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World Bank Document PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB5332 Project Name China: Guangxi Yujiang Laokou Navigation and Hydropower Project Public Disclosure Authorized Region EAST ASIA AND PACIFIC Sector Ports, waterways and shipping (60%);Power (40%) Project ID P113596 Borrower(s) P.R.CHINA Implementing Agency Nanning Transport and Water Conservancy Investment Co. Ltd. Jiangbeidadao Hediduan 20# Nanning China 530021 Tel: 86-771-5689260 Fax: 86-771-5689389 [email protected] Public Disclosure Authorized Environment Category [X] A [ ] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 26, 2010 Estimated Date of September 15, 2010 Appraisal Authorization Estimated Date of Board February 23, 2011 Approval A. Key development issues and rationale for Bank involvement 1. IWT Development in China. China has 123,000 km of navigable waterway, of which 61,000 km is officially classified for commercial navigation purposes. Most of the commercial Public Disclosure Authorized waterways are well positioned to connect the nation’s prosperous eastern coastal regions, which have an increasing demand for raw materials, with the resource-rich but less-developed inland and western regions. This mutually beneficial relationship helps to achieve the nation’s central and western development strategies. China’s inland waterway transport (IWT) industry already handles about the same volume of freight tonnes as the USA and the EU combined. Accelerated economic growth in China is generating a greater demand for the transport of coal, construction materials and other materials/goods. Accordingly, IWT has been increasing rapidly in recent years with an annual average growth rate in tonnes of 8.8 percent during the period 2000-2006 (13.1 percent p.a. in tonne-kms). An analysis carried out for the National Inland Waterways and Ports Plan to 2020 (NIWPP2020) estimated that the total of cargo traffic in China will increase from 1.16 billion tonnes in 2006 to 1.6 billion tonnes in 2010 and to 2.35 billion tonnes in 2020. 2. Despite the fast growth in past years, IWT in China is still under-developed, compared with other transport modes. Its share in the total freight of the four main inland transport modes Public Disclosure Authorized (i.e., road, rail, air and IWT) was only 8.7 percent in tonne-kms in 2006. Given its nature of low transport cost and high efficiency of energy and land utilization, IWT has significant potential to expand and capture a higher portion of the increasing transport demand. Currently its main constraint is weak infrastructure and therefore decisions regarding investments in IWT infrastructure are therefore critical to realize the mode’s major development potential. 3. The Government of China (GOC), recognizing the higher energy efficiency, lower greenhouse gas emissions, and lower use of scarce land resources associated with water transport, plans to increase the contribution of China’s waterways to its transport needs. The GOC, through the improvement of IWT, seeks to spread the benefits of development from the richer coastal belt to the poorer central and western areas. In 2007, China adopted the NIWPP2020 that aims to develop a ‘high-class’ waterway network (Class IV to Class I) of around 19,100 km. This waterway network will extend to twenty provinces and serve a catchment area that contains approximately a quarter of the population of China. 4. IWT Development in Guangxi. The Guangxi Zhuang Autonomous Region (GZAR or Guangxi) is located in south China, with approximate 48 million of population and 236,700 square kilometers of land. Guangxi’s per capita GDP ranks it one of the lowest provinces in China. It is one of the twelve economically underdeveloped southern and western provinces supported by the China Western Development Strategy. Guangxi aims to optimize its agriculture dominated industrial structure through enhancing development of its second and third industries. Transport is one of priorities of the economical development of Guangxi. This region has rich water and mineral resources that have great potential for IWT development. Guangxi government has recently given high priority to the development of IWT through a series of plans and supporting policies. 5. The Yujiang River, the biggest river in Guangxi, is part of the Xijiang River which is in turn a main tributary of the Pearl River (China’s second busiest river system after the Yangtze River) in Guangdong, one of the most prosperous and economically dynamic provinces in China. The Yujiang River flows from west to east in GZAR and runs through a number of major cities including Nanning, the capital of Guangxi. The Yujiang River has a long history of waterway transport. Its hinterland is rich in raw materials like coal and construction materials which are in high demand in lower reaches such as Guangdong Province. However, the current waterway transport volume is very low (2 million tons reported in 2005) due to the constraints caused by insufficient navigation facilities along the River. 6. Proposed Laokou Dam Complex. The proposed project—the Laokou Dam Complex—is one of the priority projects under various national and regional development strategies and plans, including the NIWPP2020, the 11th Five-Year Plan of Guangxi, the Pearl River Basin Comprehensive Development Plan, the Guangxi IWT Development Plan, and the Yujiang Waterway System Comprehensive Utilization Plan. The Laokou Dam is one of ten cascade dams (seven have been completed already) planned for navigation and hydropower development in the plans. In addition, the Laokou Complex is also one of eighteen major projects listed in the recent national implementation plan under the China Western Development Strategy. It is projected that the IWT demand from the hinterland upstream of the Laokou Dam for exporting coal, cement, and other mineral and construction raw materials could be as high as over 40 million tons by 2010 and over 70 million tons by 2020. 7. Improvement of Flood Protection. The Laokou Dam will improve the flood protection capacity of Nanning downstream of the Yujiang River. The Laokou Dam is an important project for Yujiang River flood protection under the Pearl River Basin Flood Prevention Plan approved by the State Council in 2002. After a serious flood in Nanning in the early 2000s, the City has invested heavily in its flood protection systems in high intensity urban areas to upgrade protection capacity from 1:20-year-floods to 1:50-year-floods. The recent commissioning of the Baise Dam in the upper reaches of the Yujiang River has further raised Nanning’s flood control to 1:80-year-flood protection, but this is still below the standard required in national and regional flood control plans. The Laokou Dam will upgrade the protection capacity to 1:200-year-flood through a joint regulation with the Baise Dam. 8. Increase of Hydropower Generation. Guangxi, benefitting from the China Western Development Strategy, has experienced rapid economic development. This has resulted in a fast increasing demand for electricity. In addition, Guangxi is also part of the supply base for the West-to-East Electricity Transmission Program. It is forecast that electricity demand in Guangxi will be 124,000 GWh and 180,000 GWh by 2015 and 2020, respectively. The Laokou Complex will generate annually about 663 GWh of clean and renewable hydro electricity, which will contribute to meeting the growing demand for electricity in Guangxi. 9. Rationale for Bank involvement. The World Bank has given financial and technical support to China’s inland waterway development in seven provinces over the past twelve years, including two other important dam complexes on the Yujiang, the Naji and Guigang rivers. The Bank has also recently completed a major sector review of IWT in China with the objective of identifying impediments to its sustainable development. The outcomes of the study are used to direct the Bank in helping develop IWT in China. Through its involvement in strategic review and project development, the Bank is the leader among international financial institutions in supporting China’s IWT sector. In Nanning City, the Bank has been investing in urban and environmental infrastructure through the Guangxi Urban Environment Project and, more recently, through the Nanning Urban Environment Project (a FY10 project). The Bank, through financing the proposed Laokou Dam Complex Project, will help strengthen Nanning City’s capacity of implementing, operating and managing the waterway infrastructure assets. In addition, the Project can further strengthen the cooperation between the Bank, the GZAR and Nanning City. 10. The Bank’s involvement in the Laokou Dam Complex Project will support two of the five pillars of the Bank’s FY06-10 China Country Partnership Strategy (CPS). • It addresses the pillar of ‘reducing poverty, inequality, and social exclusion’, by improving inter-regional transport access and link for the remote and poor north-western areas of the GZAR with the capital city of Nanning, as well as the cities and ports in the dynamic Pearl River Delta areas. • It addresses the pillar of ‘managing resource scarcity and environmental challenge, through reducing air pollution, conserving water resources, and optimizing energy use’, by improving flood control capacity, and generating clean and renewable hydro energy to meet the demand for electricity in Guangxi. It also facilitates the use of IWT, a transport mode that is more energy efficient, generates lower greenhouse gases and uses less
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