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Dali-Lijiang Railway Project

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Dali-Lijiang Railway Project Project Administration Memorandum Project Number: 36432 Loan Number: 2116 October 2005 People’s Republic of China: Dali-Lijiang Railway Project The project administration memorandum is an active document, progressively updated and revised as necessary, particularly following any changes in project or program costs, scope, or implementation arrangements. This document, however, may not reflect the latest project or program changes. PRC 36432 PROJECT ADMINISTRATION MEMORANDUM FOR THE DALI-LIJIANG RAILWAY PROJECT (LOAN NO. 2116-PRC) October 2005 CURRENCY EQUIVALENTS (as of April 2004) Currency Unit – yuan (CNY) CNY1.00 = $0.1208 $1.00 = CNY8.277 The exchange rate of the yuan is determined under a floating exchange rate system. In this report, a rate of $1.00 = CNY8.277, the rate prevailing at the time of fact-finding of the Project, was used. ABBREVIATIONS ADB – Asian Development Bank AFD – Agence Française de Développement BOA – boundaries of analysis DLR – Dali–Lijiang Railway DMIS – dispatch management information system EA – Executing Agency EIA – environmental impact assessment EMDP – ethnic minorities development plan EMP – environmental management and monitoring program GMS – Greater Mekong Subregion km – Kilometer LIBOR – London interbank offered rate MIS – management information system MOR – Ministry of Railways PPMS – project performance management system PRC – People's Republic of China TA – Technical Assistance WYRC – West Yunnan Railway Company YPG – Yunnan provincial government NOTES The fiscal year (FY) of the Government and its agencies ends on 31 December. In this report, “$” refers to US dollars. i CONTENTS Page Loan Processing History ii Project Framework iii-iv I. PROJECT DESCRIPTION 1 A. Project Area and Location 1 B. Objectives 1 C. Project Scope and Components 1 D. Special Features 2 II. COST ESTIMATES AND FINANCING PLAN 4 A. Detailed Cost Estimates 4 B. Financing Plan 5 C. Allocation of Loan Proceeds 6 III. IMPLEMENTATION ARRANGEMENTS 6 IV. IMPLEMENTATION SCHEDULE 6 V. CONSULTANT RECRUITMENT 6 VI. PROCUREMENT 7 VII. DISBURSEMENT PROCEDURES 7 VIII. PROJECT MONITORING AND EVALUATION 8 IX. REPORTING REQUIREMENTS 8 X. AUDITING REQUIREMENTS 8 XI. MAJOR LOAN COVENANTS 9 XII. IMPLEMENTATION OF ACCOMPANYING TECHNICAL ASSISTANCE (TA No. 4455-PRC: Support Ethnic Minorities Development Plan) 12 XIII. KEY PERSONS INVOLVED IN THE PROJECT 12 XIV. ANTICORRUPTION 12 XV. CONTRACT VARIATIONS 13 APPENDIXES 1 Project Cost Estimates and Financing Plan 2 Implementation Schedule 3 Terms of Reference for International Consultants 4 ADB-Financed Contract Packages 5 Project Performance Management System 6 Pro Forma of the Executing Agency’s Project Progress Report 7 Sample Audit Letter 8 Outline Terms of Reference for TA No. 4455-PRC: Support Ethnic Minorities Development Plan 9 List of Key Persons Involved in Project Implementation ii LOAN PROCESSING HISTORY Date a. Approval of project preparatory technical assistance 18 June 2003 (TA 4129-PRC) b. Feasibility Study 24 August 2004 c. Fact-finding 11-23 March 2004 d. Management Review Meeting (MRM) 15 June 2004 (1st MRM) 23 September 2004 (2nd MRM) e. Appraisal Mission 16-25 August 2004 f. Staff Review Committee (SRC) Not required g. Loan Negotiations 18-20 October 2004 h. Board Circulation 11 November 2004 i. Board Consideration and Approval 2 December 2004 j. Loan Agreement signing 27 June 2005 k. Cofinancing arrangement finalized and agreements signed 18 July 2005 l. Loan Effectiveness, including conditions: 25 September 2005 (1st deadline) - Subsidiary Loan Agreement between the Borrower 24 March 2006 (2nd deadline) and the Executing Agency (WYRC) iii PROJECT FRAMEWORK Design Summary Performance Indicators/Targets Monitoring Mechanisms Assumption and Risks Goal Promote sustainable A. Gross domestic product (GDP) D. GDP data through periodic economic growth and reduce is forecast to increase during economic reporting by the poverty in poor northwestern 2009–2020 at 4.5% to 5.4% government statistics office part of Yunnan province per annum for Yunnan at the provincial and county province and 6.6% to 7.4% for levels the project area B. Per capita rural income will E. Project performance increase from CNY2,202 in management system 2002 to CNY3,000 in 2013 (PPMS) at inception, C. Rural poverty incidence in the completion, and 3 years project area will be reduced thereafter with emphasis from 30% in 2003 to 15% in on socioeconomic 2013 improvement impacts Purpose • Develop an efficient, • An economic internal rate of • An EIRR reevaluated by Assumptions reliable, and affordable return (EIRR) of the Project is midterm review report and • Forecast economic growth railway transport system to estimated at about 17.0% project completion report rates are realistic and improve access and • Freight traffic in the railway • Financial performance of achievable reduce transport costs in increases from 5.4 million tons the Western Yunnan • Traffic forecasts for the the project area in 2010 to 7.2 million tons in Railway Company (WYRC) Dali–Lijiang Railway (DLR) 2015 realized • Passenger traffic increases • Progress reports • Passengers currently using from 3.1 million passengers in other transport modes will 2010 to 4.4 million passengers divert to DLR as originally in 2015 envisaged • Operating ratio of less than 0.75 maintained • Project administration • Reduced travel time from: missions (i) Kunming to Lijiang, from • Postevaluation surveys present 17 hours to 11 hours; and reports from WYRC (ii) Dali to Lijiang, reduced from • WYRC statistics present 8 hours to 4 hours • Cost of travel reduced from 38 fen/km to 27 fen/km • Promote local economic • Number of tourists traveling on • Local government statistics • Commitment of local development, especially the project railway increased • Progress reports governments to economic tourism from 2.4 million in 2010 to • Project admin. missions development through 3.3 million in 2015 and project completion tourism • Number of shops, tourist report • Tourism is developed in a centers, hotels, and business • Postevaluation surveys way that benefits local establishments set up in the population and does not vicinity of station areas have a negative impact, particularly on minorities Outputs 1. Dali–Lijiang railway line, • Transport capacity expanded • Project admin. missions Assumption 167 km, including stations in the Dali-Lijiang corridor by and project completion • Strong implementation and access roads. 640 ton-km for freight and 448 report capacity of EA passenger-km for passengers, Risk in 2010 • Capacity enhancement on connecting railway lines may not be completed on time. Assumptions 2 Employment opportunities • Creation of 96,800 person- • Progress reports • The resettlement generated for poor and years of construction-related Monitoring by WYRC and implementation is vulnerable groups to raise employment, of which the poor external monitoring agency successful in restoring incomes and living capture 50% of unskilled labor people’s livelihood after standards and reduce • Number of qualified local resettlement. poverty ethnic minorities and poor • Actions proposed to provide workers hired the ethnic minorities and the poor with access to project benefits are successful Continued on next page iv PROJECT FRAMEWORK - Continued Design Summary Performance Indicators/Targets Monitoring Mechanisms Assumptions and Risks • The ethnic minorities and the poor are qualified to capture some of the opportunities 3. Institutional capacity of G. Development of an effective H. Consultants’ report Risk WYRC strengthened marketing program to attract I. Surveys of tourism and • Adequate funds are not tourism and new industry industrial opportunities in invested in marketing along the DLR the project area J. Progress reports Activities/Inputs 1. Land acquisition and • 394 ha of land acquired and • Progress monitoring Assumption resettlement 7,709 people are relocated reports • Strong implementation and/or compensated by • Project admin. missions capacity of local December 2006 and project completion government • Timely compensation report Risk (estimated CNY 141 million) • Semiannual monitoring • Compensation may not be for land acquisition, housing, reports paid according to the and lost assets Resettlement Plan 2. Technical design • To be completed by • Progress reports Assumptions September 2004 • Technical capability of the Second Survey and Design Institute 3. Civil works • To be completed by May 2008 • Progress reports • Strong implementation • Project admin. missions capability and availability and project completion of counterpart funds report 4. Communications, • To be completed by December • Progress reports • Strong implementation signaling, and power 2008 • Project admin. missions capability and project completion • Availability of counterpart report funds 5. Implementation of • Comply with the environmental • Progress reports • Technical capability of environmental protection impact assessment and full • Annual monitoring reports third party environmental and mitigation measures implementation of the monitoring agency environmental management • Supervision capability of and monitoring program local environmental • To be completed concurrently protection bureaus with the project works 6. Implementation of the • Number of beneficiary by • Monitoring and evaluation • Strong local government ethnic minorities gender and ethnic group by an independent institute support and adequate development plan and TA • Number of ethnic minorities • Semiannual progress
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