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World Bank Document A'3V 7/<&-WA Document of The World Bank FOROFFICIAL Public Disclosure Authorized USE ONLY MICROFICHE COPY ReportNo. 10335-CHA Report No. 10335-CHA Type: (SAR) RAGGAMBI, / X84039 / A7071/ EA2TP STAFF APPRAISAL REPORT Public Disclosure Authorized CHINA ZHEJIANG PROVINCIALHIGHWAY PROJECT MARCH 31, 1992 Public Disclosure Authorized Public Disclosure Authorized Transport OperationsDivision China and Mongolia Department East Asia and Pacific Region Thisdocument hasa reshicteddisuibutdon andmaey be used by recipientsonly their officiil duties. Its contents in Ihe per6ormanceof may not otherwise be disclosedwitbout World Bank authoffmraon. CURRENCYEQUIVALENTS (as of March 1992) Currency name - Renminbi Currency unit - Yuan (Y) - 100 Pen $1.00 - Y 5.48 $0.18 - Y 1.0 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) - 0.62 mile (mi) 1 square meter (m2) 2 10.76 square feet (sq ft) 1 square kilometer (km2) - 0.4 square miles (sq mi) 1 hectare (ha) - 0.01 (k2) - 2.47 acres (ac) - 15 mu 1 mu - 666.7 sq m - 0.0667 ha 1kilogram (kg) - 2.2046 pounds (lbs) 1 metric ton (m ton) - 2,204 pounds (lbs) PRINCIPAL ABBREVIATIONSAND ACRONYMS USED EA - Environmental Assessment EAP - Environmental Action Plan E.'uA - Economic Internal Rate of Return SFYP - Eighth Five-Year Plan (1991-95) FYRR - First Year Rate of Return GOVAI - Gross Output Value of Agriculture and Industry HPDI - Highway Planning and Design Institute HSRI - Highway Scientific Research Institute ICB - InternationalCompetitive Bidding JST - Joint SupervisionTeam for Hangzhou-NingboHighway LCB - Local Competitive Bidding mOC - Ministry of Communications MOF - Ministry of Finance NPV - Net Present Value pcu - Passenger Car Unit PMS - Pavement Management System PRC - People's Republic of China PTD - Provincial Transport Department RAP - Resettlement Action Plan RDB - Road Data Bank RDP - Road Development Program 7FYP - Seventh Five-Year Plan (1986-90) SPC - State Planning Commission TCU - Technical Coordinating Unit ZPEPB - Zhejiang Provincial EnvironmentalProtection Bureau ZPEPEC - Zhejiang Provincial Expressway Project Executive Commission ZPEPRI - Zhejiang Provincial Environmental Protection Research Institute ZPG - Zhejiang Provincial People's Government ZPHAB - Zhejiang Provincial Highway Administration Bureau ZPTD - Zhejiang Provincial Transport Department ZPTDI - Zhejiang Provincial Transport Design Institute vpd - Vehicle per day FOR OMCIAL USEONLY ZHEJIANGPROVINCIAL TRANSPORT PROJECT Table of Contents Pate No. Loan and Project Susmary . iv 1. THE TRANSPORT SECTOR . A. Introduction . .1 Be Traffic1 C. Investment . 3 D. Transport Issues and Objectives . 3 E. Bank Group Participation in Transport Sector . 5 P. The Highway Subsector ........... ... 7 II. ZHEJIANG PROVINCE TRANSPORTSECTOR . 13 A. Situation and Economy ................. 13 B. Transport Network ... ... 13 C. Traffic Growth and Characteristics . 14 D. The Vehicle Fleet . 14 E. The Trucking Industry . 15 F. Highway Administration ................ 15 G. Planning, Budgeting and Financing . 15 H. Engineering, Construction and Maintenance . .,17 I. Highway Development ... ....... 18 III. THEPROJECT . * * * * * 19 A. Project Formulation and Preparation . 19 B. Project Objectivesand Rationalefor Bank Involvement . 19 C. Project Scope . 20 D. Environmental Assessment . 25 This report is based on the findingsof a June 1991 appraisalmission comprisingMessrs. Otto Raggambi (HighwayEngineer, Task Manager),Stephen Stares (TransportSpecialist), Hatim Najj (TransportSpecialist), David Butcher(Resettlement Specialist), William Lane (Environmental Specialist, Consultant), Doi Dogehang(Operations Officer), and Zhang Jianfei(Consultant) and a December 1991 poet-appraisalmission comprising Messrs. Raggambi, Stares,Hajj, Dai, Zhang and Ms. RuwaniJayewerdent (Resettlement Specialist, Consultant)and Mr. Paul Dean (EquipmentSpecialist, Consultant). Peer Reviewers for the projectwere Ms. CarolleCarr (Economist),Messrs. Asif Paiz (HighwaysAdvisor), Jacques Yenny (TransportEonomist), and Nick Anderson (ProjectOfficer). Ms. E. Rankin (Economist,Consultant) assisted in the preparationof t'sisreport. The DivisionChief is Mr. Daud Abmad and DepartmentDiroctor is Mr. ShahidJaved Burki. This document has a restricteddistribution and may be used by recipients only in the performance of their oflicialduties. It contents may not otherwise be disclosedwithout World Bank authorization. - ii - Page No. E. Land Acqulsltion and Resettlement . 26 P. Cost Estimates . .. ... ... 27 G. Financing. ........ ........ 27 H. Implementation . 29 I. Procurement . 31 J. Disbursements . 33 K. Auditing ........... 34 L. Project Supervision,Reporting, Monitoring . 34 IV. ECONOMIC EVALUATION . .. ... *.......... .... 34 A. Main Benefits and Beneficiaries . 35 B. Hangzhou-NingboHighway .. * ................... 35 C. Road Development Program . 38 D. Overall Evaluation and Risks . 40 V. AGREEMENT REACHED AND RECOMMENDATION . 41 TABLES 1.1 Freight Traffic Intensitiesin Selected Countries . 43 1.2 Road and Railway Network Density in Selected Countries . 44 1.3 China: Freight Traffic . ; . 45 1.4 China: Passenger Traffic . .. .......... 46 1.5 China: Investment in the Transport Sector (Including Posts and Telecommunications) . 47 1.6 China: Transport Investment vs. Economic Output . 48 1.7 China: Highway Design Standards . 49 1.8 China: Civilian MotorVehicles . 50 1.9 China: HighwayFreight Transport . 51 2.1 Zhejiang: Economic Data, 1990 . 52 2.2 Zhejiang: Demographic and Transport Network Data, 1990 . 53 2.3 Zhejiang: Road Network, 1981-90 . 54 2.4 Zhejiang: Traffic, 1984-90 . 55 2.5 Zhejiang: Length of Highway by ADT, National Roads and Provincial Roads, 1990 . .. .... ..... 56 2.6 Zhejiangt Vehicle Fleet, 1984-90 . 57 2.7 Zhejiang: Freight Handled by Public and Social Trucks, 1982-90 . * 9 . 9 9 . 58 2.8 Zhejiang: Highway Finances, 1986-90 . 59 2.9 Zhejiang: FuelPrices . a . * . 60 3.1 Staff Training Program . 61 3.2 Equipment for Hangzhou-NingboHighway Component . 62 3.3 Equipment for Hangzhou-NingboHighway Component . 63 3.4 Equipment for Road Development Component . 64 3.5 ImplementationSchedule . 65 3.6 Disbursement Schedule . 66. - lii - Page No. 4.1 SocioeconomicProjections in the Hangzhou-NingboCorridor . 67 4.2 Recent Traffic Growth on the Existing Hangzhou-NingboRoad 68 4.3 Projected Highway Traffic Volumes in the Hangzhou-Ningbo Corridor * * * * * * * ** * * * * *.*.*. 69 4.4 EstimatedEconomic Cost - Hangzhou-NingboHighway . 70 4.5 Average Economic Vehicle Operating Costs by Vehicle . 71 4.6 Economic EvaluationWithout Tolling - Hangzhou-NingboHighway 72 4.7 Economic EvaluationWith Tolling - Hangzhou-NingboHighway 73 4.8 Economic Evaluation SensitivityTest With Tolling - Hangzhou-NingboHlighvay ..................... 74 4.9 Evaluation Summary and Sensitivity - Hangzhou-NingboHighway 75 ANNEXES 1. Road Developmentm. Program .................... 76 2. EnvironmentalAssessment and Action Plan Summary for the Hangzhou-NingboHighway .. ........ ................. 102 3. ResettlementAction Plan Summary for the Hangzhou-NingboHighway 114 4. SupervisionMission Plan . .* . 120 5. Documents Available in the Project File . 123 CHARTS 1. Organizationof the Zhejiang Provincial Transport Department and the Highway AdministrationBureau 2. Organization of the Zhejiang ProvincialHighway Administration 3. Organization of the Hangzhou-NingboHighway Administration MAPS 1. IBRD 23353 2. IBRD 23484 - iv - CHINA ZHEJIANG PROVINCIALHIGHWAY PROJECT Loan and Proiect Summary Borrowers: People's Republic of China Beneficiary: Zhejiang Province Amount: $220 million equivalent Terms: 20 years, including5 years of grace, at the Bank's standard variable interest rate Onlendina Terms: 20 years, including 5 years of grace, at 6 percent per annum with 0.75 percent per annum commitment fee on the unwithdrawnbalance. Zhejiang Province would bear the foreign exchange risk. Project Obiectives: The project has the following specific objectives: (a) to relieve traffic congestionwhich is restraining economic growth in the Hang7hou-NingboHighway corridor, and provide a high standard road transport link in sup- port of agriculturaland industrial development; (b) to provide support for a Road Development Program prima:ily in the economicallyless developed southern regions of the Province; (c) to further develop institutionalcapa- bilities for transport planning and determinationof investment priorities;and (d) to promote the transfer of highway constructionand maintenance technology through training and provision of modern equipment. Project Description: The project includes: (a) constructionof a 138 km section of the four-lane divided, access controlled Hangzhou-NingboHighway on a new alignment; (b) con- struction and improvementof about 33 sections of provincial and county roads (970 km); (c) consultant services for constructionaupervision of the Hangzhou- Ningbo Highway; (d) staff training; and (e) purchase of equipment for road laboratories,environmental protec- tion, road research, a road data bank, a pavement man- agement system, road maintenance and highway operation. Proiect Benefits: Primary benefits from the Hangzhou-NingboHighway will be in the form of road user cost savings resulting from improvedvehicle operating costs and time savings due to reduced length of the new highway. Other benefits will stem from reduced congestion on the existing road and acceleratedindustrial and agriculturalgrowth based on improved transport facilities. Benefits from
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