truck, potential safety hazard and environmental pollution can be reduced. In addition, it can provide space for expansion and long-term development of the industrial park, stimulate the local economic growth and create more employment opportunities for the local poor people indirectly. Secondly, the local investors are establishing strategic loading points, via building the station freight yard into coal & coke wholesale base and oil product warehouse, in which oils from Shaanxi and other province can be gathered and then distributed to Pingyao, Zhongyang, Wenshui and other places around. Thirdly, Fen Wine (one kind of traditional famous wine) is produced in Xinghuacun Town, so under the guidance of Government of Fenyang City, the industrial structure of this town is planed again taking the new railway and wine culture into consideration, thus establishing an industrial tourist area. For this reason, the square around the railway station in Xinghuacun Town and the access road are under planning, and the station area is increased from 1,831m2 to 500m2. Fourthly, the local residents traveled mainly by bus before, but now they can travel via the local railway station, which provides much more convenience.

10 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

23. Wen Aiti (working in the governmental department of Lishi District, Tel.: 13935823898) introduces the adjustment of local urban development and social & economic development plans due to construction of the new railway: 1) The railway station in Lvliang City occupies over 300mu land, and planning of the square before station has been completed. The square is planned with 2,500 m2 originally, and then expanded to 8,000m2 financed by the local governments of Lvliang City. 2) On the basis of the above railway station, the governments of Lishi District and Lvliang City have planned 2 freight yards as the local strategic loading points, of which one is invested with 630 million yuan by the government, with transportation capacity of 8-20 million ton/a, and mainly used for supporting export of coking coals, washed coals and cleaned coals produced by Lvliang Industrial Park and other parks; the other one is invested with 320 million yuan, with transportation capacity of 5-15 million ton/a, and mainly for attracting export of bulk coking coals from local and adjacent areas except for Lvliang Industrial Park.At present, the above two freight yards are under planning, and have not been constructed yet, but they are integrated into “the twelfth five-year plan” of Lvliang City. 3) Due to the key transportation network of Taiyuan-Zhongwei-Yinchuan Railway, the Government of Lvliang City decides to invest for constructing the local railway branch within Lvliang City – Lvliang-Linfen Branch, which will link the Taiyuan-Zhongwei-Yinchuan Railway, thus realizing large-scale coal transportation and stimulate coal and other mineral resources development within this region.The above two strategic loading points (freight yards) will also be constructed together with the Lvliang-Linfen Branch. 4) The railway station in Lvliang City will be constructed to relieve the local traffic pressure and reduce transportation cost. According to calculations, the road transportation cost is 0.76 yuan/ton/km (2007), while the railway transportation cost is only 0.29 yuan/ton/km. 5). Unlike road transportation, the railway transportation is not limited under unfavorable weather conditions such as ice and snow, so it is more convenient for traveling. 6) In Lvliang City, centralized resettlement (7 sites) of most local people affected by house demolition is carried out, and the resettlement department will construct commercial stores for the land-lost farmers in the resettlement area to keep sustainability of their income increase. 24. Mu Guisheng (Director of Development and Reform Bureau of Liulin County, Tel.: 13803488623) regards that: 1) Liulin County is abundant in resources. There are many high-quality coals (coking coal production capacity: 20 million ton), bauxite, limestone and agriculture & animal husbandry products (red date is the special local product).Those resources will be exported directly or after being processed into semi-product. Although there is highway, the transportation requirements can not be satisfied. The Taiyuan-Zhongwei-Yinchuan Railway will be constructed to relieve the pressure of highway and improve transportation capacity and speed.On the basis of the above expectations, development of those industries is expedited greatly. 2) Regarding to the railway station, the Government of Liulin County has planned to invest 1.5 billion yuan for constructing 5 million ton of strategic loading points. At present, the loading point is at design stage, and planned to be commenced in 2012.In addition, the access road, the square before station, the hotels and areas around the railway station are integrated into the planning area. It is planned to construct the railway station into the new transport terminal for Liulin County. 3) The Government of Liulin County has adjusted the economic development plans based on the railway construction, including: A. Due to the more convenient traffic, the biggest cement plant within Shanxi Province is under construction, of which the production capacity is 10,000 ton/day. B. Aluminum is processed by using the local abundant bauxite resources.

11 External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

25. During railway construction, via providing employment opportunities to the poor people and purchasing living goods and construction materials from them, their poverty is alleviated to some extent. Zhang Yibo (Deputy Chief of Liangtian Town, Jinfeng District, Yinchuan City, Ningxia Hui Autonomous Region) explains the impacts on local society and economy brought by the new railway: in Liangtian Town there are 1,200 poverty-stricken families, of which about 900 households have access to the rural minimum social security. As for those poor people, with the aid of the rural minimum social security, the Government of Liangtian Town generally takes anti-poverty measures like poverty alleviation and twining & helping of the Project. Although the three villages in Liangtian Town crossed by the new railway are at a middle living level, construction of the new railway has alleviated living conditions of the poor families in those villages to some extent mainly from the following aspects: 1) In the recent three years, more than 100 agricultural vehicles have been newly increased in this town to transport materials for the new railway, thus bringing additional income for the relevant farmers; 2) Some local labors are employed for the railway construction, bringing additional income for the relevant farmers; 3) The workers and management persons of railway construction organizations buy living goods, especially vegetables and meats, from the local villagers, thus bringing additional income for the relevant villagers. 26. Although a great deal of land is acquired along the line due to railway construction, which will inevitably cause impacts on production and living of residents in local communities especially the rural communities, the negative social impacts have been mitigated via close coordination among Taizhongyin Railway Co., Ltd. and resettlement departments along the line and the promise of earnestly fulfilling the Resettlement Action Plan (RAP) and changing negative social impacts into positive social impacts through various ways, so the railway construction has gained supports from governments at all levels and the affected people in regions along the line. The external monitoring and evaluation organization will details in the Monitoring Report on Social Development Action Plan, and this report only provides brief description. 27. According to summary and analysis on investigations conducted by external monitoring and evaluation group along the line, tendency of positive impacts in two aspects along the line has been formed, which will bring about favorable social impacts on communities along the line. Firstly, Taizhongyin Railway Co., Ltd. requires that construction companies involved in railway construction, while finalizing the plans on infrastructures such as access roads and temporary bridges necessary for construction and power lines and water supply pipelines, shall negotiate with the communities in local counties/districts and villages/towns to strive for favorable external construction conditions and construction environment. At the end of construction, especially in the west section of Ningxia Hui Autonomous Region and other sections with construction progress at slightly fast speed, the local communities not only require the construction organization to reclaim the land temporarily occupied to the original service conditions as per the related specifications, but also negotiate with the construction organization to reserve temporary access roads and temporary bridges which may be in favor of the future development, so as to reduce investment on infrastructures for local community development. Meanwhile, partial temporary houses and corresponding water supply pipes and power supply circuits used during construction are reserved. As a matter of fact, the aforementioned arrangement leaves a mass of infrastructures for development of local communities along the line, which reduces local investment accordingly, and

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alleviates the burden of local residents. Secondly, a great deal of land is acquired temporarily beyond the boundary line along the line due to construction requirements, some of which may be difficult to reclaim. For instance, it is hard to reclaim the girder fabrication yard which requires deep foundation. Some spoil grounds, especially the spoil ground and waste disposal area for tunnel construction, are of temporary land hard to be reclaimed. Taizhongyin Railway Co., Ltd. will compensate for the land hard to be reclaimed as per the compensation standard for permanently occupied land, but will acknowledge the nature of temporarily occupied land too. Particularly, the local governments regard some girder prefabrication yards as construction sites and develop such sites via attracting investment, thus making them become the important leading projects in local areas. 2.5.2 Providing employment opportunities 28. Via establishing headquarters to coordinate with local governmental poverty alleviation departments, during railway construction, many non-technical employment opportunities are provided for local poor people and women, so they can get income additionally. 29. From the railway construction contractors, the external monitoring group knows that there are many non-technical posts provided for labors and even women of local poor families in the counties/districts along the line.In Ningxia Hui Autonomous Region, the minority families also have the chance to gain non-technical posts on the construction site. The incomplete statistics show that till now, the labors engaged in the new railway construction are up to 37.11204 million person/day, of which the local villagers employed are 5.154 million person/day, accounting for 13.8% of the total amount. Among the local villagers employed, poor villagers are 4.555 million person/day, accounting for 88%; women are 653,000 person/day, accounting for 13%. Those poor villagers are paid with 80-120 yuan/working day, of which the labor cost in Ningxia and Shaanxi (located in the west area) are slightly lower, which is about 80 yuan, while the labor cost in Shanxi (located in the east area) is higher, which is up to 120 yuan. Among the poor villagers employed, the poor villagers in Ningxia are 155,000 person/day, accounting for 3%, and 82% of the local people employed are labors from poor families, and 4% of them are women. From engaging in railway construction, the poor families have gained at least 10.16 million yuan in total and the women employed have gained at least 496,000 yuan. There are up to 681 organizations to provide various services for railway construction. 30. In Shaanxi, there are about 845,000 person/day local villagers employed, accounting for 6% of the total amount of labors. Among the local labors employed, 90% are from poor families, and 5% are women. Their average wage is 80 yuan/working day. From engaging in railway construction, the poor families have gained at least 60.84 million yuan in total and the women employed have gained at least 3.042 million yuan. There are totally 1,130 organizations to provide various services for railway construction contractors. 31. All construction companies have provided the labors employed by contractors within Shanxi Province since the commencement date, of which the local labors are 4.154 million person/day, accounting for 12% of the total amount. Among the local labors employed, those from poor families are up to 3.695 million person/day, accounting for 89%; and women account for 13%.From engaging in railway construction, the labors from poor families have gained 8,600-90,000 yuan/person additional income and even the women employed have gained up to 84,000 yuan/person. There are totally 952 organizations to provide various services for railway construction. 32. In addition, the external monitoring group also knows that because the qualities of

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labors in rural communities along the line are inconsistent with the contractors’ requirements, the contractors are unwilling to employ those rural labors. For instance, Ren Shumin (Chief Supervisor of Supervision Organization for the Taiyuan-Zhongwei-Yinchuan Railway Project in Shanxi Province, Tel.: 13453148753) regards that because the construction companies need to coordinate with the local communities and gain their supports, the agreements regarding preferential employment of local labors during railway construction are concluded with local villages and towns. However, the local labors are not adaptable to such formal construction management systems and even reluctant to work, which affect the construction progress to some extent. Ma Jianming (Tel.: 13353513429) of the Third Engineering Co., Ltd. for Taizhongyin Railway Construction Project of China Railway 25th Bureau Group Corporation says that when they employ labors during construction, the local labors only account for about 20%.The reasons are that it is difficult to manage the local labors and some jobs have technical requirements during construction. The local labors mainly engage in non-technical physical works such as earth excavation, ditching and landscaping, and the wage is 120 yuan/working day. This company also employs the local women for watching construction materials and cooking, and the wage is 80 yuan/working day. 2.5.3 Purchasing local construction materials 33. In addition to employ local labors for engaging in non-technical work during construction, under the premise of ensuring quality, the contraction companies also purchase local construction materials as possible, which can reduce transportation cost and also increase the local people’s income. From interviewing construction contractors and the information provided by them, the external monitoring and evaluation organization gains the specific data about purchasing construction materials locally. Such data reflects impacts on local economic income increase brought by railway construction. Generally speaking, cement and steels are construction materials specified by Party A and specially supplied by the Employer (Taizhongyin Railway Co., Ltd.), so the contractors have not provided any local procurement data in Ningxia and Shaanxi. Along the line, the total expenditures on purchasing construction materials locally are 11.406 billion yuan, including 3.039 billion yuan for sands, 1.245 billion yuan for cement, 3.48 billion yuan for stones, 2.246 billion yuan for steels and 1.39 billion yuan for other construction materials. Meanwhile, construction persons of the project constructors also spend 630 million yuan for personal consumption. Specifically speaking, the poor families have provided 420 million yuan construction materials and 65.12 million yuan living goods in total. Both material procurement and personal consumption have greatly stimulated development of the local industry and economy and increase the income of poor families. 2.6 Improving local school conditions 34. The Taiyuan-Zhongwei-Yinchuan Railway affects many primary and middle schools along the line. The investment in education is poor due to the difficult local economy along the line, so the school houses to be demolished and the teaching facilities are old and even damaged. If they are compensated as per the general compensation standard for house demolition, the compensation fees are far from the fees (at least with 1/2 shortage of funds) required for building new schools of the same scale and equipping the corresponding teaching facilities. In order to support development of rural education, Taizhongyin Railway Co., Ltd. has consulted with the local governments, to compensate as per the fees required for building a new school satisfying the existing teaching requirements. Therefore, educational conditions of the affected regions are improved.

14 3 Construction Safety Management and Workers’ Health Maintenance 3.1 Construction safety systems and implementation 35. Generally, all construction contractors have paid high attention to the construction safety management, established complete systems, and strictly implemented related systems. All contractors involved in construction of the Taiyuan-Zhongwei-Yinchuan Railway are from China Railway, China State Construction, China Communications Construction Co., Ltd. and other state-owned engineering construction groups with high management level in China, which implement normalized management systems strictly. 36. The Contractor of Taiyuan-Zhongwei-Yinchuan Railway Construction Project of China Railway 25th Bureau Group Corporation introduces that they implement the group’s quality safety control system before 2009. In 2009, the MOR proposes “Normalized Management”, and takes Taiyuan-Zhongwei-Yinchuan Railway as the pilot project of this management system. The Normalized Management refers to standard safety quality, from the commencement date to the completion date, all safety aspects involved in construction such as construction safety and food safety are included, thus forming a set of standard management system. While implementing the system during site construction management, the Project Management Department of the Contractor mainly focuses on supervision of safety details: A worker will be penalized for 100 yuan/time if without life belt during construction; construction workers must have certificate; safety training on special jobs must be carried out weekly; training on related workers of project headquarters must be carried out once a month. In addition, posters are put up around the construction site to strengthen workers’ labor protection awareness. 37. Zhang Yaguo (Chief Engineer of the Headquarter for Taiyuan-Zhongwei-Yinchuan Railway Construction Project of China Communications Construction Co., Ltd., Tel.: 13620677135) also explains their methods: 1) Firstly, establish the safety management system. On Feb. 2007, the Company issues documents to the headquarter, namely, Notice regarding Strengthening Safety Quality Management Organizations at All Level and Staffing (ZJTZYZAZ [2007] No. 0129), which requires that all project management departments, based on the principle of “horizontal to the border, longitudinal to the bottom and effective control”, to strengthen safety management and control, establish the safety quality management organization integrating safety, quality, environmental protection and water conservancy management functions and appoint 90 full-time management leaders. In addition, the Penalty Measures for Safety Quality Problems regarding Taiyuan-Zhongwei-Yinchuan Railway Project of China Communications Construction Co., Ltd. is prepared to ensure implementation of the management system, and the Interim Measures for Construction Safety Management of Taiyuan-Zhongwei-Yinchuan Railway Project Headquarter of China Communications Construction Co., Ltd. is also issued. In June 2008, Documents Related to Safety and Instrumentation Systems are issued (see Fig. 1 and 2 for details). All those documents are used to guarantee construction safety and worker’s personal safety. 2) Construction organizations at all levels (headquarter, project management department and operation team) establish safety management committees and safety quality engineers, and carry out safe operation trainings and various related systems. External Monitoring Report on Social Development Action Plan of Taiyuan-Zhongwei-Yinchuan Railway Project (Phase IV)

3) Strengthen supervision and inspection to ensure the effect. The headquarters organize the special regulation activities for project quality safety management regularly. 4) To ensure safety of residents in communities along the line during construction, all construction companies are required to set up warning signs on site to indicate safety systems and important notices. 4) With the above project safety management measures, as for most areas of the section from Taiyuan of Shanxi to Suide County of Shaanxi constructed by China Communications Construction Co., Ltd., although the whole line work has been completed till the external monitoring and evaluation, generally no safety accident happens. All construction companies have done much work on this aspect. Additionally, there are funds and measures specially used for preventing such events. 38. China Communications Construction Co., Ltd. and other construction bureaus involved in railway construction pay high attention to safe production. All project management departments organize all workers to carry out post training regarding knowledge necessary for safe production, and the workers should be employed with certificates after passing exams. The workers engaging in special jobs must pass training organized by related departments and work after gaining the certificate, and the personnel without training or failed in the exam is prohibited from working without certificate. 3.2 Protection of workers’ rights 39. During project management of Taiyuan-Zhongwei-Yinchuan Railway, rights of the local workers and other construction workers involved in construction are protected, and such rights include work safety training, conclusion of labor contract, wage payment, health protection, social insurance, etc. 40. The external monitoring organization also knows about the concept of constructing harmonious railway proposed by Taizhongyin Railway Co., Ltd. The project management department of the company regards management and training of rural workers involved in railway construction and stimulating their activity as the important links for constructing the harmonious railway. To ensure that the wages of rural workers are paid on time, Taizhongyin Railway Co., Ltd. systematically requires the contractors involved in railway construction to open the guarantee account for wage payment and deposit as per the work quantities in advance. The project management departments of construction companies have arranged personal accident insurance for all rural workers by stages and in different batches. When the Great Sichuan Earthquake (Wenchuan Earthquake) happened in 2008, China Railway Tunnel Group Co., Ltd., China Railway 16th Bureau Group Corporation and other companies had paid wages to Sichuan rural workers in advance, so they could return home in time to participate in the earthquake relief work. 41. This report will not repeatedly describe the Work Contract signed with all workers described in the Phase II Monitoring Report for determining rural workers’ rights such as the minimum wage standard and payment principles and social insurance, 3.3 Health protection 42. As for the health protection of project management personnel and construction workers, the construction organizations involved in Taiyuan-Zhongwei-Yinchuan Railway have taken the following measures: 1) All companies organize physical examinations for all workers by the self-owned health resources (staff hospital) or the resident hospital on site regularly

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(annually in general) to know about their physical conditions. The project headquarters have signed the assignment agreements with the resident hospital on site, and the construction companies will contact the local hospital in case of emergency in need of medical workers. 2) Some construction companies appoint health workers on site. 3) All workers involved in construction are established with health files while being employed. 43. Within the construction scope of China Communications Construction Co., Ltd., no infectious disease or AIDS has happened till now. The project management departments and headquarters contact the resident hospital to conduct the comprehensive physical examinations of all formal worker once a year, including labors, management personnel, workers of coordination department, technicians, etc. The physical examination frequency of staff canteen, restaurant and logistics workers is much higher. 44. As for the China Railway 25th Bureau Group Corporation, health and disease control is an integral part of the construction quality control system, and has been integrated into the emergency response system. The specific measures include: 1) The workers in key health-concerned departments such as canteens must work with the health certificate. 2) Regular inspection: by means of the local health and medical organizations, the project management departments organize all formal workers for physical examinations regularly. The medical workers of company’s staff hospital also send medicines to the construction site regularly (once several months in general). 3) As for the high density of construction workers on site and the relatively concentrated arrangement of labors’ board and lodging, in order to ensure their health, the chefs servicing them must have health certificates and carry out physical examinations several times a year, and the cooking facilities must be sterilized strictly. 4) To guarantee workers’ health, management personnel of the project management department mainly take measures such as birth control, disease control, inspection and prevention of hepatitis and infectious disease, annual physical examination and gynecological examination of female workers. All construction companies have paid high attention to health screening, infectious disease, venereal disease and AIDS control of workers, especially the rural workers, and prevent food poisoning and other group accidents.

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4 Project Construction and Poverty Impact 45. Poverty is a common social problem currently existing in developing countries which arouses general concern of the international society. It is also a compulsory requirement of the project invested by ADB to combine the project construction with poverty alleviation. Poverty is usually a result of the combination of natural, economic and social factors. The investment project can provide poor people with more opportunities to escape poverty towards well-off conditions and create more possibility for them to enhance their own capacity and integrate themselves with the mainstream society, thus to improve their ability against natural, economic and social risks. These are also the main causes of the investment project of ADB. 46. According to the requirements specified in the policy of ADB, vulnerable groups are worth a special attention in the project construction, the resettlement planning and its implement. The project construction has provided them with an opportunity to improve the situation. However, the project construction and resettlement will also possibly to have especially adverse impacts on vulnerable groups, who are defined in the policy as the poorest people, those without legal property, female householders, aborigines, ethnic minorities and pastoralists. The policy of ADB specifies that when vulnerable groups are under the adverse impacts, the decision on resettlement and compensation shall take them into special and prior consideration, thus to help them strengthen the ability to deal with the problems. 4.1 Poverty alleviation measures implemented by the local government in the project area 47. Most areas the Taiyuan-Zhongwei-Yinchuan Railway Project runs through are comparatively poor areas in north China. The Project is no doubt helpful for reducing the poverty of local residents and improving their income level. Besides receiving sufficient compensation for land acquisition and demolition and proper resettlement, the labor forces of poor families have increased their income through various ways such as getting employment opportunities on the railway construction site, offering qualified construction materials to the railway construction organization and providing the railway workers with consumption services. The information selected by the external monitoring organization from the discussion with the local governments along the line and the interview of each affected village indicates that the Project has positive and obvious impacts on the poverty alleviation of the project areas. 48. The government of Zhongning County, Ningxia Province, made a unified resettlement for the relocated households in combination with the new socialist countryside construction being carried out by the local government. During the housing rebuilding, affected people received the support of infrastructure construction of centralized resettlement sites and other policy-oriented support from the local government with an overall change in their residential condition and quality. 49. The people affected by land acquisition of Hongshibao Development Zone, Ningxia Province, moved and migrated from areas with severe environment. In order to make their lives sustainable after land acquisition by the Taiyuan-Zhongwei-Yinchuan Railway, the resettlement department provided them with the unused lands for cultivating which had already been acquired as state-owned lands when the development zone was established. This kind of way for resettlement is temporarily called “acquire one and return one”.

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50. It is proved by Li Lifeng (the director of Poverty Alleviation Office of Yongning County, Jinfeng District, Ningxia Province; Tel: 13995016995) that the Taiyuan-Zhongwei-Yinchuan Railway construction has reduced the poverty of this county to a certain extent. And as is informed, this kind of situation exists at different levels in all the other areas along the line, which is mainly shown in the following aspects: 1) In the last three years, more than 100 agricultural transport vehicles has been newly increased in this county to transport materials for the railway, thus bringing additional income for the relevant farmers; 2) Some labor forces in the poor local village were employed for the railway construction, bringing additional income for the relevant farmers; 3) The railway construction company bought consumer goods, local construction materials and especially vegetables and meat, bringing additional income for the farmers and promoting the development of the local industry; 4) Each year when comes a festival (such as the Spring Festival), the involved contractors of railway construction works will carry out donation activities for the poor local villagers, improving the conditions of some poor families; 5) The involved contractors of railway construction work hand in some taxes to this county, increasing financial income of this county, thus to indirectly enhance its ability to solve poverty problems. 4.2 Impacts of Taiyuan-Zhongwei-Yinchuan Railway construction on poverty alleviation 4.2.1 Direct impacts of compensation for land acquisition and demolition for railway construction 51. In the Project, all migrants affected by land acquisition or by demolition have been well resettled basically. Until now, no relocated household has suffered from poverty or had a fall in the living level as a result of the land acquisition and demolition for the project construction. And each resettlement compensation standard for land acquisition and demolition is no lower than the standard specified in the Resettlement Action Plan. Additionally, in order to protect the migrants’ living conditions against deterioration, the Employer and the local governments have taken various measures to improve the compensation standards to cope with price inflation. Meanwhile, this Project has paid special attention to vulnerable groups. The follow-up lives of poor families are basically insured and some of the vulnerable families have improved their living conditions as a result of the Project. 52. As for the demolition work, the complement result of resettlement has direct impacts on the recovery of lives of the affected people and the social stability of local places. Therefore, each local government has also tried its best to solve the residential problems of the relocated households, thus to improve people’s living conditions and advance the harmonious development of society. In many areas, the affected people with newly-built houses enjoy much better living conditions than before the demolition. There is a high proportion of old houses with brick-tile structure, earth-wood structure or simply-equipped structure in the original demolished houses, while most of the newly-built houses are of brick-concrete structure. Many relocated households are glad to have this opportunity to improve their living conditions. 53. The Shaanxi and Shanxi sections of the Project locate in the hilly region on the edge of Loess Plateau with criss-cross ravines in the field where transportation is inconvenient, houses are generally simple, and even some villagers live in an original

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cave-house for generations. The project construction has indeed brought some temporary difficulties to the local villagers, but meanwhile provided some of them an opportunity to improve their living conditions in advance. 54. It is learnt that the temporary difficulties were: compensation for demolition was a little low, and the price of construction materials rose during 2006 – 2007 with the house replacement price obviously higher than the compensation price, which caused difficulties to rebuild new houses for poor migrants. The opportunities come from the government’s new countryside construction planning and poverty alleviation planning combined with the project construction, and the affected households have became exactly the first beneficiaries with their residential conditions being improved. 4.2.2 Income increase of poor families 55. As a result of the compensation for land acquisition and demolition for railway construction, the poor people along the line have increased their family income obviously in a short period. Some families have accumulated the financial ability to develop other income sources and channels besides agricultural income and the financial ability of these families, in combination with the planning guide of the local poverty alleviation department, will become the basis for the poor families to further increase their income. Meanwhile, it is obvious that there is a high proportion of old houses with brick-tile structure, earth-wood structure or simply-equipped structure in the original demolished houses, while most of the newly-built houses are of brick-concrete structure. Many relocated households are glad to have this opportunity to improve their living conditions. 56. In consideration of the machine capacity and professional technology of the construction company of the Project, local village officials asked the resident construction company to help the poor families with their relocation and reconstruction, and requested the company to give them a strong support on transportation means and the leveling of new housing lands of the resettlement site. According to the introduction of China Railway 25th Bureau Group Co., Ltd., it has directly helped affected people and some of the poor families through sending free vehicles and staffs to help the relocated households with their relocation and contributed 0.8 – 1 million yuan to clear the demolition wastes and construction wastes of the new houses for affected people. 57. Based on the incomplete statistics so far, job opportunities provided to poor families along the line are of 4.555 million persons. day; poor people within Ningxia Province and Shaanxi Province respectively got an income of 10.16 million yuan and 60.84 million yuan, and those within Shanxi Province gained 365.50 million yuan for their labor service (the salary calculated as 100 yuan per person. day) ; labor forces of poor families participating in the project construction had an average income of 8,000 – 10,000 yuan per person; meanwhile, people in poverty earned up to 32,291 yuan through providing local construction materials to the railway construction contractors. 4.2.3 Impacts of the railway construction on thoughts & ideas of the people in poverty 58. The human poverty is not a kind of material poverty, but an inner poverty just like the body lacking of hematopoietic function. The key for the government to alleviate poverty is not to provide economic grant or policy-oriented care only, but to fundamentally root out the causes of poverty, i.e. to improve the quality and ability of the people in poverty, just like strengthening their hematopoietic function. Construction of the national key project has provided local people training opportunities on export of labor forces, production skills and legal rights, and brought them impacts of new thoughts and new ideas. Through widely participating in the

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railway construction, people in poverty not only got the deserved income, but also obtained the opportunities to integrate themselves with the mainstream society, improve their own ability and strengthen the ability to adapt to the society. 59. The impacts of Taiyuan-Zhonnwei-Yinchuan railway construction on the people along the line are profound and lasting, especially the impacts on their thoughts and ideas, which will have an inestimable influence in widening their view, eliminating the closed-consciousness, activating economic factors, strengthening commodity consciousness and developing the family economy. 60. Due to the traditional consciousness of “emphasizing agriculture but restraining commerce” with a history of thousands of years in China, people know little about the market economy. The Project has widened local people’s eyes from the survey as its commencement to the mechanized construction. Resource effects and consumption demands have urged some of them to change their cultivation habits, thus to taste the benefits of the production increase. The construction of new villages for resettlement has also aroused their desire to live like the people in cities. Where there exist hope and desire, there is motivation for people to get rid of poverty, to be unsatisfied with the current situation and to fight and pursue with unprecedented resistance.

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5 Project Construction and Women’s Development 5.1 Evaluation methods 61. The external monitoring and evaluation organization always insists the idea of “gender equality” in evaluation. Especially, whether female are treated the same equally as male in the social economic activities will be a basic inspection item in the evaluation. The resident evaluation and survey group communicated with the Women’s Federation of the local villages, townships and counties to learn about general changes of the local women’s development, talked with the affected families, especially female-headed households to know about the specific impacts of Taiyuan-Zhongwei-Yinchuan Railway on their production and lives, and observed the implement of the principle of “gender equality” in the formulation and implement of the compensation & resettlement policy and during the process of compensation & resettlement for land acquisition and demolition. 5.2 Social significance of concerns on women’s development 62. China is a developing country with unbalanced women’s development between cities and townships and among different regions due to unbalanced economic and social development thereof; there still exists a deep gap between the women’s quality and the requirements for female talents of the development strategic goal of the times; the social position and social function of women cannot be admitted for a long time; and it is difficult, to some extent, to protect some of the women’ rights. The social gender problem is that sexual discrimination exists commonly in current developing countries. Actually, however, none of the human social activities can be carried out without women’s participating, whether directly or indirectly. In the investment project of ADB, the social evaluation attaches great importance to the gender development, for women are a force that can not be ignored. The level of women’s development is a major sign of social development and also an important measure of social progress. 63. The social evaluation attaches great importance to the gender development, for the social gender problem is that sexual discrimination exists commonly in current developing countries, i.e. the social position and social function of women cannot be admitted for a long time. Actually, however, none of the human social activities can be carried out without women’s participating, whether directly or indirectly. In the investment project of ADB, women are still a force that can not be ignored. 5.3 Status of women’s development in project-affected areas 64. In 2009, under the direction of the working principle of “learning culture & technology, competing in achievement & contribution”, the Women’s Federation of Dingbian County established an education base for urban and rural women, a women’s training school and a women’s service center so as to cultivate economic women and develop woman-headed sci-tech modal households of courtyard economy, and tried to let the women master 1 or 2 new kinds of amassing-fortune technology; meanwhile, this county tried to carry out well the project of “Earth’s love, Mothers’ wells” . In its work of poverty alleviation with one village as a unit, the Women’s Federation contacted via the township with the involved poor villages relevant to Taiyuan-Zhongwei-Yinchuan Railway and made an agreement that the construction squad should prior employ railway workers including women labor forces from the local villages; The Women’s Federation of Jingbian County organized women to widely take part in the technology training and right protection training under the direction of the idea of “harmonious family”, so as to overall safeguard the

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women’s and children’s rights and interests; in 2009, the Women’s Federation of Suide County carried out 23 skills & science trainings with a total of 2,000 trainees. The towns and villages with women affected by land acquisition and demolition along the Taiyuan-Zhongwei-Yinchuan Railway line were significantly concerned where mutual driving and supporting work was carried out. Moreover, through training and selection, 300 women labor forces were transported to Shenzhen, Shanghai etc. Some of the women along the Taiyuan-Zhongwei-Yinchuan Railway line who had taken part in the training were employed as a cook or a material handler in the local railway construction company. 65. According to the introduction of Liu Xiaoyan, President of Women’s Federation of Zhongning County, there are 143,000 women in this county, accounting for about 47.99% of the total population. The education levels of the adult rural women are mainly below the junior secondary school level. There are perfect women’s institutions in villages, townships and counties and the women work can be carried out very smoothly with favorable effects. The main work carried out by the Women’s Federation is skills training and right protection, including 4 or 5 sci-tech trainings such as the vegetable planting training and the livestock breeding training. Railway construction has brought impacts to the local women’s development. Lots of women know that the railway is being constructed in their county through newspapers, televisions, advertisements and construction sites; the thoughts and ideas of many women have changed: they used to stay at home for cultivation, but now the number of women who begin to go out for labor services, plant greenhouse vegetables and run little shops is increasing; according to the survey of the external monitoring and evaluation organization, this kind of situation can also be seen in Lingwu City, Yongning County, etc. of Ningxia Province. 66. The Taiyuan-Zhongwei-Yinchuan Railway Construction Project has attached great importance to the women’s right guarantee work. Besides getting equal pay for equal work with the railway workers, women workers participating in the project construction can also enjoy the special treatment during the “four periods” (the menstruation period, the gestation period, the perinatal period and the lactation period).Women workers said that they did an easier job than housework while got higher income. Although the land acquisition and demolition have brought negative impacts to the affected women group, the local government and Taizhongyin Railway Co., Ltd. have done a series of work to minimize these impacts, bringing new thoughts and ideas instead to these women who hardly went out of their home. 67. The external monitoring, evaluation and survey group believes that Taiyuan-Zhongwei-Yinchuan Railway Construction Project has accelerated gender equity development in regions along the line and has formed a good change trend. Since the railway project has been commenced, women along the line have showed good change trends from aspects such as thoughts & ideas, social positions and family positions, under the guidance of the Women's Federation and through participating in market economy, more women paid more attention to education, including learning culture and science & technology themselves, and meanwhile taking the education of their children more seriously. The external monitoring and survey group hasn’t seen any discrimination against women in the site survey.

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6 Conclusion and Problems 68. The Taiyuan-Zhongwei-Yinchuan Railway Project is being promoted and the Social Development Action Plan the Project promised when signing the loan agreement with ADB is simultaneously on its way to the completion. Generally speaking, plenty of job opportunities have been provided to the villages along the line during the Taiyuan-Zhongwei-Yinchuan Railway construction. Though we cannot conclude that the quantity of job opportunities has met the requirement of the project plan (because the Project has not been completed yet) , those job opportunities are no doubt direct opportunities for the local labor forces, especially for poor families (with a proportion of more than 85%) to increase their family income; besides, each construction organization of the Project has supplied large sums of money to the local communities and poor families along the line through purchasing a great quantity of construction materials and consumer goods from them, which has not only advanced the local industry, but also offered the material suppliers, especially the poor local families, an opportunity to improve their life quality. The Employer (Taizhongyin Railway Co., Ltd.), construction contractors and local governmental resettlement authorities for land requisition and demolition, through various measures, have ensured the rights and interests of the affected people and the labor forces participating in the railway construction including their salary, construction safety guarantee, social insurance, health and epidemic prevention, health insurance etc. Due to a series of prevention measures, there have been no records of serious epidemic diseases or communicable diseases including AIDS along the line. The women, ethnic minorities and vulnerable groups involved in the Project are equally treated. Local governmental resettlement authorities for land requisition and demolition coordinated with other departments including the Poverty Alleviation Office and the Women’s Federation to carry out various skills trainings for the affected groups including people in poverty and women. During the reinstruction of the affected areas, the resettle authorities and construction contractors offered their help as much as possible. 69. Employment situations and tourism development along the line specified in the Social Development Action Plan are to be further monitored and reported by the railway operation backup organizations. 70. Although in general, the positive effects of the Taiyuan-Zhongwei-Yinchuan Railway Project in advancing the social and economic development of the areas along the line are praiseworthy, the external monitoring and evaluation organization still thinks that the following aspects are worth further concerns of relevant authorities: 1) Local governmental organizations such as the Poverty Alleviation Office and the Women’s Federation have been working hard, but from the viewpoint of the overall significance, the series of work carried out by these organizations of paying close attention to vulnerable groups and promoting poverty alleviation and women’s development hasn’t been fully combined with the resettlement of the Taiyuan-Zhongwei-Yinchuan Railway Project. The local governmental resettlement authorities should strengthen lateral information communication and enhance the special supporting measures for vulnerable groups, thus to improve resettlement effectiveness. 2) Social security policies haven’t been implemented yet in Shaanxi Province for the people affected by land acquisition of the Taiyuan-Zhongwei-Yinchuan Railway Project, which will bring a risk to the sustainable development of the follow-up lives of the affected people after the implement of compensation and

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resettlement for land acquisition. 3) There are still workers in some of the construction companies including temporary workers and short-term employees not able to get physical examinations and monitoring of venereal diseases, AIDS, etc., which brings influence to the prevention of serious communicable diseases. 4) Although the reclamation of temporary lands including borrow pits and quarries is under way, the monitoring needs strengthening. 71. The key points of monitoring work on the social development plan of the next stage done by the external monitoring and evaluation organization: 1) Close attention to the impacts of the construction on the environment of local communities, such as noise, environment protection and recovery of infrastructure; 2) Income restoration of affected people; 3) The relationship between the preparation work of the project operation and local affected people, for example, the connection with local affected people in the design of the railway station and the future management planning; 4) Further concerns about the impacts of the railway on the local macroscopic social economy. 72. The submission time of the monitoring report on the Social Development Action Plan of the next stage: March, 2012.